Topic 1 Introduction Sales Management

Topic 1 INTRODUCTION TO SALES MANAGEMENT

 

Objectives

To introduce students into the exciting world of Sales Management]

·         Present a general sales management model

·         Discuss each stage in the sales management process

·         Examine some of the emerging trends in Sales Management

·         Discuss key characteristics of effective sales managers

Introduction

With Sales Management, we will look at the following to give some ideas on how sale management can be effectively management.

1.      Sales Management Process

2.      Sales Management Trends

3.      Effective Sales Managers

Sales Management Process

Under the Sales Management Process, we will look at describing some of the functions within the sales disciplines and these would be;

·         Describing the Personal Selling Function

·         Defining the Strategic Role of the Sales Function

·         Developing the Salesforce

·         Directing the Salesforce

·         Determining Salesforce Effectiveness and Performance

Sales Management Trends

With Sales trends students will come across issues such as;

·         From Transactions to Relationship

·         From Individuals to Teams

·         From Sales Volume to Sales Productivity

·         From Management to Leadership

·         From Local to Global

Effective Sales Managers

Managers can be effective if they focus on the following strategies;

·         A Strategic Perspective Focused on Customers

·         Attract, Keep, and Develop Sales Talent

·         Leverage Technology

Sales Management is simply management of an organization’s personal selling functions. It Involved;

·         Strategy Planning

·         People (Implementation)

·         Evaluation and Control.

Sales managers must be able to deal effectively with people in the personal selling function, with people in other functional areas in the organization and with people outside the organization (consumers)   

Definition of Personal Selling:

“Personal communication with an audience through paid personal of an organization or its agents in such a way that the audience perceives the communicator’s organization as being the source of the message”

Marketing Communication tools available to any firm are typically classified as;

·         Personal Selling

·         Advertising – (Personal Communication)

·         Sales Promotion – (Non-personal communication)

·         Publicity – (Non-personal communication) 

Sales Management Process

 

Personal Selling – In personal selling the audience perceives the message as being delivered by the organization.

Publicity – When in the form of personal communication, the audience typically perceives the medium, not the organization, as being the source of the message.

Describing the Personal Selling Function

Because sales managers are responsible for managing the personal selling function, they must thoroughly understand it.

There are four stages of the sales management process and an understanding of personal selling.

 

 

Defining the Strategic Role of the Sales Function

Many firms in the contemporary business world consist of collection of relatively autonomous business units that market multiple products to diverse customer groups. These multiple-business, multiple-product firms must develop and integrate strategic decisions at different organizational levels.

Because personal selling is typically important in organizational marketing situations, we provide an explanation of organizational buyer behavior as a foundation for the development of sales strategies.

Corporate and Business Level strategic decision provides guideline in which sales managers and sales person must operate. Establishes the basic strategic direction for personal selling and sales management activities.

Strategic decisions at the Corporate, Business, and Marketing level must be translated into strategies for individual accounts.

Major elements of Sales Strategy:

1.      Account Targeting Strategy

2.      Relationship Strategy

3.      Selling Strategy

4.      Sales Channel Strategy

Sales Strategies are designed for individual accounts or groups of similar accounts.

Account Targeting Strategy

1.      Identify and classify accounts into useful categories.

2.      Type of relationship

3.      Desired selling approach

4.      Most productive mix of sales channel

Development and Integration of Corporate, Business, Marketing and Sales Strategies establishes the basic strategies for personal selling and sales management activities. To effectively implement these strategies effectively and successfully, there has to be an effective sales organization. (Decisions on amount and allocation, Salesforce size, territory design etc.)

Developing the Salesforce

The sales strategy, sales organization, and Salesforce deployment decisions produce the basic structure for personal selling efforts. Sales managers must also make a number of decisions to ensure the right type of sales people are available and have the skill to operate effectively and efficiently.

Directing the Salesforce

Hiring the best salespeople and providing them with the skills required for success is one thing; directing their efforts to meet sales organization goals and objectives is another. Sales managers spend a great deal of their time in motivating, supervising, and leading members of the Salesforce.

Determining Salesforce Effectiveness and Performance

Sales managers must continually monitor the progress of the Salesforce to determine current effectiveness and performance. Evaluations should address both the effectiveness of the different units within the sales organization and the performance of individual salespeople.

The Sales Organization Audit is the most comprehensive approach for evaluating the effectiveness of sales organization as a whole.

From Transactions to Relationships

The traditional transaction selling model is increasing being replaced by more relationship-oriented selling approaches. Instead of emphasis the selling of products in the short-run, emphasis is now being focused on developing long term relationships by solving customer problems, providing opportunities, and adding value to customer businesses in the long-run.

The traditional transaction selling model is increasing being replaced by more relationship-oriented selling approaches. Instead of emphasizing the selling of products in the short-run, emphasis is now being focused on developing long term relationships by solving customer problems, providing opportunities, and adding value to customer businesses in the long-run.

The key sales management task is determining the appropriate type of relationship to pursue with specific customers. Some customers want and can best be served with a transaction approach while others require some type of relationship strategy. The type of relationship affects all other aspects of sales management. 

Examples of Relationship Selling Trends

Texas Nameplate Company (TNC) - $4 million in annual sales. Smallest company to win the Malcolm Baldridge National Quality Award. TNC focuses on retaining customers by being viewed as a trusted and valuable supplier. The company uses customer visits and response cards to generate feedback from customers and to take corrective actions when problems are identified. Twice a year salespeople get a printout of customers who have not made a purchase during the past 12 months and with these information the salespeople visit these customers. This has resulted in customer recovery and continuous business.

From Individuals to Teams

The trend from individuals to teamwork is becoming increasingly apparent as firms and organization focus more attention on teamwork. No one person possesses the knowledge and skills needed to identify and solve customer problems. Team members can come from all business functional areas with the core selling team headed by a sales manager. 

As sales organizations move from a focus on individuals to an emphasis on teamwork, many aspects of sales management must change.

From Sales Volume to Sales productivity

Salespeople and sales managers are normally evaluated and rewarded according to total sales volume generated over some time period. Although sales volume is important, many companies are finding that all sales are nor equal. Some sales are more profitable than others resulting in companies now looking at the profitability of sales. For profitability of sales, companies are looking at sales productivity.

A sales productivity orientation emphasizes producing more sales for a given level of costs by doing things more effectively and efficiently. The common element in all these situation is that some changes were made to increase sales productivity.

Increasing sales productivity usually requires a sales organization to do some things differently. Example: Many companies’ uses travel incentives to motivate salespeople. Because of tight budget and the tough economic times, companies are keenly interested in making sure benefits from these incentive programs exceed program costs.

From Management to Leadership

Many sales organizations uses a hierarchical, bureaucratic structure. Sales managers operate at different levels with direct supervisory responsibility for the level below and direct accountability to the management level above.

In response to the rapidly changing environment, many sales organization are flattening the hierarchical structure and empowering salespeople to make more decisions in the field.

The basic trend is for a sales manager to lead more and manage less. Sales managers are playing more leadership role by emphasizing:

·         Collaboration rather than control

·         Coaching instead of criticism

·         Salesperson empowerment rather than domination

·         Sharing information rather than withholding it

·         Adapting to individual salespeople rather than treating everyone the same.

From Local to Global

The market place is now global. Products and services are produced and marketed throughout the world. Most companies are involved in the international marketplace in some way now and are likely to be more involved internationally in the future. This trend toward a global orientation includes operating in international markets but goes well beyond just this geographic dimension.

Even companies that do business in a domestic market might compete against firms from other countries, use international suppliers, work with international partners, be affected by international events, serve customers from different countries and cultures. Any of these situations requires a sales organization to expand from a local to a more global focus.

More and more companies are having to move into different international markets to achieve growth objectives because their domestic market is not growing and these do present challenges for sales managers. Competing against international competitors, serving customers from different countries and cultures, and managing a diverse Salesforce are of particular relevance to sales managers.

Few markets or sales organizations are homogeneous while most are becoming more and more heterogeneous and diverse.

Effective Sales Manager

Sales managers face many challenges in today’s business environment. They must be able to implement;

All stages of the sales management model (From Core selling team to Selling Team) and also sales management trends throughout this process.

So what does it take to be an effective sales manager? Studies and Evaluations suggest that effective sales managers employ a strategic perspective that focuses;

·         On Customers

·         Able to Attract

·         Able to keep

·         Able to develop sales talent

·         Able to leverage technology

Effective sales managers need to be more strategically oriented. Requires to bring customer focus to development of organizational strategies and built around customer satisfaction as well as build on sales organization compensation plan not only tied to sales quota but also to customer satisfaction.

Creating sales strategies to meet the need of different customers in a profitable manner with emphasize on a dedicated account executive for each major client.

A critical part of sales management is related to people issues.

·         Hiring the best salespeople.

·         Making sure they stay with the sales organization.

·         Helping them perform at the highest level.

General Electric does an especially good job with its sales talent. It spends a great deal of time trying to hire the best sales people and then sales managers help its sales people to develop a performance plan. They meet 3 to 4 times a year to assess progress. Extensive product and selling skills training is provided and these has helped GE to attract and retain a talented sales force. 

Leverage Technology

A proper use of information and communication technologies can help salespeople and sales managers perform their jobs more effectively and efficiently. The key task is:

·         Select the right technology.

·         Make sure it is used in the appropriate manner

·         Leverage technology to increase productivity

The most effective sales managers are those who find the proper blend of people and technology to meet the needs of customers and people. 

Sources:

Sales Management Analysis and Decision Making by Pilai, Ingram, LaForge, Avila, Schwepker Jr Williams. 5^th Eddition Thomson South-Western