Sales management
Encyclopedia
Sales management is a business
discipline which is focused on the practical application of sales
techniques and the management of a firm's sales operations
. It is an important business function as net sales
through the sale of product
s and servicess and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management.
Sales manager is the typical title of someone whose role is sales management. The role typically involves sales planning, human resources
, talent development, leadership
and control of resources such as organisational assets.
, quotas, sales forecasting, demand management
and the writing and execution of a sales plan.
A sales plan is a strategic document that outlines the business targets, resources and sales activities. It typically follows the lead of the marketing plan
, strategic planning
and the business plan
with more specific detail on how the objectives can be achieved through the actual sale of products and services.
Job analysis is performed to specify the certain tasks that a salesperson would be responsible for on a daily basis. It should identify what activities are deemed as being vital to the success of the company. Any person associated with the sales organization or the human resources department could carry out the analysis as well as an outside specialist (Spiro, pp.134). The person that is responsible for completing a job analysis should have an in-depth comprehension of the daily activities of the salespeople.
This job analysis is then written in an explicit manner as a job description. The general information consists of:
1. Title of job
2. Organizational relationship
3. Types of products and services sold
4. Types of customers called on
5. Duties and responsibilities related to the job
6. Job demands
7. Hiring specifications
An effective job description will identify compensation plans, size of workload, and the salespeople’s duties. It is also primarily responsible for hiring tools such as application forms and psychological tests.
The most difficult part of this process would be the determination of job qualifications. A reason for this difficulty is because hiring affects a company’s competitive advantage in the market as well as the amount of revenue. Additionally, there should be a set of hiring attributes that is associated with each sales job that is within a company. If an individual does not excel in their assigned territory, it could be due to external factors relating to that person’s environment.
Let it be noted that a company should be careful not to submit to discrimination in regards to employment. A number of qualifications (ethnic background, age, etc.) can not be used in the selection process of hiring.
The Key Performance Indicators indicate whether or not the sales process is being operated effectively and achieves the results as set forth in sales planning. It should enable the sales managers to take timely corrective action deviate from projected values. It also allows senior management to evaluate the sales manager.
More "results related" than "process related" are information regarding the sales funnel and the hit rate.
Sales reporting can provide metrics for sales management compensation. Rewarding the best managers without accurate and reliable sales reports is not objective.
Also, sales reports are made for internal use for top management. If other divisions’ compensation plan depends on final results, it is needed to present results of sales department’s work to other departments.
Finally, sales reports are required for investors, partners and government, so the sales management system
should have advanced reporting capabilities to satisfy the needs of different stakeholders.
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
discipline which is focused on the practical application of sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
techniques and the management of a firm's sales operations
Sales operations
Sales operations are a set of business activities and processes that help a sales organization run effectively, efficiently and in support of business strategies and objectives...
. It is an important business function as net sales
Sales (accounting)
In bookkeeping, accounting, and finance, Net sales are operating revenues earned by a company when it sells its products. Revenue are reported directly on the income statement as Sales or Net sales....
through the sale of product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
s and servicess and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management.
Sales manager is the typical title of someone whose role is sales management. The role typically involves sales planning, human resources
Human resources
Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...
, talent development, leadership
Leadership
Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task". Other in-depth definitions of leadership have also emerged.-Theories:...
and control of resources such as organisational assets.
Sales planning
Sales planning involves strategy, setting profit-based sales targetsProfit-based sales targets
In launching a program, managers often start with an idea of the dollar profit they desire and ask what sales levels will be required to reach it. Target volume is the unit sales quantity required to meet an earnings goal. Target revenue is the corresponding figure for dollar sales. Both of these...
, quotas, sales forecasting, demand management
Demand management
Demand management is a planning methodology used to manage forecasted demand.-Demand management in economics:In economics, demand management is the art or science of controlling economic demand to avoid a recession...
and the writing and execution of a sales plan.
A sales plan is a strategic document that outlines the business targets, resources and sales activities. It typically follows the lead of the marketing plan
Marketing plan
A marketing plan may be part of an overall business plan.Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use....
, strategic planning
Strategic planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues...
and the business plan
Business plan
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals....
with more specific detail on how the objectives can be achieved through the actual sale of products and services.
Recruitment of Sales Staff
The three recruitment tasks used in sales management are Job analysis; Job description and Job qualificationsJob analysis is performed to specify the certain tasks that a salesperson would be responsible for on a daily basis. It should identify what activities are deemed as being vital to the success of the company. Any person associated with the sales organization or the human resources department could carry out the analysis as well as an outside specialist (Spiro, pp.134). The person that is responsible for completing a job analysis should have an in-depth comprehension of the daily activities of the salespeople.
This job analysis is then written in an explicit manner as a job description. The general information consists of:
1. Title of job
2. Organizational relationship
3. Types of products and services sold
4. Types of customers called on
5. Duties and responsibilities related to the job
6. Job demands
7. Hiring specifications
An effective job description will identify compensation plans, size of workload, and the salespeople’s duties. It is also primarily responsible for hiring tools such as application forms and psychological tests.
The most difficult part of this process would be the determination of job qualifications. A reason for this difficulty is because hiring affects a company’s competitive advantage in the market as well as the amount of revenue. Additionally, there should be a set of hiring attributes that is associated with each sales job that is within a company. If an individual does not excel in their assigned territory, it could be due to external factors relating to that person’s environment.
Let it be noted that a company should be careful not to submit to discrimination in regards to employment. A number of qualifications (ethnic background, age, etc.) can not be used in the selection process of hiring.
Sales reporting
The sales reporting includes the key performance indicators of the sales force.The Key Performance Indicators indicate whether or not the sales process is being operated effectively and achieves the results as set forth in sales planning. It should enable the sales managers to take timely corrective action deviate from projected values. It also allows senior management to evaluate the sales manager.
More "results related" than "process related" are information regarding the sales funnel and the hit rate.
Sales reporting can provide metrics for sales management compensation. Rewarding the best managers without accurate and reliable sales reports is not objective.
Also, sales reports are made for internal use for top management. If other divisions’ compensation plan depends on final results, it is needed to present results of sales department’s work to other departments.
Finally, sales reports are required for investors, partners and government, so the sales management system
Management system
A management system is the framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives....
should have advanced reporting capabilities to satisfy the needs of different stakeholders.
See also
- Sales operationsSales operationsSales operations are a set of business activities and processes that help a sales organization run effectively, efficiently and in support of business strategies and objectives...
- MarketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- Merchandise
- EconomyEconomyAn economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
- Good (economics)