Managing sales

“There will always be need for

some selling. But the aim of marketing
is to make selling superfluous. The aim
of marketing is to know and understand
the customer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer
who is ready to buy. All that should be
needed is to make the product or
service available.”
Peter Drucker
The Four P
Components of
the Marketing
Mix
 Many business are wisely turning their supplier
and distributors into valued partners

From Dr. Mohan Sawhney’s presentation © Mohan Sawhney and AMA definition of marketing
Marketing is the process of planning and executing
the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges
that satisfy individual and organizational goals.
- American Marketing Association
The Generic Value Chain
 e-Vision:
Cleaning the Lense
Red Shifting
Overview of Sales Management
• The role, responsibility and duties of sales manager
• Position titles and responsibilities of sales manager at
different level
• Why and how to integrate sales and marketing
management
• How well sales managers are performing in their jobs
• Why sales managers are not doing a better job
• Why the concept of sales managers job is expanding
• Why sales manager need top-management support
• What mega trends are impacting on sales management
• How to develop people to handle the increasingly
eclectic job of sales manager
American Marketing association agrees
that Sales Management means
The planning, direction, and control of
personal selling, including recruiting,
selecting, equipping, assigning, routing,
supervising, paying, and motivating.
 What is a sales manager
• A sales manager is many thing to many people
• Teacher, trainer, and a coach
• Recruiter, an employer and a counselor
• Leader, follower and implementer
• Communicator and catalyst,
• Planner, organizer and a prognosticator
• Conductor, archestrator, and a skillful manipulator
• A teammate a referee and an umpire
• Advisor, supervisor and a friend
• Developer supporter and some time executioner
 What is a sales manager
• Psychologist, an analyst and strategist
• A Delegator a motivator, and an evaluator
• An instigator, an innovator and a creator of new ideas
• A sales manager is many thing to many people
 Responsibilities of sales manager
• Sales managers are paid to
• plan,
• lead
• and control
the personal selling activity
 Responsibilities of sales manager
• Prepare sales plan and budget
• Set sales force goals and objectives
• Estimate demand and forecast sales
• Determine the size and structure of the sales force organization
• Recruit, select and train people
• Design sales territories, set sales quota, and define performance
standards
• Compensate, motivate and lead the sales force
• Conduct sales volume, cost , and profit analysis
• Evaluate sales force performance
• And monitor the ethical and social conduct of the sales force
 Prepare sales plan and budget

• Plans are prepared at each hierarchical level

• Concerned with yearly and quarterly goals
Sales goal:
Sales force broad, long run direction and general
purpose
Sales Objective:
Make explicit what specific results are to be achieved
within a specified time period
like sales volume, contribution to profits, and continuing
the growth.
 Estimate demand and forecast sales

• Sales forecast supports all other company

decisions
• Forecasting errors can be disastrous
• Estimate market Potential and sales
potential
 Estimate demand and forecast sales

e.g.: GM forecast of gasoline $3.60 by 1987, product mix

emphasized compact and subcompact cars instead of
larger ones.
but during that period it was only 65 cents/ gallon
which resulted into financing rated of 2.9% and rebates
up to $1500.
American motor one –upped with 0% interest rate.
e.g.: Sports Obermeyer Guess forecasting error ?????
Campbell soups Guess forecasting error ?????
 Determining size and structure of
the sales organization
• Number of sales people and the way they
are organized affect several sales
management decision
• It depends on geographical locations,
product type, or even customer type.
 Recruiting, selecting and training people

• Attracting right and qualified people for the job

• Identifying sources of potential sales recruits, methods of
reaching them and strategies for attracting them to apply
for sales job
• Traditionally Training and retraining of sales people have
focused mainly on sales techniques, but progressive
firms are blending sales and marketing concepts with
sales training
 Setting sales quota, and define performance
standards

• Define sales territory (market segment or group

of present and potential customers, who share
some common characteristics relevant to
purchasing behavior)
• It in turn decides sales quota( team as well as
individual)
• Scheduling and routing for calling and meetings
 Compensating, motivating and leading the
Sales force
• Financial and non-financial incentives
• Salary and commissions, vs. company car, secretarial
help, insurance, retirement plan , health care
• Sales manager must realize that most employees seek
fulfillment beyond working conditions and financial
rewards
• Leadership goes far beyond administrative and
supervisory functions
• Inspire, make work more meaningful, and help them to
achieve more than they ever thought they could
 What Motivates Sales Reps?
Most Rewarding Least Rewarding
• Pay • Liking
• Promotion • Respect
• Personal growth • Security
• Sense of • Recognition
accomplishment
 Analyze sales volume, cost , and profit

Analyze sales volume, cost , and profit relationship

• across product lines
• Across territories,
• across customers,
• Across sales persons
• As well as across sales and marketing functions
 Measuring and evaluating sales
force performance
• To make commission and bonus decisions
• To make promotion decisions
How to do that
• Salesperson-to-salesperson comparison
• Current to past performance decision
• Actual-to-expected performance
comparisons
 Monitoring the marketing
environment
• Patterns of business and industry
• Proactive and reactive approach
• Myopic vs. visionary
• Sales force is organizations eyes and ears
• Design an early warning system
Integrating sales and marketing
management
Integrating sales and marketing
management
Integrating sales and marketing
management
 Integrating sales and marketing
management
Marketing Mix and the Customer
Four P’s Four C’s
• Product • Customer solution
• Price • Customer cost
• Place • Convenience
• Promotion • Communication
Integrating sales and marketing
management
 How are sales manager performing

• They don’t teach us problem solving skills

• They have too many sales people to manage
• The paperwork is killing me
• Their territories are too large to manage
• They never discuss long term goals
• When we are doing well, please communicate with us! Don’t wait till
performance slips
• Please ask us once in a while, how you are performing
• Their management style often becomes a hodgepodge of directives
mixed with intimidation and persuasion
 How are sales manager performing
A survey of 1000 industrial buyer revealed as follows:

• 89% said the salespeople did not know their

products
• 88% said the salespeople did not demonstrate
the products they are selling
• 85% said the sales people lacked empathy
• 82 % said they would not buy from the same
salespeople or companies again
 How are sales manager performing
A survey of 257 fortune 500 companies revealed as follows:

• 83% do not determine an approximate duration for each sales call

• 77% do not use computer in territory and time management
• 72% do not set profit objectives for accounts
• 63% do not use prescribed routing patterns in covering territories
• 54% do not conduct organized studies of their sales representatives’ use of
time
• 51% do not determine the number of calls it is economical to make on an
account
• 51% do not use a planned presentation
• 30% do not use call schedules for their sales forces
• 25% do not have system for classifying customers according to potential
• 24% do not set sales objectives for customer accounts
• 19% do not use a call report system
Why aren’t sales manager doing a better job

• Poor selection criteria for promotion to sales

management (as skills needed changes from selling to
supervisory, to managerial, to administrative and to
leadership) (doing vs. managing)
• Inadequate sales management training programs
• Lack of marketing orientation in handling sales
operations
• Insufficient blending of sales and marketing activities
 HOW SALESPEOPLE SPEND
AVERAGE 46-HOUR WORKWEEK
 Mega trends
affecting sales management
• Intense foreign competition
• Rising customer expectations
• Increasing buyer expertise
• Revolutionary developments in computer
technology and communication
• Influx of women and minorities into sales careers
• Growing emphasis on controlling costs
• Scope of competitive selling environment
• Necessary skills to sell intangibles
• Adjustment to information age