Sales Management

Sales management refers to the administration of the personal selling a company's product line(s). It includes the planning, implementation, and control of sales programs, as well as recruiting, training, motivating, and evaluating members of the sales force. In a small business, these various functions may be performed by the owner or by the sales manager. The fundamental role of the sales manager is to develop and administer a selling program that effectively contributes to the organization's goals. The sales manager for a small business would likely decide how many salespeople to employ, how best to select and train them, what sort of compensation and incentives to use to motivate them, what type of presentation they should make, and how the sales function should be structured for maximum contact with customers.

Sales management is just one facet of a company's overall marketing mix, which encompasses strategies related to the "four Ps": products, pricing, promotion, and place (distribution). Objectives related to promotion are achieved through three supporting functions: 1) advertising, which includes direct mail, radio, television, and print advertisements, among other media; 2) sales promotion, which includes tools such as coupons, rebates, contests, and samples; and (3) personal selling, which is the domain of the sales manager.

Although the role of sales managers is multidisciplinary in scope, their primary responsibilities are: 1) setting goals for a sales force; 2) planning, budgeting, and organizing a program to achieve those goals; 3) implementing the program; and 4) controlling and evaluating the results. Even when a sales force is already in place, the sales manager will likely view these responsibilities as an ongoing process necessary to adapt to both internal and external changes.

GOAL SETTING

Goal setting is usually based on a company's overall sales goals, modified by the mix of products to be moved. Overall sales goals must be met, of course, but balance must also be maintained. A company that makes three different types of boats, for instance, of which the highest-priced model has the highest profit margins but the lowest-priced boat is easiest to sell, the goal will be structured to move as many of the highest-priced models as possible. Balance between regions also enters the goal-setting process. Sales to some regions may be more difficult (far fewer lakes) but necessary to maintain the company's total volume. If multiple lines are sold (tenting and trailers, for instance), different goals will apply to each category. Goal setting will depend on product mix. In the usual case, past history will be a guide and goals will be set in light of the history—and desires to change past performance—by lifting all sales, high-margin sales, creating sales for new products, etc.

PLANNING, BUDGETING, AND ORGANIZING

After goals are set, the sales manager may accept, or be required to modify, the general approach to sales in the current year. Both ongoing patterns and new ones require budgeting and, occasionally, changes to the organization. Fundamental structural issues are involved such as the distribution channel, the forces to be deployed, and the sales program (incentives, pricing schedules, cooperative advertising programs, etc.) that will be used. A company, for instance, may be engaged in making a transition from direct sales using its own sales branches as distributors to using independent distributors. The planning process in the first year may involve finding and starting three new distributors and closing two company branches and relocating its best sales people. In another operation, the goal may simply require adding four new sales people and training them. In yet another case, the company may have decided to distribute some of its production through a "Big Box," thus creating ill-will among its servicing retailers—and in consequence has decided to offer the retailers a more attractive sales program, higher co-op advertising participation, and high discounts on four occasions if they hold seasonal sales. Finally, in yet another case, no big changes are in the offing, but budgets must be formulated anyway, retiring salespeople replaced, and programs launched in the past continued.

For start-ups, of course, the sales organization must be built from scratch after its general structure has been determined. In such situations planning, budgeting, and organizing take on rather formidable dimensions. The ideal approach is to concentrate on hiring the best possible sales people, to bring them on board as rapidly as possible, and then using them to help with the process.

IMPLEMENTATION

Implementation of the plan will have different emphases depending on whether the operation is up and running or required to be built or rebuilt. Recruiting, training, and setting compensation are primary implementation activities of start-ups or expansions. So are designing sales territories and assigning sales goals to each.

Recruiting

Recruiting salespeople ideally requires understanding of the customers and the market, not least its physical aspects, travel time needed to reach targeted points, and the type of selling involved. Experienced sales managers typically bring such skills to the job or, if brought in from a different field, will make some preliminary field trips to get a feel.

The manager may seek candidates through advertising, college recruiting, company sources, and employment agencies. Another excellent source of salespeople is—other salespeople. In this field, to be one is to know one. Sales recruiting has special characteristics difficult to describe in analytical terms—especially in the small business environment where relationships tend to be closer. But, indeed, in all areas of sales, managers rely a great deal on their experience of sales to find people who have the special knack. Generalizations are dangerous, but good sales people have good communications skills, enjoy human contact, are disciplined, can tolerate rejection with good humor, respond to rewards, and have a high level of energy—often needed because sales may be tiring, may require many hours of standing, and occasionally physical effort in demonstrating products. In technical sales, an engineering background is often required in addition to favorable personality traits. Generalizations are dangerous because experienced people in this business know that often the outwardly least likely people turn out to be great producers whereas those who seem ideal miserably fail. Not everything can be determined by administering personality tests. Good sales people have something in common with entrepreneurs; both categories are notoriously diverse.

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