Evolution of Sales Management, Scope and Importance
When it comes to sales management, you’re likely to come across two kinds of managers. The first one notices the market declining and decides to manage that over everything else. In this scenario, the only result you can possibly expect is a decline in sales as well.
The second type of manager is the kind who decides to leverage the decline and increase the brand’s market share. This is a bold manager with vision who knows how the game is played. Managers of this kind have no problems achieving results even in the most challenging scenario.
But, if you were to dig deeper, you would find that these managers follow a pattern; a pattern that is broken down into 4 stages, with the 4th one being the most evolved stage. In this blog, we are going to explore these 4 stages even further.
This is the stage at which most companies begin their journey and it can be best described as being chaotic or without rules. There is no structure in place and the sales team is simply commanded to go make a sale. Needless to say, such a scenario can lead to all kinds of problems and conflicts.
That’s when the person running the business decides to introduce some sense of a structure by hiring a sales manager.
In stage 2, we start to see a system in place or something that’s close enough to an actual system. The sales manager, at this stage, functions as though he/she were conducting a survey. He/she tries to make the sales team feel valued and comfortable.
The sales team is provided with everything they need, which is fine as long as the sales team can continue contributing to the brand’s growth.
However, all good things come to an end and the cracks start to appear. A common problem that plagues stage 2 is self-interest. When all their needs are met easily, salespeople, especially the ones higher on the success ladder, tend to develop an attitude of “I’m only supposed to sell. That’s my job”.
In other words, stage 2 becomes toxic. The manager is forced to deal with complaints of unfairness and other issues such as low productivity.
This is when a stronger sales manager is called in; someone who won’t hesitate to fire salespeople who aren’t contributing and someone who can restore order. That brings us to stage 3.
The stage 3 managers begin to standardize the system and show the door to non-performers. The profits go up and prices are raised. The stage 3 manager functions as a CFO cum owner. This person is invested in expanding the business and doing what’s best for it.
However, this is the trickiest stage as many companies tend to fall into a false sense of comfort assuming that there isn’t much else to do. In other words, they don’t strive for stage 4. That brings us to the question of what stage 4 looks like.
Stage 4 is when the hired manager is a proper businessman capable of transforming the team. He/she can identify the non-performers and work towards motivating them. A stage 3 manager only hires and fires; a stage 4 manager transforms. They can play with the cards that they’ve been dealt.
There are 3 key changes that the stage 4 manager does. He/she establishes a do or die culture while celebrating the entire sales team, establishes a selling process, and provides the tools needed for the team to do what’s necessary.
The scope of sales management is very important and drives the whole sales system. In nutshell the 3 key factors of sales management are:
- Sales Operation: This will include identification and allocation of territory to the sales team. Measuring and monitoring their performance. Motivating and leading by example to help them close deals and hit their targets and put incentives in their pocket.
- Sales Strategies: This has got all to do with product positioning, price decisions and running promotions. Knowing when to discontinue a product and also know the activities of the competitors.
- Sales Analysis: Evaluating and understand product movement, which product is bringing in the most revenue and which is unmoving. Also measuring forecast versus actual will help a sales personnel to understand and take corrective measures. To know who is the top 3 sales performing personnels can give us an judgement of the manouvers we need to make in the team to reach our fixed targets.
Sales management facilitates the directions of activities and functions which are involved in the distribution of goods and services. According to Philip Kotler, “Marketing management is the analysis, planning implementation and control of programmes designed to bring about desired exchanges with target markets for the purpose of achieving organisational objectives.
It relies heavily on designing the organisations’ offering in terms of the target markets needs and desires and using effective pricing, communication and distribution to inform, motivate and service the market.”
Sales or marketing management is concerned with the chalking out of a definite programme, after careful analysis and forecasting of the market situations and the ultimate execution of these plans to achieve the objectives of the organisation. Further their sales plans to a greater extent rest upon the requirements and motives of the consumers in the market aimed at.
To achieve this objective the organisation has to give heed to the right pricing, effective advertising and sales promotion, discerning distribution and stimulating the consumer’s through the best services. To sum up, marketing management may be defined as the process of management of marketing programmes for accomplishing organisational goals and objectives. It involves planning, implementation and control of marketing programmes or campaigns.
(i) Sales research and planning.
(ii) Demand creation.
(iii) Sales costs and budget.
(iv) Price fixations.
(v) Development of products.
(vi) Establishing sales territories.
(vii) Co-ordination of sales.
These functions differ from company to company according to their size and the nature of their products.
Importance of Sales Management:
Sales management has gained importance to meet increasing competition and the need for improved methods of distribution to reduce cost and to increase profits. Sales management today is the most important function in a commercial and business enterprise.
The following are the other factors showing importance of the sales management:
(i) Introduction of new products in the market.
(ii) Increasing the production of existing products.
(iii) Reducing cost of sales and distribution.
(iv) Export market.
(v) Development in the means and communication of transportation within and outside the country.
(vi) Rise in per capita income and demand for more goods by the consumers.