Sales management

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 products and services 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
talent development and leadership.

Sales management refers to the administration of the personal selling component of an organization's
marketing program. It includes the planning, implementation, and control of sales programs, as well as
recruiting, training, motivating, and evaluating members of the sales force. The fundamental role of the
sales manager is to develop and administer a selling program that effectively contributes to the
achievement of the goals of the overall organization. The term "sales manager" may be properly applied to
several members of an organization, including: marketing executives, managers of field sales forces,
district and division managers, and product line sales administrators.

Sales planning
Sales planning involves strategy, setting profit-based sales targets, 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[1][2] and the business plan with more
specific detail on how the objectives can be achieved through the actual sale of products and services.

Roles of sales management

GOAL SETTING
To understand the role of sales managers in formulating goals, one must first comprehend their position
within the organization. In fact, sales management is just one facet of a company's overall marketing
strategy. A company's marketing program is represented by its marketing mix, which encompasses
strategies related to products, prices, promotion, and 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, such as contests and coupons; and (3)
personal selling, which encompasses the sales force manager.

The overall goals of the sales force manager are essentially mandated by the marketing mix. The mix
coordinates objectives between the major components of the mix within the context of internal constraints,
such as available capital and production capacity. For example, the overall corporate marketing strategy
may dictate that the sales force needs to increase its share of the market by five percent over two years. It is
the job of the sales force manager, then, to figure out how to achieve that directive. The sales force
manager, however, may also play an important role in developing the overall marketing mix strategies that
determine his objectives. For example, he may be in the best position to determine the specific needs of
customers and to discern the potential of new and existing markets.

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One of the most critical duties of the sales manager is to accurately estimate the potential of the company's
offerings. An important distinction exists between market potential and sales potential. The former is the
total expected sales of a given product or service for the entire industry in a specific market over a stated
period of time. Sales potential refers to the share of a market potential that an individual company can
reasonably expect to achieve. According to Irwin, a sales forecast is an estimate of sales (in dollars or
product units) that an individual firm expects to make during a specified time period, in a stated market,
and under a proposed marketing plan.

Estimations of sales and market potential are often used to set major organizational objectives related to
production, marketing, distribution, and other corporate functions, as well as to assist the sales manager in
planning and implementing his overall sales strategy. Numerous sales forecasting tools and techniques,
many of which are quite advanced, are available to help the sales manager determine potential and make
forecasts. Major external factors influencing sales and market potential include: industry conditions, such
as stage of maturity; market conditions and expectations; general business and economic conditions; and
the regulatory environment.

PLANNING, BUDGETING, AND

ORGANIZING
After determining goals, the sales manager must develop a strategy to attain them. A very basic decision is
whether to hire a sales force or to simply contract with representatives outside of the organization. The
latter strategy eliminates costs associated with hiring, training, and supervising workers, and it takes
advantage of sales channels that have already been established by the independent representatives. On the
other hand, maintaining an internal sales force allows the manager to exert more control over the
salespeople and to ensure that they are trained properly. Furthermore, establishing an internal sale force
provides the opportunity to hire inexperienced representatives at a very low cost.

The type of sales force developed depends on the financial priorities and constraints of the organization. If
a manager decides to hire salespeople, he needs to determine the size of the force. This determination
typically entails a compromise between the number of people needed to adequately service all potential
customers and the resources made available by the company. One technique sometimes used to determine
size is the "work load" strategy, whereby the sum of existing and potential customers is multiplied by the
ideal number of calls per customer. That sum is then multiplied by the preferred length of a sales call (in
hours). Next, that figure is divided by the selling time available from one sales person. The final sum is
theoretically the ideal sales force size. A second technique is the "incremental" strategy, which recognizes
that the incremental increase in sales that results from each additional hire continually decreases. In other
words sales people are gradually added until the cost of a new hire exceeds the benefit.

Other decisions facing a sales manager about hiring an internal sales force are what degree of experience to
seek and how to balance quality and quantity. Basically, the manager can either "make" or "buy" his force.
Young hires, or those whom the company "makes," cost less over a long term and do not bring any bad
sales habits with them that were learned in other companies. On the other hand, the initial cost associated
with experienced sales people is usually lower, and experienced employees can start producing results
much more quickly. Furthermore, if the manager elects to hire only the most qualified people, budgetary
constraints may force him to leave some territories only partially covered, resulting in customer
dissatisfaction and lost sales.

After determining the composition of the sales force, the sales manager creates a budget, or a record of
planned expenses that is (usually) prepared annually. The budget helps the manager decide how much

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money will be spent on personal selling and how that money will be allocated within the sales force. Major
budgetary items include: sales force salaries, commissions, and bonuses; travel expenses; sales materials;
training; clerical services; and office rent and utilities. Many budgets are prepared by simply reviewing the
previous year's budget and then making adjustments. A more advanced technique, however, is the
percentage of sales method, which allocates funds based on a percentage of expected revenues. Typical
percentages range from about two percent for heavy industries to as much as eight percent or more for
consumer goods and computers.

After a sales force strategy has been devised and a budget has been adopted, the sales manager should
ideally have the opportunity to organize, or structure, the sales force. In general, the hierarchy at larger
organizations includes a national or international sales manager, regional managers, district managers, and
finally the sales force. Smaller companies may omit the regional, and even the district, management levels.
Still, a number of organizational considerations must be addressed. For example:

 Should the force emphasize product, geographic, or customer specialization?

 How centralized will the management be?
 How many layers of management are necessary?

The trend during the 1980s and early 1990s was toward flatter organizations, which possess fewer levels of
management, and decentralized decision-making, which empowers workers to make decisions within their
area of expertise.

IMPLEMENTING
After goal setting, planning, budgeting, and organizing, the sales force plan, budget, and structure must be
implemented. Implementation entails activities related to staffing, designing territories, and allocating sales
efforts. Staffing, the most significant of those three responsibilities, includes recruiting, training,
compensating, and motivating sales people.

Before sales managers can recruit workers to fill the jobs, they must analyze each of the positions to be
filled. This is often accomplished by sending an observer into the field. The observer records time spent
talking to customers, traveling, attending meetings, and doing paperwork. The observer then reports the
findings to the sales manager, who uses the information to draft a detailed job description. Also influencing
the job description will be several factors, chiefly the characteristics of the people on which the person will
be calling. It is usually important that salespeople possess characteristics similar to those of the buyer, such
as age and education.

The manager may seek candidates through advertising, college recruiting, company sources, and
employment agencies. Candidates are typically evaluated through personality tests, interviews, written
applications, and background checks. Research has shown that the two most important personality traits
that sales people can possess are empathy, which helps them relate to customers, and drive, which
motivates them to satisfy personal needs for accomplishment. Other factors of import include maturity,
appearance, communication skills, and technical knowledge related to the product or industry. Negative
traits include fear of rejection, distaste for travel, self-consciousness, and interest in artistic or creative
originality.

After recruiting a suitable sales force, the manager must determine how much and what type of training to
provide. Most sales training emphasizes product, company, and industry knowledge. Only about 25 percent
of the average company training program, in fact, addresses personal selling techniques. Because of the
high cost, many firms try to reduce the amount of training. The average cost of training a person to sell

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industrial products, for example, commonly exceeds $30,000. Sales managers can achieve many benefits
with competent training programs, however. For instance, research indicates that training reduces employee
turnover, thereby lowering the effective cost of hiring new workers. Good training can also improve
customer relations, increase employee morale, and boost sales. Common training methods include lectures,
cases studies, role playing, demonstrations, on-the-job training, and self-study courses.

After the sales force is in place, the manager must devise a means of compensating individuals. The main
conflict that must be addressed is that between personal and company goals. The manager wants to provide
sufficient incentives for salespeople but also must meet the division's or department's goals, such as
controlling costs, boosting market share, or increasing cash flow. The ideal system motivates sales people
to achieve both personal and company goals. Good salespeople want to make money for themselves,
however, a trait which often detracts from the firm's objectives. Most approaches to compensation utilize a
combination of salary and commission or salary and bonus.

Although financial rewards are the primary means of motivating workers, most sales organizations employ
other motivational techniques. Good sales managers recognize that sales people, by nature, have needs
other than the basic physiological needs filled by money: they want to feel like they are part of winning
team, that their jobs are secure, and that their efforts and contributions to the organization are recognized.
Methods of meeting those needs include contests, vacations, and other performance based prizes in
addition to self-improvement benefits such as tuition for graduate school. Another tool managers
commonly use to stimulate their workers is quotas. Quotas, which can be set for factors such as the number
of calls made per day, expenses consumed per month, or the number of new customers added annually,
give salespeople a standard against which they can measure success.

In addition to recruiting, training, and motivating a sales force to achieve the sales manager's goals,
managers at most organizations must decide how to designate sales territories and allocate the efforts of the
sales team. Many organizations, such as real estate and insurance companies, do not use territories,
however. Territories are geographic areas such as cities, counties, or countries assigned to individual
salespeople. The advantage of establishing territories is that it improves coverage of the market, reduces
wasteful overlap of sales efforts, and allows each salesperson to define personal responsibility and judge
individual success.

Allocating people to different territories is an important sales management task. Typically, the top few
territories produce a disproportionately high sales volume. This occurs because managers usually create
smaller areas for trainees, medium-sized territories for more experienced team members, and larger areas
for senior sellers. A drawback of that strategy, however, is that it becomes difficult to compare
performance across territories. An alternate approach is to divide regions by existing and potential base. A
number of computer programs exist to help sales managers effectively create territories according to their
goals.

CONTROLLING AND EVALUATING

After setting goals, creating a plan, and setting the program into motion, the sales manager's responsibility
becomes controlling and evaluating the program. During this stage, the sales manager compares the
original goals and objectives with the actual accomplishments of the sales force. The performance of each
individual is compared with goals or quotas, looking at elements such as expenses, sales volume, customer
satisfaction, and cash flow. A common model used to evaluate individual sales people considers four key
measures: the number of sales calls, the number of days worked, total sales in dollars, and the number of
orders collected. The equation below can help to identify a deficiency in any of these areas:

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An important consideration for the sales manager is profitability. Indeed, simple sales figures may not
reflect an accurate image of the performance of the overall sales force. The manager must dig deeper by
analyzing expenses, price-cutting initiatives, and long-term contracts with customers that will impact future
income. An in-depth analysis of these and related influences will help the manager to determine true
performance based on profits. For use in future goal-setting and planning efforts, the manager may also
evaluate sales trends by different factors, such as product line, volume, territory, and market.

After the manager analyzes and evaluates the achievements of the sales force, that information is used to
make corrections to the current strategy and sales program. In other words, the sales manager returns to the
initial goal-setting stage.

Importance of Sales management

Sources of Revenue
A business organization can generate revenue from a variety of sources, including operating income from
sales, royalties, dividend and interest income from financial assets it owns, payouts from insurance
policies, rental income and capital gains from the sale of owned properties. However, even where
organizations derive little or no taxable income directly from operations stemming from sales -- such as an
investment company -- they must still generally have some sort of sales effort to generate investment
revenue to fund their investments in income-producing assets. For example, a limited partnership must
often engage in a concentrated sales effort to recruit more limited partners.

Sales Versus Marketing

While it is sometimes difficult to draw the line at where the marketing process ends and the sales efforts
begin, the sales effort is the effort that actually collects the money -- or the obligation to buy, in the case of
a purchase order or financed arrangement. The marketing effort creates favorable conditions for the sale to
take place. In a nutshell, the marketer leads the horse to water; the sales team makes it drink.

Partnership Between the Sales and Marketing Teams

Few products are truly bought on impulse. Even a can of brand-name soda on a shelf is there because its
wholesaler built a relationship with the store manager over time and secured good shelf placement, denying
it to a competitor. To get the most out of the sales effort, the sales team needs support from the marketing
team to facilitate follow-up contacts, mailings and account service. If the support is not there, the account
may not last long, and turnover will increase. If the sales staff is too directly involved in that effort, it may
eventually become overwhelmed with account service and find it difficult to grow the business. Sales is so
important, then, that it typically behooves management to free its sales staff from some or all of the account
service process to generate future revenue.

Investing In Sales
Many companies under-invest in their sales effort, treating sales like an afterthought, to be handled after
the managers solve all the manufacturing, distribution and financing issues. The best sales forces are
professional, well-compensated, supported with a strong marketing effort and empowered to act, serving
key client interests with marketing support, money and time. They have strong personal relationships with
key customers, or they learn how to build them.

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Sales Lead Conversions

As mentioned before, salespeople bridge the gap between customer needs and the product/service that
fulfils that need. Often, salespeople are dealing with already warmed up prospects who have an existing
awareness of the company through marketing and advertising efforts, and it’s the job of the salesperson to
close the deal by introducing further information and helping the customer make those connections.

Take for example, car sales. You typically go to a car dealership knowing you are looking for a car. The car
salesperson will typically ask you questions about your personal life including size of your family, typical
daily routine, etc. in order to gain insight into what you would use the car for. They can then offer
information about various cars in the dealer’s range that would suit your needs and guide you in making an
informed decision about which car is the one for you.

Because salespeople interact directly with the potential customer, they have the advantage of being able to
glean personal knowledge that will aid them in delivering their sales pitch and tailoring their offerings to
their audience. This is often an attractive aspect for customers, as they may view the salesperson as the
expert, which builds credibility and therefore trust.

Business Growth

Sales play a key role in the building of loyalty and trust between customer and business. Trust and loyalty
are the main reasons why a customer would choose to recommend your company to a friend or family
member, or write a great review of your product or service online.

Recommendations and reviews have always been valued by prospects and customers, as they come from a
third party and the perception is that the reviews and recommendations are independent of the seller and
therefore carry more credibility. In the digital age, they are extremely influential, due to the reach and
power of social media and online media. During sales interactions, encouraging the customer to
recommend a friend or give positive feedback can have an impact on the growth of the business through
increased brand awareness and sales.

Customer Retention

Selling is a personal interaction between one human and another, which is a powerful thing. Never under
estimate the personal connection between two people, and the potential effect this can have on your brand’s
reputation.

Excellent salespeople are those that not only make the sale, but create a long-lasting impact on the
customer. Long term customer relationships lead to repeat custom, referrals and increase the brand’s
reputation by word of mouth.

One of the keys to customer retention through sales is to perform sales follow-ups. Setting up after-sales
calls or meetings is a great way to maintain and build a positive relationship and gives the customer an
opportunity to feedback their experience of the product or service. If the customer has a complaint or issue,
it can be dealt with quickly and professionally. Too often, unhappy customers will not complain, they will
simply switch their custom to another provider and won’t recommend your services or products to others.
It’s more cost effective to retain customers than to win new ones, so look after your existing customers
well.

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In conclusion, the power of sales in the continued success of an organisation is not to be underestimated or
under-used. Take advantage of the impact sales can have, not only on revenue but on brand reputation, long
term customer retention and business growth.

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Duties and responsibilities of sales manager

Selecting targets – There’s an adage that salespeople talk to whoever will talk to them. In the new world
of selling, your responsibility is to make certain that they are talking to the decision makers who can
approve large opportunities that will come to fruition in the near future. Working with sales leadership, you
must establish a filter that helps to define the most likely candidates for higher-opportunity sales efforts.

Defining priorities –Help your sales force prioritize what opportunities they pursue and how much time
and effort they spend on each opportunity. Good sales managers keep key opportunities that are real and
relevant to the current circumstances in the crosshairs of their salespeople.

Defining time guidelines – Set and enforce guidelines for how sellers spend their time. They no longer can
just meander about a territory or go on a sweep of their current account base with the intention of
“checking in and finding out what’s going on.” Rather, they must undertake a strategic and surgical
approach to going after identified targets in a prescribed way.

Monitoring compliance – You are responsible for providing data that allows you and other leaders in the
organization to monitor what is happening in the marketplace regarding customers, competitors and
surrounding regulations and technology shifts. Consistency in the execution of a sales process gives data to
the organization that clarifies what works and what does not. We’re not talking about activity management
and monitoring for its own sake. Your focus should be working toward compliance in the sales process to
protect the integrity of the data captured so everyone has relevant data for good decision making.

Navigating the terrain – Your sales process lays out a map for action, but a map is just a two-dimensional
representation of a sequential process. Good sales management also addresses the third dimension –
assessing the terrain of what is going on in the marketplace based on the data you’re getting (including
variant data) from the sales process. There will be occasions when you will need to send out a scouting
team of select salespeople to find out new information. Then it’s up to you to analyze what they bring back
and use that information to better navigate the terrain.

Securing resources – There will be occasions when competing priorities of other departments impede
progress on landing a big account. It’s your responsibility to make certain that significant sales
opportunities are visible to leadership and to secure from less-than-enthusiastic parties inside your
organization the resources needed for a successful sales process.

Knowing when (and when not) to expedite – It’s your job to expedite what needs to be expedited—and
to know when not to. If you try to expedite every opportunity, soon no one will respond. Salespeople are
often viewed as that proverbial “boy who cried wolf.” For the sake of the organization and for the sake of
your reputation and that of your salespeople, you’ll need to be the gatekeeper on when an opportunity
needs to be expedited, and when everyone should simply follow the normal sales process.

 A sales manager devises strategies and techniques necessary for achieving the sales targets. He is the
one who decides the future course of action for his team members.
 It is the sales manager’s duty to map potential customers and generate leads for the organization.
He should look forward to generating new opportunities for the organization.

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 A sales manager is also responsible for brand promotion. He must make the product popular amongst
the consumers. A banner at a wrong place is of no use. Canopies must be placed at strategic locations;
hoardings should be installed at important places for the best results.
 Motivating team members is one of the most important duties of a sales manager. He needs to make
his team work as a single unit working towards a common objective. He must ensure team members don’t
fight amongst themselves and share cordial relationship with each other. Develop lucrative incentive
schemes and introduce monetary benefits to encourage them to deliver their level best. Appreciate
whenever they do good work.
 It is the sales manager’s duty to ensure his team is delivering desired results. Supervision is essential.
Track their performances. Make sure each one is living up to the expectations of the organization. Ask
them to submit a report of what all they have done throughout the week or month. The performers must be
encouraged while the non performers must be dealt with utmost patience and care.
 He is the one who takes major decisions for his team. He should act as a pillar of support for them and
stand by their side at the hours of crisis.
 A sales manager should set an example for his team members. He should be a source of inspiration for
his team members.
 A sales manager is responsible for not only selling but also maintaining and improving relationships
with the client. Client relationship management is also his KRA.
 As a sales manager, one should maintain necessary data and records for future reference

1)Resolve customer complaints regarding sales and service.

2) Monitor customer preferences to determine focus of sales efforts.

3) Direct and coordinate activities involving sales of manufactured products, services, commodities, real
estate or other subjects of sale.

4) Determine price schedules and discount rates.

5) Review operational records and reports to project sales and determine profitability.

6) Direct, coordinate, and review activities in sales and service accounting and recordkeeping, and in
receiving and shipping operations.

7) Confer or consult with department heads to plan advertising services and to secure information on
equipment and customer specifications.

8) Advise dealers and distributors on policies and operating procedures to ensure functional effectiveness
of business.

9) Prepare budgets and approve budget expenditures.

Sales Forecasting
Sales forecasting is the process of estimating future sales. Accurate sales forecasts enable companies to
make informed business decisions and predict short-term and long-term performance. Companies can base
their forecasts on past sales data, industry-wide comparisons, and economic trends.

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It is easier for established companies to predict future sales based on years of past business data. Newly
founded companies have to base their forecasts on less-verified information, such as market research and
competitive intelligence to forecast their future business.

Sales forecasting gives insight into how a company should manage its workforce, cash flow, and resources.
In addition to helping a company allocate its internal resources effectively, predictive sales data is
important for businesses when looking to acquire investment capital.

Sales forecasting allows companies to:

 Predict achievable sales revenue;
 Efficiently allocate resources;
 Plan for future growth.
 Decomposition
 Decomposition stands as one of the most common statistical sales forecasting methods.
Decomposition belongs to the time series family of forecasting methods. Decomposition looks at
four variables that control the value of “x” over a certain time period. In
simpler terms, decomposition uses a product’s trend component, cyclical component,
seasonality and irregular components to forecast the future value of the product over a given time
period. Decomposition looks at each component separately to determine a forecast value for the
specified component and then combines the data output into an overall forecasted value. A variety
of statistical decomposition methods exist.
 Simple Exponential Smoothing
 Unlike decomposition, which uses the entire history of a product as the forecast input, simple
exponential smoothing uses a weighted moving average. Because simple exponential smoothing
seeks to reduce, or smooth out, the irregular patterns in a product over time, this forecasting method
works best with products whose main component exhibits strong cyclical and irregular patterns.
 Census X-11
 Census X-11 resembles a standard decomposition method because it uses the same variables trend,
seasonality, cyclicality and irregularity as forecast inputs. The difference comes from how it uses
these variables. It places more emphasis on the seasonal and cyclical components of the product.
Census X-11 also uses a specific number of trading days in the month. Using trading days allows
this forecast method to weigh the future forecast by the number of trading days used in the forecast
input.
 Techniques
 All forecasters use a different technique when performing forecasting activities. Some forecasters
prefer to forecast in a vacuum—not using input from other sources other than the data.
This technique rarely works for any extended period of time. In most businesses the best source of
data comes from the human elements involved in the business. Forecasting in a vacuum disregards
this important source of data. Collaborative forecasting techniques such as collaborative planning,
forecasting and replenishment use internal company resources and resources from suppliers to
create a mutually agreed upon forecast.

Sales planning
A plan containing an assessment of current sales for a product in a given region or market, a statement
of sales objectives, strategies for achieving the stated sales objectives, and resources available for

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 achieving this goal. A sales plan may also assign particular sales representatives or other staff to
particular roles or territories, and may include a breakdown of who will focus improving sales for
which product.

Sales planning process

The sales planning process is very important for an organization as success cannot be achieved by
haphazard actions. Sales planning process is usually done in the second stage of planning and can be
carried out only when the company has a strategic marketing plan in place.

The first thing that an organization does is make a strategic marketing plan. Once the strategic marketing
plan is made, the organization knows the segment that has to be targeted, and also, the consumer buying
behaviour for that segment. Accordingly sales planning is done.

Let us go through the sales planning process with the example of Air conditioners

1) Setting objectives – Your sales planning is going to start only when you have defined the objectives for
the sales team. For example – The objective of an air conditioning company might be to increase the
market share of the company. For this, it will have to penetrate a new geographic market. Thus the
objective of sales planning is to penetrate a new market to increase market share.

2) Determine the actions necessary – Once you know the objectives of your sales plan, you have to
forecast what actions you need to take and the operations which are needed in effect before you implement
the sales plan. This is a crucial step in the sales planning process because if you do not forecast the correct
operations strategy, then in future you will face operational difficulties which will hamper you in meeting
your sales objectives.

For example – The air conditioning company needs to penetrate a new geographic territory to increase
market share. Thus it needs Sales as well as service operation backup in this territory. The marketing
department should also know the new territory so that they can come up with aggressive marketing tactics
to target that territory.

3) Organize your actions – Coming back to the first point – haphazard actions will never bring results.
Once you know the operations that are necessary, you need to organize your sales planning. For example –
The first priority of the air conditioning company in new territory will be to have a service setup. Than to
have a sales setup and the necessary channel in place. Once that happens, they will have to bombard the
new territory with aggressive marketing tactics. Thus an organized action plan needs to be made during the
sales planning process.

4) Implement – Once you have your actions planned and organized, implementing them is the next step.
Although it may sound easy, there are many real time and real world problems you may face while
implementing a sales plan. For example – The customers of the new territory might not respond to the new
air conditioners entering the market. On the other hand, the product might be picked up readily by the

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customers and you might not be able to adapt with the unexpected demand which can make your brand lose
face from the start.

5) Measure results – As in any planning process, the fifth and very important step in the sales planning
process is to measure the results. Unlike advertising, sales results are very easy to measure because
everything is documented and recorded. For example – the air conditioning company will measure the total
sales of the geographic territory in study. At the same time it will find out the competitors sales as well for
record keeping.

6) Re evaluate – When you have the sales records in hand, ensure that you analyse the sales records to
know whether or not the sales planning process has succeeded. The analysis will tell you what you did
right and what went wrong. Thus, based on the analysis you can know the good work that has to be
repeated as well as the bad work which has to be avoided.

For example – Your sales report shows that you have succeeded in penetrating the new geographic
territory. This stage will help you set your objectives for the next year and you will plan increasing your
brand equity through quality of sales and service. If on the other hand, you have failed to penetrate the
market, then you need to study the reasons which caused the failure and in the next year, sales planning
should be done taking these negative results into account and the sales objectives should be re planned.

Remember that sales is a dynamic process and your competitors are themselves watching you all the time.
In the above example, the air conditioning segment is one of the vigorously growing segments across the
world and it comes with its own share of challenges. Thus your sales planning will go a long way in
implementing your organizations visions as well as in implementing the strategic marketing plan.

Here are seven steps you can take to create an effective sales plan:

1. Define your objective. Clearly outlining your goal should always be your first step in planning a sales
call – or any other business endeavor. Is your purpose to establish yourself as a trusted advisor? Close a
specific deal? When you define your key objective, you can plan later steps around achieving it.

2. Evaluate the current situation. Next on the list is an honest assessment of the situation, and it will
relate to the goal you set in the first step. If your objective is to expand your relationship with a customer,
an evaluation of the current situation would consist of defining your present relationship.

3. List barriers to success. This step can be one of the most critical to achieving your goals: Create a
detailed account of obstacles to your success. Knowing exactly what you’re up against can be incredibly
inspirational, sparking new ideas about how you can overcome barriers.

4. Assess your strengths and assets. Take an honest look at your resources and think about how you can
apply them to achieve your objective. Strengths and assets can include things like personal relationships,
sales kits, competitive advantages like new products and much more.

5. Create your sales call strategy. Using the information you’ve compiled in steps one through four,
develop your sales plan by outlining how you’ll reach your goal. Depending on the situation, your plan
might include the sale of a specific product and the steps you’ll use to persuade your prospect.

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6. Identify your needs. Once you have your basic strategy in place, now is the time to outline what you’ll
need to get the job done. Your needs may include items like a sales deck or demo program. Requirements
could also include a list of accounts. The important thing is to identify needs upfront.

7. Outline an action plan. The action plan is a companion piece to the sales call strategy described in step
five: It is a to-do list of tactical steps you’ll need to accomplish the strategy. The action plan might include
items such as finalizing pricing with your company before you make the sale.

Sales professionals, perhaps especially those who have been in the business for awhile, often neglect to
thoroughly plan sales calls, counting on their experience and confidence in their ability to think on their
feet to carry them through. And while that strategy may generate adequate results, it doesn’t prepare the
sales professional for every contingency and may produce less than stellar returns.

In just about every other facet of life, accomplishing an important task requires careful planning, be it
hosting an event, winning a baseball game or putting together a vacation itinerary. The same is true of
sales: No matter how experienced you are, having a solid game plan will give you that much more
confidence and free you to focus on every new opportunity.

Techniques of Sales Forecasting

The purpose of a sales forecasting plan is to allocate company resources with an objective to achieve
anticipated sales. An organization can forecast sales either by forecasting market level sales (market
forecasting) and determining what share of this will accrue to the company, or by forecasting the
organization’s sales directly.

Sales forecasting is actually the art and science of predicting the future demands by anticipating how
consumers are likely to behave in a given set of circumstances. A company might ask ‘what will be the
demand if real incomes increase by 10% or how would the demand be impacted if a competitor launches a
similar product. Other functions in organization – production, purchasing, finance, HR plans – are also
affected by the sales forecast.

One of the best methods of sales forecasting is to consider recent past sales of the company. As the
business environment does not change all of a sudden, the sales figures of the last quarter help management
know the kind of sales they can expect in the coming months. When applied quantitatively, this is known
as the Time Series approach to forecasting sales. Different components of Time Series Analysis are
Seasonal Analysis, Trend Analysis, Cycle Analysis, and Random Factor Analysis. Usually all of these
components are applied to the analysis and computations.

Using market research data is another quantitative method of sales forecasting. The technique involves
directly asking people what they intend to do in the future. A number of large market research firms
continually gather such information. They may ask consumers questions like “do you intend to purchase a
tablet in the next month/3 months/6 months/year, or later?” Such firms may also conduct research upon
salary ranges and if the consumers expect to be better off or worse off in future. The results of these
surveys allow businesses to predict sales patterns across a wide variety of consumer durable goods.

Sale forecasting techniques can also be qualitative. Some organizations use the Delphi Technique for
forecasting sales. A “delphi” starts with development of a questionnaire focusing on the problem. A panel
of experts is chosen and the questionnaire is sent to them. Each participant answers the questionnaire
independently and returns it. Responses to the questionnaire are summarized and a further questionnaire is

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developed, based on the findings of first questionnaire. The revised questionnaire is sent to the same panel
of experts. The members of expert panel independently rate and prioritize ideas included in the second
questionnaire. The process is repeated until those who are investigating the issue feel firm positions in the
expert group and agreement on a topic is reached. The budget for production and sales is planned as per
expert group’s responses and ideas.

Another qualitative method of sales forecasting is Brainstorming, a group technique used to generate new,
useful ideas and promote creative thinking. Brainstorming is most effective with groups of 6-12 people and
works best with a varied group. So within an organization, a brainstorming session should include
participants from different departments and from different backgrounds.

RepHunter helps companies to find sales representation, and independent reps to find new lines. These reps
not only make it possible for companies to expand their market reach and increase revenue, but also help to
provide input for the prediction of sales for your business. Experienced sales reps understand the realities
of the market and help businesses to become aware of those conditions, especially as it affects their
customers. In particular they can provide the type of market intelligence necessary to the market research
described above for surveys or a delphi. With more control over your sales profile, it becomes easier to
improve your visibility, revise and upgrade your product lines or target markets, and make other changes in
business plans without delay.

A sales target is a goal set for a salesperson or sales department measured in revenue or units sold for a
specific time. Here is the complete definition of a sales target as found on.

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