UNIT 1

Introduction to Sales Role of selling in Marketing

Selling is one of a number of tactical activities within marketing such as pricing and advertising.
Co-ordinating these is essential for effective marketing. Differences in importance depend on the
companies and industries involved. A successful sale depends on whether or not the product
concerned fulfils the customer requirements and results in satisfied customers.

Relationship with Marketing Research

Marketing research finds out what people want and why they want it. Information might result in
changes in the product. Such information is fed to the sales department and can be used by them
to counter competition. Cowan5 argues that in the past market research has often failed to
identify significant changes in markets or new innovatory products. Because of close contact
with customers and markets however, the sales force in particular can be used to provide market
intelligence information that feeds into the Marketing Information System (MkIS) and helps
shape marketing strategy.

Some companies focus on meeting customers’ needs, which is called implementing the
marketing concept. In contrast, implementing the selling concept involves doing whatever is
necessary to increase sales. Despite the fundamental differences between these two orientations,
the ultimate objective of both the selling and marketing concept is profit.

Marketing Concept

The marketing concept involves orienting your business to meet consumer needs. For example, a
company might identify a consumer need and then manufacture a product to meet that specific
need. Then, through a coordinated set of marketing activities — such as widespread distribution
and attractive pricing — the company creates access to its product. Consumers fulfill their need
by buying the product, resulting in a profit for the company.

Selling Concept

In contrast, the selling concept refers to orienting your business to sell as many products as
possible. For example, suppose a company manufactures a product for which there is no current
consumer need. To make a profit, the company must use aggressive tactics, such as heavy
advertising and pushy sales strategies, to convince consumers to buy the product. Achieving a
high sales volume is how the company makes a profit.

Interaction

Although the marketing concept and the selling concept involve fundamentally different
organizational objectives, selling plays a role within the marketing concept, and marketing plays
a role in the selling concept. For example, a customer-oriented company still must make sales to
customers — after all, its ultimate goal is to use the sale to meet the customer’s needs. Similarly,
marketing plays a role within a sales-oriented company. For example, a company can increase its
sales volume by using advertisements to bolster its reputation for excellent customer service.

Considerations

Well-run companies that are focused primarily on customer satisfaction don’t need aggressive
selling strategies. Instead, such a company can rely on identifying a clear consumer need and
then coordinating its marketing strategies to ensure consumers have access to the desired
product, according to the book “Marketing Concepts and Cases.” Done correctly, the role of
selling within the marketing concept is to help a customer make a purchase, as opposed to
persuading the customer to make a purchase.

Personal Selling
Personal selling can be termed as the oral presentation given by the salesperson to one or more
than one consumers face to face to sell the product or service. Personal selling is a highly
peculiar form of promotion. It is mostly two-way communication, which not only involves a
particular individual but also social behavior.
 The intention is to deliver the right product to the right customers. Depending upon the
complexity of product, personal selling plays an important role. Industries manufacturing
technical products like laptops, computers, digital phone, gadgets, etc., likely depend on personal
selling as compared to the other manufactures.

The reason behind this is to explain the features of the product, tackle the customer queries and
provide the best customer service. The competition in the market has increased today and
therefore the importance of the salesperson in the organization.

Salespersons are also called salesman or salesgirl or sales representative and their payment is
made as the commission to push the product in the market by motivating the customer through
oral conversation.

The consumer wants all kinds of goods and services in the market but lack of interest keeps them
away from making decisions or purchasing products. This is where the salesman needs to act as a
catalyst and explain the product or service to the customer. He/she should motivate the customer
by giving a presentation and he may sometimes act as a consultant. This helps the consumer to
make a decision.

In case of technical products, the salesperson plays a more vital role as compared to the
promotions. It becomes difficult for the customers to make decision while purchasing high value
products with complex nature. The salesperson helps the customers by making personal contact
with them and making them understand the quality and utility of the product.

Objectives of Personal Selling

Personal selling contributes in achieving the long-term objectives for the organization.

 To do the complete selling job when there are no other components in promotional mix
 To provide service to the existing customers and try to maintain contacts with the present
customers
 Identify and find new prospective customers
 Promote the products to increase sales
 Provide the information to the customers regarding the change in product line
 Provide assistance to the customers to help in decision-making
 Provide technical advice to customers for complex products
 Gather the data in relation to market and provide it to company’s management

The reason behind setting personal selling objectives is to make decision on sales policies and
personal selling strategies, which helps in promoting the product. The objectives are set for long-
term, as it becomes the important element for qualitative personal selling objectives.

The objectives can also be quantitative if they are short-term and it could be adjusted from one
promotional period to another. The quantitative personal selling objective is related to sales
volume objective. Hence, the sales volume objective should also be explained.
Personal Selling Process
 Sales Manager
The topline objective of a sales manager is to meet company revenue targets through the
activities of their sales representatives. In other words, they harness the power of their direct
reports, driving sales force productivity and extracting the best performance from each individual
employee.

A sales manager achieves this objective through a mix of approaches. For example they:

Are responsible for motivating and advising their reps to improve their performance, as well as
hiring and training new sales representatives.

Achieve their objectives through effective planning, setting sales goals, analyzing data on past
performance, and projecting future performance.

Ensure that the sales department works cross functionally with executives from other
departments. For example, they collaborate with marketing to generate new lead sources and
expand the target customer base, or with product and research teams to make sure customer
needs are met.

A sales manager simultaneously plays three key roles:

 People manager: Recruit, build and nurture a team.

 Customer manager: Strategically foster customer engagement.
 Business manager: Steer the business.

Characteristics of a top Sales Manager

A successful sales manager’s characteristics, skills, and aptitudes are different from those of a
successful sales representative. In fact, most sales reps make bad managers. The key
characteristics of a sales manager focus less on selling ability and more about the interpersonal
skills that enable leadership.

Rather than “doing it themselves,” they teach and coach others how to do it, enabling the sales
efforts of others. They develop their own leadership, hiring, and training skills while ensuring
their team is using the correct selling behaviors and activities to meet their revenue objectives.

Typical characteristics, skills, and traits of a sales manager include:

 Communication skills: they listen first and speak second. They don’t chastise in public or
private. They are aware of the message they transmit to their team, how it’s delivered, and how
it’s perceived.
 Integrity and trust: they never ask their reps to do something immoral, illegal, or something
that goes against a company’s core values.
 Ability to build relationships with peers, cross-functional counterparts, and upper management:
They are committed to helping others be successful.
 Empathy and ability to understand customer viewpoint and customer service
 Ability to unite a team under a shared vision and know what motivates each member.
 Analytical skills: They use data-driven reports to spur sales coaching sessions and empower reps
to take ownership of their opportunity pipelines. They understand pricing, margins, and
discounting impacts.
 The ability to prioritize and effectively manage time.

Types of Sales Personnel

If you run a business in which sales are a key aspect of profitability, you need to hire staff that
has the requisite personality and skill to drive success. There are many different types of
salespeople and some are better than others at closing deals. The most successful types of
salespeople are the ones that understand how to use their talents to connect with customers and
clients. To build your business and watch it grow, you must understand the basic types of
salespeople so you can hire the ones that can positively impact your company.

1. The Caretaker Salesperson

The caretaker is one of the most common types of salesperson that you can hire. Also known as
transactional salespeople, these are employees that are often passive and are content to find a
comfort zone that they rarely ever leave. They are often known as order-takers because rather
than hunting for a potential sale, they wait for the sale to come to them. Caretakers are the types
of salesman that are risk-averse, which means that they don’t want to take the chance on a
prospective customer rejecting their sales pitch. They will often provide small businesses with
competent, steady performance because they are adept at positioning themselves in the right
place at the right time to get a sale. If you run a retail business in which the primary job of your
sales staff is to help buyers find the products they are already looking for, you should hire a
caretaker.

2. The Professional Salesperson

Another one of the most popular types of salesperson is the professional or the relational sales
personality. The professional has strong analytical skills and is able to reason his way through
problems. The professional develops good customer/client relationships by building a rapport
and connecting with customers and clients by understanding their wants and needs. With these
types of salesperson, the goal is to establish a bond that is based on fulfilling expectations.
Professional salespeople often get sales because buyers trust them to deliver on what they’ve
promised. Professionals are the types of salesman that excel in advertising companies or any type
of sales companies in which servicing existing accounts is important.
3. The Closer Salesperson

Closers are the type of salesman that you often see parodied in used car commercials on TV.
They are distinguished by qualities such as persistence, brashness, and a healthy dose of self-
confidence. They are often referred to as “born salespeople,” because their mindset is to always
be closing a deal, even if the prospective buyer is reluctant to buy. Closers are always finding
ways to encourage, coerce, or push customers toward the goal of closing a deal. They are not
concerned as much about building future relationships as they are about finalizing the deal that’s
in front of them. Closers often have outgoing personalities that can sometimes border on being
too aggressive. They don’t take “no” for an answer and they’re able to offer incentives and
enticements in situations in which customers need that final push to close a deal.

4. The Consultant Salesperson

Consultants bring the qualities of a closer with the personal connection often found in
professionals. They are well-rounded salespeople who know how to close a deal and build
relationships at the same time. They aren’t afraid to solve problems for their customers and to go
the extra mile with incentives in pursuit of a long-term relationship. They are skilled at tailoring
their sales pitch to each customer’s needs and they are active listeners who are patient when the
need requires, but they can also be aggressive with customers who are on the cusp of saying
“yes” to a deal.

Characteristics of a Successful Salesman

More than a job, successful selling is a result of skill and practice. Like all other skills, great
selling techniques cannot be acquired in a day. The most successful salespeople work incessantly
toward improvement, practice regularly, and grow incrementally with each experience.
Acquiring killer sales skills requires time and dedication. This post outlines the characteristics
that, when developed, can turn a good salesperson into a great salesperson

10 Essential Characteristics of Highly Successful Salesman

1. Upbeat

Hearing negative responses on a regular basis can be extremely disheartening. Unfortunately,

there’s no way around this in sales. But for successful people, “no” does not mean the end.

“No” in sales doesn’t always mean no permanently, it just means no for right now.

Successful salespeople are those who have emerged stronger out of the most difficult of
situations. They face them with a positive attitude; learning from them and always seeing light at
the end of the tunnel.
2. Passionate

Passion is not just working towards meeting a specific quota for a successful salesperson. Truly
passionate salespeople are those who work towards higher goals like excellence and building
long-lasting relationships.

The best salespeople are passionate about making a change in people’s lives and work towards it
every single day. They know that every part of the sales process is important and do not make
the mistake of not taking closing seriously. They are passionate about growing in their careers,
making sure they always give their A game.

3. Ingenious

The most successful salespeople are creative and think about unique ways to solve problems for
their clients. They come up with novel ideas when most people form the same conclusions.

Top performing salespeople have the ability to look at things differently. Their brilliant
analytical skills enable them to offer different solutions that others normally don’t see. They are
resourceful and make the best out of what they have.

4. Empathetic

Empathy and compassion are prerequisites to great customer service. Empathetic salespeople
listen intently to what actually affects people and provide them the complete liberty to express
their concerns.

They try to understand people by putting themselves in other’s shoes from a neutral perspective,
without letting judgment or an ulterior motive guide them. This helps them understand people
better and interact accordingly.

5. Accountable

Highly effective salespeople know how to take full responsibility for their own actions and do
not blame other people or external influences that can affect results.

They take complete ownership over their work and ways to do it and do it with full dignity and
respect. They hold nobody but themselves accountable for whatever results may arise, both
positive and negative.

6. Well Prepared

Impressing clients and making them buy a product is no cake walk. It requires a tremendous
amount of research, confidence and flawless execution of pitches.
 Effective team members use all their resources and time to find out what exactly they are going
to pitch to different clients and tailor their presentations accordingly.

They do NOT go on and on about products and services but offer something of value through a
conversational approach, which is jargon-free.

7. Tech-Savvy

The most successful salespeople are always ahead of the game for a reason – they invest their
time in educating themselves.

Winning salespeople keep themselves updated on latest market trends, products, technology, and
competition in their niche.

They also use all kinds of sales tools to participate in professional development and stay
motivated.

They keep a variety of tools handy that can help them learn about things that help them perform
better.

8. Highly Engaged

Highly successful salespeople are engaged and love being a part of the organization they
represent. They love their job and the people they work with. Because they believe in the product
and feel motivated, they sell with the utmost conviction.

On the contrary, their organization also invests in them, which helps them retain these superstars.
They participate actively in assessments, surveys and training programs, look up to their leaders
and reap the benefits of the resources available to them.

9. Goal-Oriented

The ability to set (and stick to) personal and professional goals is definitely a common
characteristic of the most successful salespeople.

Top sales pros know exactly what they want to accomplish (and by when) so they will plan
around these targets accordingly.

This requires focus and setting ambitious, but achievable goals. As a result, the salesperson must
be extremely persistent and hardworking.

Successful salespeople get goals that help them grow as an individual and as a professional. They
have long-term goals which require patience and practice.
10. Relationship Driven

The most effective salespeople know how to deal with a variety of clients, and being versatile
with each type.

There will undoubtedly be wins and losses. However, the most successful salespeople never say
goodbye to clients. They reach out to the ones who have said no in the past, and they are also
available to assist those they have sold to.

The best salespeople know the importance of building trust and ensuring satisfaction. They also
know these things can take time, which is why they follow up with prospects and clients
regularly over time, not only when they’re critical to a deal.

Theories of Selling

Selling is a key element of a company’s promotional mix. It is one-on-one interaction between a

salesperson and a prospect. In the early 21st century relationship-oriented consultative style
approach to personal selling, salespeople get to know prospects, find out their needs and make
honest recommendations about product or service solutions. A number of theories help sellers
better understand the role they play in selling to customers.

1. Maslow’s Hierarchy

One of the foundational need theories in psychology is Maslow’s Hierarchy of Needs. Abraham
Maslow introduced his five levels of human need in a 1943 paper. He indicated that people have
five basic needs, which they address in order of priority. Physiological needs are first, followed
by safety and security, social belonging, self-esteem and self-actualization. This theory has huge
value in selling in that salespeople get to know prospects and ask questions to discover their
needs in a buying situation. Realizing where people are coming from on the Maslow pyramid is a
part of a seller’s emotional intelligence. For instance, car buyers may be most concerned with
basic survival or security and want an economic, dependable vehicle. Others buy cars for social
or esteem reasons.

2. Buyer Resolution Theory

The buyer resolution theory, also known as the 5 W’s, provides a simple framework of questions
salespeople must address to get a prospect to buy. The questions are “Why should I buy?”,
“What should I buy?”, “Who should I buy from?”, “What’s a fair price?”, and “When is a good
time to buy?” These questions also relate to the five common categories of buyer concern. In
essence, if a salesperson can effectively answer all of these questions in an optimal way for a
prospect, he should be able to close a sale.

3. Consumer Decision-Making Process

 The consumer decision-making process is the common steps buyers go through en route to a
purchase. The process begins with need recognition, which is the through that triggers a buyer to
consider a purchase. He then moves to information search and development of a consideration
set. After evaluating options on critical criteria, he purchases what he believes is the best value
solution. After experience the product or services, he assesses the value relative to expectations.
Understanding this systematic approach buyers use, sellers can help from the beginning by
suggesting needs or desires buyers may not even recognize yet. During the information search, a
seller needs to present his solution as a good value. During and after purchase, customer service
for an ongoing relationship becomes key.

4. Dominant Buying Motives

Two comparisons of buying motives offer insight into where a particular prospect is coming
from in a buying scenario. Emotional versus rational buying motives is a comparison of
purchases driven by emotion and sentiment or rational thought processes. Patronage versus
product motivation is an assessment of a buyer’s interest in a product or in buying from a given
firm. Knowing whether a buyer is more emotionally or rationally involved helps salespeople
organization their persuasive efforts. In general, though, emotional appeals tend to carry more
weight even with rational buyers. While sellers want to sell quality products, they also want to
develop relationships with buyers to encourage long-term relationships and patronage
motivations.

Functions:
(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.

Process of Effective Selling

Steps in Sales Process

Experts have suggested a five-staged formula known as A-l-D-A-S for effective selling process.
However, this formula is more closely related to sales presentation (only one step in selling
process), and not the entire selling process.

The formula has been briefly discussed here:

(I) ‘A’ – Attention calls for drawing attention or attracting of prospect. Salesman should try to
adjust his talk with the needs of prospect or should talk according to the interest of potential
buyers.

(ii) ‘I’ – Interest calls for making the customer interested in products. Salesman should do all
possible efforts to arouse customer’s interest in product.

(iii) ‘D’ – Desire calls for arousing and increasing desire for product. Customer can ask for more
information. Salesman must handle problems, doubts, and objections with patience. Here, buyer
can be prepared to buy the product.

(iv) ‘A’ – Action calls for getting positive action of customer in terms of placing order. Here, the
prospect becomes the actual buyer.
 (v) ‘S’ – Satisfaction calls for taking necessary post-sales steps to satisfy the buyer.

1. Presales Preparations

Presale (before sales) is the step of getting ready to serve customers. A wise sales person must be
well-prepared or well-equipped to treat the customers effectively. He must be aware of prospects
to be served in terms of their buying motives and buying behaviour.

He must know about the company’s products, pricing policies, promotional efforts, and
distribution network. Similarly, he must have complete detail about the company’s history,
goodwill and reputation, achievements, objectives, and general policies.

In the same way, he must be familiar with competitors’ offers and overall marketing
environment. In short, he must prepare himself to deal with customers successfully. It is like the
homework before the examination.

2. Prospecting

Prospecting means finding or locating the potential customers. A prospect is a probable buyer
with unmet needs, ability to pay, and willingness to buy.

Sources:
There are a number of sources to locate prospects, such as:

 Present customers
 Other salesmen
 Company’s present employees
 Use of telephone directories
 Directories of professional and other associations
 Customer database prepared by companies or other professional agencies
 Other relevant sources.

3. Pre-approach

Once the prospect is located, now, salesman has to collect necessary detail about him. Such
detail helps him prepare his plan for sales presentation. Salesman collects adequate information
about customer’s nature, needs, problems, personal habits, preferences, and other aspects of
behaviour.

Salesman’s sales talk and sales presentation must be consistent with the nature of prospect. In
brief, a salesman must know everything about the potential buyer to whom he has to meet in the
near future.
4. Approach

Now, a sales representative has to seek advance appointment/permission for personal meet.
Sometimes, he can use phone or send business (visiting) card to take advance appointment. In
many cases, salesman can directly meet prospect without advance permission. Approaching
method depends on type of prospects.

Anyway, this is the step where a salesman comes in a direct (and face-to face) contact with
potential customer. At the time of the first meet, he has to greet him in an appropriate manner
and has to briefly introduce himself.

Immediately, he must initiate brief talk and adjust with the situation. The first contact is very
critical. Salesman must be able to attract the prospect’s attention and get him interested in the
product. Note that he must not directly jump to sales talk.

5. Sales Presentation

This steps calls for a formal presentation of product. It includes sales talk and demonstration.
Salesman should describe the offer in a suitable language, show the product, and, if needed,
demonstrate it. In case of edible product, he may offer sample to taste. Sales presentation is
closely related to buying process.

In this step, a salesman must get attention of customer and make him interested in the product.
Salesman can do it through a lively and interesting sales talk as well as a systematic
demonstration of product or offering samples to use and taste. Visual device can be used for
sales demonstration. He can produce authentic evidences to prove the product’s superiority. All
queries must be adequately solved.

6. Handling Objections and Complaints

Once a salesman completes his sales presentation, normally, customer raises objections and place
complaints. Salesman may confront objections during his presentation, too. Objections and
complaints show that customer is interested in the products, and is more likely to place an order.

Salesman must always welcome objections, interpret them clearly, and remove tactfully. Unless
the objections and complains are satisfactorily answered, the sales cannot take place. Genuine
objections should be interpreted correctly and removed tactfully.

Prospects must be convinced about benefits, superior performance, and strong aspects of the
product. A great deal of expertise, experience, skills, and patience are important qualities to face
buyer’s objections and complaints successfully.
7. Closing Sales

Closing of sales refers to completing sales procedure. It concerns with purchase decision. The
close can be defined as: An act of actually getting the prospect’s assent. It is the climax, or the
desired outcome of the entire sales process. Sales process ends with getting orders. A successful
salesman must close the sales. An alert salesman must find out the right moment to get
customer’s consent, it is called the reaction moment. Salesman must not wait for customer to ask
for product, initiative must come from salesman.

8. Post-sales Actions

It is known as follow-up actions. Virtually, sales process ends with getting the order from buyers.
But, getting order is not the ultimate goal of salesmanship, the transaction must take place. The
step involves two actions – one is, completing of selling formalities and, the second is, taking
other post-sales actions.

Salesman writes order, arranges for dispatch and delivery of the product, and decides on the
mode of payment. Sometimes, the product is handed over immediately or is delivered thereafter.
Bill and guarantee card are issued. Sometimes, he provides extra guidance for proper and safe
use of product. In short, all selling formalities are completed.

Once product is delivered and sales formalities are completed, it doesn’t mean that sales process
has ended forever. Delivery of product to customer is not the end, but an event. The event must
be repeated. Salesman-customer relationship doesn’t end with one transaction, but is the
beginning of long-term relationship.

Customers repeat orders only if they are satisfied with products and post-sales services.
Customers’ future response depends on salesman’s post-sales behaviour and services. Therefore,
salesman must undertake necessary actions to ensure maximum customer satisfaction and to
avoid unexpected behaviour of buyers.

Salesman must remain in live contact with customer to know whether he is satisfied. If customer
is not fully satisfied, the salesman must find our reasons or problems and must try to provide
satisfactory solution. Even, dissatisfied customers can be prepared to try/buy the product again
with suitable follow-up actions.
 Building Sales Organization
7 Steps to Building Your Sales Organization

Building a high performing sales team that exceeds all corporate objectives is essential for any
business. Your sellers are not only the front lines driving customer perceptions about your
company, but are the critical path to sustainable results.

As a Sales Manager or Corporate Executive, focusing your efforts around setting a clear path to
success, providing the proper training for every seller, and determining the correct methods of
motivation, will ensure you consistently exceed all of your business objectives.

There are seven key areas every leader should thoughtfully organize their strategy around while
building exceptional sales and support teams. Drive consistency in all actions and accountability
throughout the organization.

1. Culture

Instill your company mission statement and corporate culture into all of your functional teams,
especially your sellers. There are a lot of exceptional sales representatives in the market today,
but understanding and aligning your corporate culture with each individual you hire will pay
dividends as your business grows.

Build a “Sales Culture” – This means you are aligning the right sales support, operations and
product development teams around the principals of sales execution. Set the tone with all teams
regarding the importance of sales success, as this will drive everyone’s day to day priorities and
focus on the teamwork needed to execute.

Set your sellers up for success by surrounding them with motivated functional teams. Incent
great sales support by implementing regular award programs tied to the individual, function or
corporate results.

Great sellers thrive when motivated both financially and through award recognition, ensure both
are aggressive and consistently drive toward exceptional individual performance based results.

2. Talent

Know your target seller both with tangible and intangible characteristics. Focus on the required
experience criteria and create a set of interview questions that will give you the best
understanding of their intangibles. Set your compensation plan accordingly, ensure your top reps
thrive allowing earning potential that will exceed the industry

3. The Market
 To deliver the proper value proposition and positioning, understand your key differentiation to
the competition, segmented target customer sets, cost basis for your product or service and
profitability needed to drive the success factors for your business.

Know the available opportunity set, from either a customer count by segment or market revenue
potential. Back into performance expectations based on the available opportunity set. If this is
difficult to determine, place prior sales history as a benchmark targeting an annual growth rate
you would like to see by rep or territory.

You should always look to the granularity of your financials, driving profitability in all deals the
sales teams close. Whether you are paying on a Gross Margin or Revenue basis, create a cost
model providing your teams with some flexibility in price or structure throughout the negotiation
process.

4. Value Proposition and Positioning

Develop a handful of customer segmented value propositions your teams should leverage. This
will provide relative control and consistency in how your product or service is publicized. Push
your sales teams to deliver the message in all training and onboarding exercises to the
management teams, ensuring the proper forum for coaching all aspects of delivery.

Confidence is key in all sales messaging, so push for continuous repetition and refinement
through the coaching sessions. Mentor programs with successful reps is another valuable
practice.

It’s always an awkward form to place a mirror in front of the seller, but body language is often as
important as the message itself. For inside sales reps, placing a mirror in front of their phones
and pushing them to smile as they speak is an old practice that absolutely works

5. Pipeline Metrics

The science of sales is all about the numbers. Pipeline management is critical to understanding if
a small pivot is needed in your message, product set or the price of your product/service.

Start with Lead Generation and create a pipeline management model that will track conversion
rates for each step of the process. From Prospecting, Opportunity Management, Revenue to
Existing Customer Growth; understand how business moves through the pipeline focusing on
short timeframes and success benchmarks.

Track and review regularly lost opportunities asking your reps to provide detail about the
reason. Management teams should hold regular meetings to discuss both sides of the pipeline to
ensure their offer is well positioned in the market.

6. Management
 The core role of an exceptional manager is to “Train and Motivate”. Consistency is always king
when inspiring a team, but collaboration and an understanding of the hurdles they face will drive
awareness by each individual to value their contributions as an effort towards the greater good of
the company.

Regular sales meetings where you can take the pulse of your sellers and provide them with the
encouragement needed to exceed all objectives is critical. I suggest holding an early week
meeting to help the team transition from a relaxing weekend into a motivated seller. Reviewing
weekly goals, a forum for feedback and highlight exceptional performances as a format for team
motivation.

All sellers get told NO a lot, so the goal of a successful management team is to create an
environment for positive motivation that will instill confidence in each rep.

Keep all aspects of both motivation and accountability on a short-term basis. Instill the value of
consistency each day working towards exceeding their short and long-term goals.

7. Reporting

Regular visibility to highlight top performers, an understanding of how the team is tracking to
their overall goals and the evaluation of your current state of the business, will give you the
insight needed to deliver consistent success. Great sellers are goal oriented individuals who take
pride in their results and always want to see how they are performing against other sellers in
addition to contributions to the greater good of the organization.

Show your teams where the business stands and why their efforts are so valuable to the
company. Great employees look for purpose in their work, so make sure that they feel a part of
the overall success of the business.

Types of Sales Organizations and their Structure

The grouping of activities into positions and the charting of relationships of positions causes the
organization to take on structural form. When sales department is set up in an organization it
follows one of these general structures – Line, Line and Staff, Functional and Committee.

1. The line sales organization

 This is the oldest type used in smaller firms and in firms where there is a small selling force. This
limitation restricts them to narrow product line in limited geographical area.
 All executives have line authority and each subordinate is responsible only to one higher-up.
 They have fixed responsibilities and sales personnel reports directly to the chief sales executive
 Lines of authority and responsibility are clear and logical, and it is difficult for individuals to
shift or evade responsibilities
 Not appropriate when there is a large sales staff

2. The line and staff sales organization

 Found in large and medium sized firms selling diversified product lines over a wide geographical
area
 Provides the top sales executive with a group of specialists and experts in dealer and distributors
relations, sales analysis , sales organization, sales personnel, sales planning, sales promotion,
sales training, service, traffic and warehousing
 Staff sales executives do not have authority to issue orders or directives.
 Staff recommendations are submitted to the top sales executives and after approval, transmit
necessary instructions to the line organization
 Gives time to the staff executives time to study problems before recommendations.

3. Functional sales organization

 Based upon the concept that each individual in an organization, executive and employee, should
have as few distinct duties as possible
 Salespeople receive instructions from several executives but on different aspects of their work
 All specialists have line authority and they have a function authority
 There is a great improved performance
 Not feasible for small and medium sized firms

4. Committee sales organization

 The executive group plans policy formulation while implementation of plans and policies is done
by individual executives
 Many firms have a sales training committee
 Before policies are made and action is taken, important problems are deliberated by committee
members and are measured against varied viewpoints.

Structure of sales organizations

1. Geographical Structure

An advantage of this form of organization is its simplicity. Each salesperson is assigned a

territory over which to have sole responsibility for sales achievement.

Their close geographical proximity to customers encourages the development of personal

friendships which aids sales effectiveness. Also, compared with other organizational forms, e.g.
product or market specialization, travelling expenses are likely to be lower.
 A potential weakness of the geographical structure is that the salesperson is required to sell the
full range of the company’s products. They may be very different technically and sell into a
number of diverse markets.

In such a situation it may be unreasonable to expect the salesperson to have the required depth of
technical knowledge for each product and be conversant with the full range of potential
applications within each market. This expertise can only be developed if the salesperson is given
a more specialized role.

2. Product Specialization Structure

One method of specialization is along product lines.

Conditions that are conducive to this form of organization are where the company sells a wide
range of technically complex and diverse products and key members of the decision-

making unit of the buying organizations are different for each product group.
 If the company’s products sell essentially to the same customers, problems of route duplication
(and hence higher travel costs) and customer annoyance can arise.

Inappropriate use of this method can lead to a customer being called upon by different
salespeople representing the same company on the same day.

3. Customer-based Structures (Industry-Based Structure)

The problem of the same customer being served by product divisions of the same supplier, the
complexity of buyer behavior, which requires not only input from the sales function but from
other functional groups (such as engineering, finance, logistics and marketing), centralization of
purchasing, and the immense value of some customers have led many suppliers to rethink how
they organize their sales-force.

Companies are increasingly organizing around customers and shifting resources from product or
regional divisions to customer-focused business units.

Another method of specialization is by the type of market served. Often in industrial selling the
market is defined by industry type.

Thus, although the range of products sold is essentially the same, it might be sensible for a
computer firm to allocate its salespeople on the basis of the industry served, e.g. banking,
manufacturing companies and retailers, given that different industry groups have widely varying
needs, problems and potential applications.

Specialization by market served allows salespeople to gain greater insights into these factors for
their particular industry, as well as to monitor changes and trends within the industry that might
affect demand for their products. The cost of increased customer knowledge is increased travel
expenses compared with geographically determined territories.
 Customer-based Structures (Account-size Structure)

Some companies structure their sales-force by account size. The importance of a few large
customers in many trade and industrial markets has given rise to the establishment of a key or
major account sales-force.

The team comprises senior salespeople who specialize in dealing with large customers that may
have different buying habits and demand more sophisticated sales arguments than smaller
companies. The team will be conversant with negotiation skills since they are likely to be given a
certain amount of discretion in terms of discounts, credit terms, etc., in order to secure large
orders.

Functions and Responsibilities of Sales Person

A salesperson is an important sales management position maintaining vital link between an

enterprise and customers, society, distributors, retailers and others. Nature of roles played by a
sales person is given as follows.

(i) Diagnostic

This involves a salesperson probing and finding the cause of a problem, i.e., why a customer
often changes a brand or why a customer is loyal to a particular brand.

(ii) Analyst

A salesperson analyses customer needs and market trends and identify the linkages.

Example:

A farmer prefers a motorcycle compared to a scooter, so marketer must segment rural middle
class for various types of motorcycles.

(iii) Information Provider

A salesperson is also an intelligent agent. He keeps the management informed of any significant
development in his territory, i.e., any strategic change of competitor etc.
(iv) Strategist

A salesperson being in the forefront of sales organization can command on time and route plans
of sales organization.

For Example:

A salesperson may at time make the announcement of a price change in his territory in such a
way that it will give him maximum benefit. Likewise, evolving a strategy to sell to an aggressive
customer is the role of a salesperson.

(v) Tactician

He is a tactician in the sense that he (or she) evolves tactics to win over the customer or enhance
distribution/retailer satisfaction. A tactic is a short-term action plan and is part of a strategy,
which is a long-term concept.

(vi) Change Agent

A salesperson acts as a Change Agent in his territory. For it is he who introduces new product
ideas and influences the life styles and consumption pattern by making new products and
services available in the territory and influencing opinion of manager to accept and recommend
the same to other salesperson.

Thus, the modern society owes a lot to salespersons, for it is they who help upgrade life style and
quality of living. The Selling process or The Selling Theories on which the salespersons depend
are Stimulus- Response Theory, Product Oriented Selling and Need-Satisfaction Theory.

Other Functions Performed by a Sales Person

(a) Line functions

i. Achieves volume of sales

ii. Responsible for enhancing market share

iii. Responsible for profitability of the organization

iv. Attends to customer service.

(b) Staff functions

i. Provides assistance for ware housing In charge

 ii. Provides assistance for Transport Department

iii. Provides assistance to Production Department regarding Product knowledge and knowledge
about specific customers.

(c) Line and staff functions

i. Helps General Sales Manager with sales fore-cost, market information and information about
competitors

ii. Helps Corporate Management in respect of product development, Diversification and

information about market and competitors.

Responsibilities of Sales Person

The duties and responsibilities of a salesman differ from one business to another depending upon
the nature of the business, the size of the business, the type of selling job, the sales policies of the
concern, etc. However, there are certain duties and responsibilities which are common to all
types of business.

Responsibilities of a Salesman

1. Selling

The fundamental duty of a salesman is selling. This duty includes meeting the prospects,
presenting and demonstrating the products, inducing the prospects to buy, taking orders and
effecting sales.

2. Guiding the buyers

A salesman should guide the buyers in buying the goods they want.

3. Attending to complaints

A salesman should attend to the complaints of the customers immediately and try to settle their
grievances quickly and sincerely.

4. Collection of bills

Sometimes, a salesman may be required to collect the outstanding bills relating to the goods sold
by him. In such a case, he has to collect the bills and remit the amount to his firm.

5. Collection of credit information

 A salesman may, sometimes, be required to collect information about the credit-worthiness of
the customers. In such a case, he has to collect detailed information and submit it to his firm in
time.

6. Reporting

A salesman, especially a traveling salesman, is required to send daily, weekly or monthly reports
to his firm, providing information about the calls made, sales effected, services rendered, route
schedule, expenses incurred, business conditions, competition, if any, etc.

7. Organizing

A salesman, i.e., a traveling salesman, is required to organize his tour programme. He has to
prepare the route and time schedules for his tour so as to systematize his sales efforts.

8. Attending sales meetings

A salesman is required to attend the sales meetings convened by his employer at periodical
intervals to discuss the marketing problems, sales promotion activities, sales policies, etc.

9. Touring

A traveling salesman has to undertake touring regularly to cover the sales territories assigned to
him.

10. Arranging for packing and delivery

A salesman, i.e., a counter salesman, has to arrange for the packing of the goods sold and the
delivery of the packages to the buyers.

11. Window and counter displays

A salesman, i.e., an indoor or counter salesman, has to arrange for the window and counter
displays of the products in an attractive manner so as to attract or induce the prospects to buy.

12. Promotion of goodwill

Every salesman has to build up satisfied clientele (i.e., customers) for his employer and thereby
promote the goodwill of his firm.

13. Recruiting and Training

Recruiting new salesmen, imparting training, by accompanying them while making sales calls.

14. Working with Middlemen

Salesmen establish direct relations with middlemen — distributors, wholesalers, etc., and collect
market information and pass it on to their firm.

What Are Sales Goals?

Sales goals are the sales objectives meant for the sales team of a company. To set realistic sales
goals, you have to keep the skills of each team member in mind. Try to pay attention to the
following while you set sales goals for your sales team,

1. Increasing sales to fetch more profits for the business

2. Increasing the productivity of sales reps

3. Indulging more in cross-selling and upselling

4. Retention of existing customers and acquiring new ones

5. Better management of time

Why Do You Need To Set Sales Goals?

It is obvious that when you have a goal in front of you, you will strive hard towards achieving it.
Goals are like road maps; they give a direction to businesses and are important for sales teams.
The main reasons for setting sales goals for salespeople are the following,

1. They help motivate sales teams

With sales goals, your sales team has a benchmark to achieve. It will help motivate reps to put in
their best efforts. You can amplify the feeling further by providing special incentives to those
who can surpass the goal. Click here to read the best sales motivational quotes for your team.

2. They give a clear idea of expectations

With clearly defined sales goals, there is clarity about what the sales team is supposed to do in a
specific period. The reps would then set out to plan how to achieve the goals.

3. They enhance the sales process

By setting sales goals, it is possible to streamline the sales process. In the endeavor to achieve
goals, the reps can identify roadblocks to achieve their goal and attempt to get rid of them. It
helps in enhancing the sales process and hitting sales targets.

Components of Effective Sales Goals

Modern sales goals have the following components in them,
1. Data-Driven
Setting goals just for the sake of it won’t fetch you desired results. Your goals have to be data-
backed. There is a need to check the past performance of reps, regions that are valuable for sales,
the company’s market share, and a lot more. It is possible to get this data easily when you use a
CRM.

2. Realistic
Setting unrealistic goals is the perfect recipe for disaster. If your company recorded a revenue of
$200,000 last year, it would be unrealistic to set a goal of $500,000 for the current year. Reps
would not even try working towards such goals because they know they can’t achieve them.
There is no use in setting such targets that reps cannot handle. Ideal goals are those that reps
consider achievable.

3. Challenging
When you set challenging goals for reps, they stay motivated. However, in the enthusiasm to set
goals that challenge reps, you must not forget that the goals have to be realistic. It is therefore
important to maintain a fine balance.

Steps to Set Smart Sales Goals

Now that you know what sales goals are and why you need them, let’s see how to set sales goals,

1. Begin setting sales goals from the bottom up

While setting goals, always start with how you want the result to be. It will help you make
decisions that will take you there. It is easy; just visualize where you want to be in a year and set
goals that help you reach where you want to be. Just keep in mind that your goals have to be in
sync with the mission of your company.

At this stage, you have to focus more on defining the outcome you want rather than specific
goals. You have to take note of the outcome you want and use it to show you the path for
evaluating the goals you develop ahead.

2. Understand the present situation

Once you finish foreseeing your future, you should come back to the present and look at your
current strategy, resources, and clients. Find out what all you need to reach where you visualize
yourself to be. To help yourself set smart sales goals effectively, you have to consider the
present and your future visualization. Learn more about sales forecasting methods.

3. Make sure your goals are SMART

To set sales goals, you can make use of the S.M.A.R.T methodology.

The acronym SMART stands for Specific, Measurable, Attainable, Relevant, and Time-Bound. It
means that all your business goals must have these five characteristics. Let’s take a look at each
of them to get a better idea,
a. Being specific
As a salesperson, you should know what you are aiming at. If you have a goal like increasing
revenue, it won’t be SMART as you are not specified here. A specific goal is something like –
increasing revenue by 60%. It is more specific and clearly defined as it is a quantifiable goal that
you can measure. It will help the sales team build a plan to achieve it.

b. Setting measurable goals

A SMART goal is one that you can measure. It should be possible for you to track the goal’s
progress. So, instead of a goal like ‘increase revenue’, you must have a quantifiable goal such as
‘increase revenue by 60% in a year’. When you have a goal that you can measure, it is possible
to measure your team’s progress.

c. Setting attainable goals

It is good to think big when you are running a business, but at the same time, the goals you set
have to be attainable by your reps. They have to such that a rep achieves them by following
normal work ethics. In other words, the goals have to be realistic. For example, if the reps can
get a 20% increase in sales, you should set a goal of 25% for the next month instead of asking
them to aim for 50%. While it is okay to make them aim high, being unrealistic with your goals
can put lots of pressure on them and make them feel disappointed when they cannot achieve the
goal.

d. Ensuring that goals are relevant

The goals that you set for your company have to be relevant to your business. If you set a goal
that has no direct connection with your business, it is not worth it. Your goals must always fit
into the definition of your business and help it grow. Small businesses often expand themselves,
but when you do so, you must make sure that they are relevant to the basis of your business.

e. Setting time-bound goals

Your goals must have a deadline, or else you will keep procrastinating. With time-bound goals,
you will work with more zeal for achieving sales goals in time. Without a deadline, your team
will not be motivated to work towards the goals. A goal like – ‘Increase revenue by 20% this
month’ is much better than only saying ‘Increase revenue by 20%’.

Keep the above as a checklist when you are developing goals.

4. Develop goals for the whole organization

Create wider goals for your whole company before you create them for each sales rep. Keep the
current scenario and the outcome you desire in mind while creating the wider goals. Doing so
will help you find out whether the goals for each sales rep will help meet the objectives of the
company or not.

5. Assign goals to reps

After you complete creating a goal for the whole team, you can assign goals individually to reps
to help your company achieve its broader objectives. These individual goals must also be based
on the SMART methodology as discussed above and have to consider the reps’ abilities. Keep
them realistic and attainable.

Here’s an example for better understanding – If your business goal is to increase profits by 20%
in a year, you can assign each rep an individual goal of increasing the profits by 5% each
quarter.

6. Give the required resources to the team

A sales team can accomplish its goals only when it has the resources it needs. In their absence,
the reps would not be able to achieve the goals you have set for them. Therefore, to see your
team win, you have to ensure that they have all they need to accomplish their individual goals.
Here resources refer to the training, coaching, and technology they need in the form
of automation tools.

7. Evaluate progress
This step is the most important one. Review the progress from time to time and make tweaks in
areas where the team members cannot hit the target and lag behind. Keep conducting sales
meetings from time to time to evaluate progress which will help in improving the performance of
reps.

Useful Goal Setting Tips

Here’s what you should try to focus on while setting goals,

1. Assess the performance of your sales team.

When you set goals, you first have to take a look at the capabilities of your current sales team
and the reps individually. Find what they are good at and the areas where they need to work on.
Take the opinion of the whole sales team if you want to see your business surge ahead.

2. Improve historical numbers

To grow the business, you have to perform better than you did last year. Sales goals should have
figures in them, or else they will be too vague. At the end of each year, you have to compare the
year’s statistics with that of the previous year so that you know whether there is a need for a
strategic change for the upcoming year. You can consider setting sales goals based on the last
year’s data.

3. Make goals manageable

You have to make sure that your goals are manageable and to do so, you should break a larger
goal into smaller chunks. As you have already seen, you can break down a goal of increasing
sales by 24 percent in a year and make it a goal of increasing sales by 2% each month, which
sounds more attainable.

4. Assign goals based on individual ability

You have to look at the skills and expertise of each rep while setting sales goals, and as it differs
from one rep to another, it is not possible to assign all of them the same kind of goals. You have
to consider even the previous sales records to see what they do best.
5. Give incentives
In sales, incentives work well. If you are setting sales goals and give incentives to reps when
they surpass their targets, they will get motivated and perform better.

Types of Sales Goals

Goals for sales are of different levels, and each level affects the ones below them. Let us begin
with the highest one,

1. Annual sales goals

Annual sales goals are for what you want to accomplish for the entire year. It can be something
like the revenue you want the company to earn in a year, the number of new customers you want
to acquire, etc. One of the best ways to set one is by taking a look at last year’s performance.
Suppose you earned a profit of 20% last year, you can consider increasing it by 10% for the
current year. However, other factors come into play. For example, a competitor would have
entered your arena, and it may not even be possible for you to reach the previous year’s goals.

2. Team sales goals

It is tough to see the progress of an annual goal which is why your sales team should focus on a
monthly or weekly goal. Team goals refer to monthly or quarterly goals for the whole sales team.
That means the annual goal gets divided by 12 for monthly team goals or by 4 for quarterly
goals. However, what is the need for a team goal when you are going to assign goals to reps
individually? It is because even when reps cannot reach their individual goal, they can contribute
to the larger team goal and stay motivated.

3. Individual sales goals

As the name suggests, individual sales goals are for each rep. While setting these goals, it is
important to note that the success rates of sales reps selling to different industries or markets will
be different, and it is important to consider that when you assign goals. A rep selling to large
enterprises can bring more revenue to the business than those who sell to small businesses.

One way of setting smart goals for sales is by looking at their previous data, customer profiles,
and your share in the market. Together they will help you assign challenging goals to reps.

4. Individual activity goals

There are a lot of factors in sales that are in the control of salespeople. The reps might go on
leave, clients may change their buying habits or turn to competitors, ruining individual sales
goals. To help reps gain control, you have an activity goal. To improve sales emails, you can
measure them in numbers, such as the number of emails sent or phone calls made. They can even
help guide reps and make them stay on track.

5. Stretch goals
Sales teams can exceed the goals, and that can be advantageous to your business. However, you
can blow their goal out of proportion as it won’t be realistic, and when they surpass the goal, it
would no longer be challenging. To help you out, there are stretch goals, and according to them,
the reps get extra rewards when they exceed their targets.
 8 sales forecasting methods for predicting revenue

1. Time series forecasting model

Time series forecasting models are used to project future sales based on past sales trends. These
models take into account the seasonality of a product or service to better predict future demand.
Essentially, a time series model is a mathematical equation that takes in data from previous periods,
such as monthly or quarterly sales, and uses it to estimate future outcomes.

A common example of a time series forecasting model is an autoregressive (AR) model. An AR

model is commonly used in finance analytics. It works by taking the previous values of the time
series and using them to predict future values. For example, you might use an AR to predict a stock’s
future price based on its past performance.

These models often fall out of favor in times of economic instability and uncertainty, like we
experienced during the COVID-19 pandemic. That’s because time series forecasting models
implicitly assume that the future will resemble the past. So, in the case of the AR, this type of model
wouldn’t necessarily be able to account for unstable market conditions.

2. Regression forecasting model

Regression forecasting models use historical data and linear regression techniques to predict
upcoming sales. This method looks at many different factors over time including: market conditions,
customer sentiment, economic trends, consumer behavior, competition, and more.

These models are useful for analyzing how changes in one factor can influence another factor’s
outcome. This analysis can help a company more accurately anticipate future sales and plan
accordingly.

Regression forecasting models can be used across a range of industries:

 These models are especially helpful in financial services, where they can be used to predict stock
prices, market trends, and customer demand patterns.

 For retail sales analysis, regression forecasting models can help with inventory management and
marketing campaigns by predicting customer behavior and product sales.

 These models can also be used in healthcare to anticipate patient demand for services, as well as
predict pharmaceutical and medical device sales.

3. Historical forecasting model

Historical forecasting uses historical data to make predictions about future sales. It is widely used in
retail businesses, as well as within other industries such as banking and insurance.

By analyzing past sales figures, companies can better anticipate deviations from previous
performance and adjust their strategies accordingly. These projections help businesses stay one step
ahead of the competition, anticipate changes in the market, and ensure they are meeting their
customer's expectations.

For example, a retail business may analyze past sales figures over a period of years to identify
seasonal trends or other patterns. These metrics could then be used to forecast future performance.
This exercise can help that business plan inventory and staffing based on expected customer demand,
taking into account anticipated shifts in consumer preferences or trends. By using historical sales
forecasting methods, businesses can anticipate and plan for forecasted changes.

4. Opportunity stage sales forecasting model

Opportunity stage sales forecasting models use current customer pipelines and open opportunities to
predict upcoming demand. These models look at factors like customer sentiment, product popularity,
current buying trends, and more to provide a better understanding of what customers may be
purchasing soon.
This type of forecasting model is particularly useful for businesses that sell products and services
with longer sales cycles, such as manufacturing or SaaS companies.

One example of opportunity stage forecasting is using sales pipeline metrics. This involves tracking
the movement of leads through each stage of the sales pipeline—from generating initial interest to
closing deals. Organizations can use this data to gain insights into customer behavior and identify
areas for optimization or improvement. The resulting forecasts can then be used to create better
strategies and make more accurate predictions, helping you become a more data-driven business.

5. Lead value sales forecasting model

Lead value sales forecasting models use data from customer leads to predict future demand. The data
can be pulled from a variety of factors such as contact information, past purchases, interests,
demographics, and more. Once analyzed with the lead value sales forecasting model, this data
provides an accurate estimate of which leads may be likely to convert into customers in the future.

This type of model is especially useful for predicting short-term revenue projections. By measuring a
variety of variables, business leaders can gain an understanding of the forces influencing their sales.
You can then leverage these factors to create more accurate forecasts.

With lead value sales forecasting, businesses can identify areas for improvement to:

 Increase profitability,

 Determine the optimal product pricing

 Plan for changes in market conditions.

6. Length of sales cycle forecasting model

In length of sales cycle forecasting models, data from previous customers’ purchasing behavior is
used to forecast the time it will take for potential customers to purchase a product or service. This
model looks at customer segmentation, customer lifetime value, product popularity, geographic
region, and other factors to estimate the average time it will take for customers to make a purchase.

Accurately forecasting the length of a sales cycle can be beneficial for both the buyer and seller. It
allows each party to better understand the expected timeline of the process and set realistic
expectations.

For example, if a buyer is expecting an immediate response from a seller, they may become
frustrated if the seller takes longer than expected to respond due to other commitments. On the other
hand, a seller may underestimate the time needed to close a deal if they are not aware of how long
their typical sales cycle is. By understanding the length of the sales cycles, both parties can be better
equipped for successful transactions.

7. Intuitive sales forecasting model

Intuitive sales forecasting is a method for predicting future performance using intuition, experience,
and judgment. Therefore, it is a more qualitative approach to forecasting.

This model is often used in businesses where forecasting based on historical data may not be as
reliable due to the nature of the industry or products. Intuitive sales forecasting can also be useful for
making decisions about marketing spend, strategies investments, and improving product
development kpis.

The most common approach to intuitive sales forecasting involves gathering insights and opinions
from key stakeholders in the business before making a decision. This allows leaders to make more
informed decisions by taking into account multiple perspectives. Self-service analytics tools like
ThoughtSpot helps concerned persons with proper insights so that they can take informed decisions.
8. Multivariable analysis sales forecasting model

As the name suggests, multivariable analysis sales forecasting models use multiple variables to
accurately predict upcoming demand. Some of the variables can include:

 Customer demographics

 Seasonality

 Economic indicators

 Marketing campaigns

 Product launches

 Competitor activity

By analyzing these factors together, businesses can more accurately identify correlations between
different elements. These correlations help leaders make better data-driven decisions about what
strategies will be most effective in driving sales.

For example, a business may find that a certain set of customer demographics have higher
conversion rates, or that seasonality is an important factor for certain products. By understanding
these correlations, the business can create targeted marketing campaigns or adjust product launches
to capitalize on these effects and drive sales.

What is a sales budget?

A sales budget is a financial plan that estimates a company’s total revenue in a specific time
period. It focuses on two things—the number of products sold and the price at which they are
sold—to predict how the company will perform.
What’s included in a sales budget?

When diving into sales forecasting or budget preparation, it’s important to ensure your
components are prepared and accurate before starting your plan. Depending on the size of your
business, you may have a larger or smaller sales budget spreadsheet than others, but all sales
budgets should include three key elements:

1. Income statement: contains the net income of the company and gives a general financial
overview of how the company is doing.
2. Balance sheet: lists a company’s liabilities, assets, and equity for a given budgeting
period.
3. Cash flow statement: reports cash received and cash spent for a certain budgeting
period.

A step-by-step guide to creating a sales budget

There are seven basic steps to preparing your sales budget.

1. CHOOSE A TIME PERIOD

First, you must decide on the budgeting period. This time period is usually monthly, quarterly, or
annual. Anything shorter or longer is generally either not useful or inaccurate. The period you
choose will depend on what your business sells and needs. If your products are consistent year-
round, then a monthly budget might be best. If your products change depending on the season,
then a quarterly budget might suit you better.

2. TAKE STOCK OF YOUR INVENTORY AND PRICES

In order to know what your sales might be in the future, you need to know what your prices are
and what products you have available—and if that will change. Will you be keeping prices the
same? Raising them? Lowering them? Will you be getting new products or discontinuing any?
These questions will help you predict your expected sales more accurately.

3. LOOK AT YOUR PAST SALES DATA

You’ll want to review data from the previous period that matches your current sales budget
period. This not only makes your predictions easier but also makes them more realistic. If you’re
putting together a sales budget for August and the two previous Augusts show less than a 2-
percent increase in sales, then it’s probably not a great idea to predict a 10-percent increase in
sales for the upcoming August.

4. COMPARE YOUR DATA TO THE CURRENT INDUSTRY

It’s important to align your goals with the current market and competition. By comparing
your sales data to that of other similar companies, you can gain perspective on where your sales
goals fit and where they might need adjusting. You can view the sales data of other businesses on
the U.S. Bureau of Labor Statistics website.

Comparing data can also be reassuring. You might be panicking because your sales fell in 2020,
but the reality may be that there was a drop in sales across your industry. Some years are simply
easier or harder on certain sectors or products.

5. TALK TO YOUR SALES REPS AND CUSTOMERS

Both your sales reps and customers can provide valuable feedback to inform your sales budget.
Your sales reps are close to your customers, so they can tell you more about buyer expectations,
disappointments, and wants. For example, sales reps for a soap company will know if there are
certain scents the company should invest in due to customer interest.

Of course, the people using your product will also have insights to share. Request customer
feedback to learn what your buyers are thinking, feeling, and experiencing. Communicating with
your customers also increases trust in your company and is a fantastic social selling tool.

6. FACTOR IN MARKET TRENDS AND CURRENT EVENTS

Sometimes, the market is beyond your control. As the pandemic continues to impact businesses,
2021 and 2022 sales budgets need to take additional factors into consideration. How much might
you need to charge for shipping if in-store purchases stay low? If your products are luxuries,
might you expect a decrease in sales? Keep in mind how current events can affect even your
most loyal customers.

7. CREATE YOUR BUDGET

Now it’s time to build your budget. We’ll dig into an example of a monthly and an annual sales
budget below, but if you’ve done steps one through six, you should be in good shape to create an
accurate, clear, objective-focused sales budget.
 What is Sales Territory?
A sales territory is a group of customers and prospects assigned to a salesperson. Here in this
article, we have shared what is sales territory, its meaning, definition, objectives, importance,
and types. ales territory comprises a group of customers or a geographical area, the territory may
or may not have a definite geographical boundary in some areas.

In other words, Sales territory represents a group of customer accounts, an industry, a market, or
a specific geographical area.

Objectives of Sales Territory

 Increase market and customer coverage

 Control sales expenses and time
 Enable better evaluation of sales force performance
 Improve customer relationships
 Increase sales force effectiveness
 Improve sales and profit performance
 To establish a salesperson’s responsibility
 To evaluate performance.
 To allow better matching of a salesperson to the customer
 To benefit salespeople and the company

Steps in Designing Sales Territory

 Selecting basic Control Unit

 Determine sales potential in each Control Unit
 Determine basic Territories
 Evaluate, revise if needed
 Customer contact plan
  Assign to territories

Approaches to Allocating Territories

Basic territories are decided by various approaches, which two most used are as follows;

1. Build-up method (Work-load)

2. Break down method (Market)
A control unit is a geographical area base unnecessary & expensive for consumer products.

◉ 1. Build-up Method (Work-load Approach)

 Decide customer call frequencies

 Calculate total customer calls in each control unit
 Estimate the workload capacity of a salesperson to make tentative territories
 Develop final territories
The objective is to equalize the workload of salespeople.

◉ 2. Breakdown Method (Market Approach)

 Estimate company sales potential for the total market

 The forecast sales potential for each control unit
 Estimate sales volume expected from each salesperson
 Make tentative territories
 Develop final territories

Assigning Sales Territories to Salesperson

Sales Managers assign sales territories by considering two main criteria.

 Relative Ability of Salespeople based on key evaluation factors.

 Salesperson’s effectiveness in a territory.
1. Relative ability of Salespeople based on key evaluation factors:


 o Product knowledge
o Market knowledge
o Past sales performance
o Communication Selling skills
2. Salesperson’s effectiveness in a territory

 Decided by comparing the social, cultural, and physical characteristics of the

salesperson with those of the territory
 The objective is to match the salesperson to the territory

Types of Sales Territory

1. On the basis of Geographical area

2. On the basis of Customer types
3. On the basis of Product types

► Routing in Sales Territory

Routing or Sales territory route is a travel plan used by a salesperson for making customer calls
in a territory.

Reasons for routing;

 Reduction in travel time and cost

 Improvement in territory coverage

◉ How to Setup a Routing plan in Sales Territory?

The steps in the procedure of setting up a routing plan are as follows;

1. Identification of current and prospective customers on a territory map.

2. Classifying each customer into high, medium, or low sales potential.
3. Decide call frequency for each category of customers.
4. Build route plan around locations of high potential customers.
 5. Computerize mathematical models and develop final route patterns.
Commonly used routing patterns are given below;

► Route Pattern of Sales Territory

The route of the territory affects the sales expenses and the ease of sales coverage. It also helps a
salesperson to spend less time on travel and keeps the salesperson working hard. The three
popular territory shapes used in the Indian market are listed below;

1. Straight Line Pattern

2. Clover Leaf Pattern
3. Major City Pattern

Examples of Sales Territories

1. In the case of FMCG products, the number of sales territory is large, as these products
are consumed more.
2. In the case of premium segment cars like Audi, and BMW, a complete state can be a
single sales territory.

◉ Activities involve in Sales Territory Management

 To maintain trade relations or dealer relations in the case of consumer durables and
automobiles.
 To identify the potential business so that proper sales planning can be done.
 Coverage of the market so that all the potential customers are touched say in the case
of Pharma the total no. of doctors in a given area and the number of visits made by
Medical representatives.
 Deciding how and what type of report needs to be prepared so that sales control.
 A decision regarding the size of the territory.

► Advantages of Sales Territory

 Increase Market share and better customer coverage

 Better Evaluation of sales force
  Efficient distribution of workload among salespeople.
 A convenient way to evaluate the performance of salespeople.
 A territorial design brings more clarity and focuses on the sales targets to be achieved.
 The sales force can build higher sales through up-selling and cross-selling to the same
set of customers.
 Customer service improves over a period of time.
 Helps understand customers’ current and latent needs.
 Helps salespeople to generate a better valve from the customers.
 An effective territorial design helps to integrate the selling efforts with other
marketing and promotional functions in the territory.
 Control selling expenses

► Disadvantages of Sales Territory

 May not prove good in regions where a personal relationship is required rather than a
professional approach.
 Organizations with vast geographic areas and large customer distribution with a lower
density in any specific block, firms using telemarketing and internet marketing as
tools, do not plan territories on the basis of geographic division.
 Small firms, particularly firms with single salespeople do not establish sales territory.
 Highly sophisticated and technically complex products are sold through sales teams’
systematic effort.
 Organizations sell products like insurance, fixed deposits, and other investment
products through personal acquaintances of salespeople.
 Salespersons get demotivated due to restrictions on the territory.
 Management of the company may not be aware.

What is a sales quota?

A sales quota is an achievement benchmark set for sales individuals and teams. This goal is usually

time-specific and must be achieved by the end of the month, quarter, or year.
Sales managers set quotas based on historical data and sales forecasting to ensure that the profits

and revenue continue to grow for the business. Salespeople receive commissions and incentives for

completing their quota in the specified period.

Someone new to sales might confuse sales quotas with sales targets and goals. These terms may

sound similar, but they’re not. Here’s what sets them apart

Signs that you need to revise

your team’s sales quota
1. No one in the team achieved the sales quota: Your sales reps are the same as
the last quarter or year, and with consistent sales processes in place, a steep drop in
performance for all the sales reps is just impossible. The culprit? Unattainable
quotas.
2. Overperformance and higher commissions sanctioned: On average, sales
quota attainment is around 58%. But based on your year-on-year performance, your
quotas might be overly simplified if there’s a noticeable spike in your quota
attainment. And as all the quotas are achieved, the commissions sanctioned to
salespeople will be higher too, which may not be profitable for your business.

3. The high performers are not exceeding their quotas: A sales forecast based
on historical data keeps all the contributors in mind. The low-, average- and high-
performers have a certain quota to meet, and their potential to exceed it is also
accounted for in the forecast. But there’s something wrong if the quota is met and
the sales reps aren’t putting in the effort to overachieve it.

4. Lack of motivation and high team attrition: Sales quotas aren’t meant to
scare off your team! If your team looks demotivated or exhausted, you can blame
 the quotas for putting additional pressure on your team. They might lack the
resources or the time to be able to meet such quotas.
These signs can also be a mix of a few other factors—salesperson
performance, market conditions, lack of resources, and training—but they’re
all linked to sales quotas, which are under your control. As a sales leader, you
can’t wait till something is broken before you fix it. You need to act as soon as
you see these signs.

The first step is choosing a sales quota that works for your business model
and sales team.

Types of sales quota

The sales quota depends on the type of industry, your business plan, and
your projected growth. Here are our top 5 recommendations for sales quota
models that you can choose from.

 Home

 Learn

 Sales

 What is a Sales Quota? Types, Examples, and Tips to achieve it

What starts your car? The spark plug in the engine.

Similarly, for your business, sales quotas are your sales engine’s spark plug.
What is a sales quota?
A sales quota is an achievement benchmark set for sales individuals and teams. This
goal is usually time-specific and must be achieved by the end of the month, quarter, or
year.

Sales managers set quotas based on historical data and sales forecasting to ensure that
the profits and revenue continue to grow for the business. Salespeople
receive commissions and incentives for completing their quota in the specified
period.
Someone new to sales might confuse sales quotas with sales targets and goals. These
terms may sound similar, but they’re not. Here’s what sets them apart:

Sales Goals Sales Targets Sales Quotas

Sales targets are

Sales quotas are well-
usually assigned to
The overall growth defined revenue quotas or
teams, where the
of the company volume quotas that an
Aim team is responsible
determines sales individual needs to
for achieving a
goals. complete in a specific
part of the sales
period.
goal.

Planned by
Higher management Sales VPs or Sales Sales managers assign a
(CEOs, founders, Leaders determine sales quota to their sales
Sales VPs) based on the sales target for reps based on past
growth trajectory sales managers performance and
and sales forecasting based on territory potential. The sales quota
 is not the same for each
methods. or product lines.
rep.

Sales managers
ensure that the
The sales goal is
entire team meets
transformed into The salesperson must
the sales target by
numbers and broken ensure that his quota is
breaking it down
Execution down into targets. met within the quarter,
into dynamic sales
These targets are otherwise, they lose out
quotas and
split across all the on their commissions.
providing
sales teams.
additional
incentives.

To put it simply, a sales quota is a salesperson’s worst enemy and best friend at the
same time. Because it makes their jobs hectic but exciting too.

Managers also find it hard to balance their aspirations and realistic expectations from
their teams.

In some cases, even after a lot of meticulous planning, the quota that you’ve set may
not deliver. There are a few signs that you can identify early on, which indicate that
it’s time for you to reevaluate your team’s quota.
Signs that you need to revise
your team’s sales quota
1. No one in the team achieved the sales quota: Your sales reps are the same as
the last quarter or year, and with consistent sales processes in place, a steep drop in
performance for all the sales reps is just impossible. The culprit? Unattainable
quotas.
2. Overperformance and higher commissions sanctioned: On average, sales
quota attainment is around 58%. But based on your year-on-year performance, your
quotas might be overly simplified if there’s a noticeable spike in your quota
attainment. And as all the quotas are achieved, the commissions sanctioned to
salespeople will be higher too, which may not be profitable for your business.

3. The high performers are not exceeding their quotas: A sales forecast based
on historical data keeps all the contributors in mind. The low-, average- and high-
performers have a certain quota to meet, and their potential to exceed it is also
accounted for in the forecast. But there’s something wrong if the quota is met and
the sales reps aren’t putting in the effort to overachieve it.

4. Lack of motivation and high team attrition: Sales quotas aren’t meant to
scare off your team! If your team looks demotivated or exhausted, you can blame
the quotas for putting additional pressure on your team. They might lack the
resources or the time to be able to meet such quotas.
These signs can also be a mix of a few other factors—salesperson performance,
market conditions, lack of resources, and training—but they’re all linked to sales
quotas, which are under your control. As a sales leader, you can’t wait till something
is broken before you fix it. You need to act as soon as you see these signs.
The first step is choosing a sales quota that works for your business model and sales
team.

Types of sales quota

The sales quota depends on the type of industry, your business plan, and your
projected growth. Here are our top 5 recommendations for sales quota models that you
can choose from.

1. Volume Sales Quota

The quota is decided by the number of units a salesperson can sell within the specified
period. The sales reps receive their commission when they hit the number of deals
they are expected to meet. The volume sales quota can also be broken down for
individual sales reps based on territories and different products.
SaaS companies, in particular, don’t benefit from volume quota because the deal value
must include every monthly installment; and they need to factor in variables
like customer lifetime value and longer sales cycles.

 Home

 Learn

 Sales

 What is a Sales Quota? Types, Examples, and Tips to achieve it

What starts your car? The spark plug in the engine.

Similarly, for your business, sales quotas are your sales engine’s spark plug.
What is a sales quota?
A sales quota is an achievement benchmark set for sales individuals and teams. This goal is usually time-

specific and must be achieved by the end of the month, quarter, or year.

Sales managers set quotas based on historical data and sales forecasting to ensure that the profits and revenue

continue to grow for the business. Salespeople receive commissions and incentives for completing their quota

in the specified period.

Someone new to sales might confuse sales quotas with sales targets and goals. These terms may sound similar,

but they’re not. Here’s what sets them apart:

Sales Goals Sales Targets Sales Quotas

Sales targets are

Sales quotas are well-
usually assigned to
The overall growth defined revenue quotas or
teams, where the
of the company volume quotas that an
Aim team is
determines sales individual needs to
responsible for
goals. complete in a specific
achieving a part of
period.
the sales goal.

Sales managers assign a

Higher management Sales VPs or Sales
sales quota to their sales
(CEOs, founders, Leaders determine
reps based on past
Sales VPs) based on the sales target for
Planned by performance and
growth trajectory sales managers
potential. The sales quota
and sales forecasting based on territory
is not the same for each
methods. or product lines.
rep.
 Sales managers

ensure that the

The sales goal is
entire team meets
transformed into The salesperson must
the sales target by
numbers and broken ensure that his quota is
breaking it down
Execution down into targets. met within the quarter,
into dynamic sales
These targets are otherwise, they lose out
quotas and
split across all the on their commissions.
providing
sales teams.
additional

incentives.

To put it simply, a sales quota is a salesperson’s worst enemy and best friend at the same time. Because it

makes their jobs hectic but exciting too.

Managers also find it hard to balance their aspirations and realistic expectations from their teams.

In some cases, even after a lot of meticulous planning, the quota that you’ve set may not deliver. There are a

few signs that you can identify early on, which indicate that it’s time for you to reevaluate your team’s quota.

Signs that you need to revise your team’s

sales quota
1. No one in the team achieved the sales quota: Your sales reps are the same as the last quarter or year,
and with consistent sales processes in place, a steep drop in performance for all the sales reps is just
impossible. The culprit? Unattainable quotas.
2. Overperformance and higher commissions sanctioned: On average, sales quota attainment is
around 58%. But based on your year-on-year performance, your quotas might be overly simplified if there’s
a noticeable spike in your quota attainment. And as all the quotas are achieved, the commissions sanctioned
to salespeople will be higher too, which may not be profitable for your business.
 3. The high performers are not exceeding their quotas: A sales forecast based on historical data keeps
all the contributors in mind. The low-, average- and high-performers have a certain quota to meet, and their
potential to exceed it is also accounted for in the forecast. But there’s something wrong if the quota is met
and the sales reps aren’t putting in the effort to overachieve it.

4. Lack of motivation and high team attrition: Sales quotas aren’t meant to scare off your team! If
your team looks demotivated or exhausted, you can blame the quotas for putting additional pressure on your
team. They might lack the resources or the time to be able to meet such quotas.

These signs can also be a mix of a few other factors—salesperson performance, market conditions, lack of

resources, and training—but they’re all linked to sales quotas, which are under your control. As a sales leader,

you can’t wait till something is broken before you fix it. You need to act as soon as you see these signs.

The first step is choosing a sales quota that works for your business model and sales team.

Types of sales quota

The sales quota depends on the type of industry, your business plan, and your projected growth.
Here are our top 5 recommendations for sales quota models that you can choose from.

1. Volume Sales Quota

The quota is decided by the number of units a salesperson can sell within the specified period.
The sales reps receive their commission when they hit the number of deals they are expected to
meet. The volume sales quota can also be broken down for individual sales reps based on
territories and different products.
SaaS companies, in particular, don’t benefit from volume quota because the deal value must
include every monthly installment; and they need to factor in variables like customer lifetime
value and longer sales cycles.
“Sales organizations that use incentives with sales volume quotas can motivate salespeople to
sell earlier in the business cycle for newer companies, thus improving efficiency.”
Chris Murphy, of Murphy Consulting Company

Example:
A car salesperson must sell at least ten cars this quarter. His commission per car sold is 10% and
$10,000 extra on meeting his quota. For an average car value of $40,000, the salesperson will
make $50,000 ((10 cars * 40,000 * 10%) + 10,000) in commission.

Suitable for:
 Fixed price products with limited room for negotiation
 Products with short sales cycles
 Businesses that want to improve market penetration
2. Revenue Quota
In the revenue quota model, the quota is met when the salesperson hits a particular quarterly
revenue benchmark. It doesn’t depend on the number of deals or length of sales cycles; instead
it’s similar to a book of business.
The revenue quota works all right for product-type businesses where the sales cycle is standard,
and the product price is fixed. However, it prevents salespersons from offering a better price or a
discount while closing. And this may lead to missed opportunities. This quota works really well
for service and subscription types of businesses (for example, Insurance, SAAS, and OTT
platforms) where the relationship with the client is long-term, and their monthly/yearly pay-out
contributes to the salesperson’s Monthly Recurring Revenue (MRR) or Annual Recurring
Revenue (ARR).
This model also motivates salespeople to utilize all the options to upsell and cross-sell services
and products, increasing the deal size. So, salespeople find a balance between discounts,
upselling, and the number of deals to meet this quota which increases profitability for your
business.
Example:

A salesperson who has generated an MRR of $20,000 cracks two deals with an MRR of $5,000
and $4,500, respectively. Which brings up his total to $29,500 ($20,000 + $5,000 + $4,500). If
the MRR quota for this salesperson was $25,000, these two deals have helped him exceed it, and
he will receive the commission for it.

Suitable for:
  Businesses with multiple product lines that allow salespeople to cross-sell products.
 Companies in the maturity phase, where the aim is to maintain market share and increase
profitability.
 Products/ services purchased recurrently
3. Activity Quota

The saying “It’s about the journey, not the destination” is very apt for sales because you can’t
close too many deals if you don’t abide by the sales process. Many stages come before closing a
deal—storing lead information, notes from a meeting, follow-ups, and sharing pricing—are all
important to close a deal successfully.

But in the other quota models, a salesperson’s efforts are only validated once the sale is
completed. The activity quota takes the other tasks into account to set quotas. It helps standardize
the sales process and decrease the length of the sales cycle.
This model also works great for training new sales employees and maintaining CRM hygiene. It
also helps track the progress of SDRs and BDRs as they support sales reps by taking calls and
leading initial demonstration sessions.
Before implementing this quota, you must have a sales management tool like a Sales CRM that
helps you track and review all the activities.
Example:
A salesperson sends 200 emails and makes 500 calls in a month. They also update the lead
details on the CRM, follow up on contacts, and reach out to 50 people on social media monthly
to meet their activity quota.
Suitable for:
 Companies that have a well-defined sales process
 Sales processes that focus on outbound sales
 Sales roles that are closely aligned to lead generation, like SDRs and BDRs
 Computer software, retail banking, and insurance industries
4. Profit Quota

The profit quota plan is like revenue quota in terms of setting the goals, but it’s a step up. The
profit quota tracks and reports the profit benchmark that each salesperson must meet.

To calculate the gross profit quota, the cost to sell and other expenses—like showroom rent,
telephone usage, advertising costs, discounts offered, etc.— and the cost of goods are subtracted
from the revenue. By doing so, you can improve budgeting and overall profitability. Gross
profits are a better way to represent the business’ growth trajectory.

The only drawback here is that it complicates quota management because the additional variable
expenses need to be tracked too. But it’s nothing that an effective CRM can’t handle.

Example:

For a deal worth $10,000, where the cost of goods is $4,000 and the overall selling expense is
$2,000, the gross profit will be $4,000 ($10,000 – ($4,000+$2,000)). A salesperson must make
five such deals to reach his monthly quota of $20,000.

Suitable for:
 Fast-growing and high-volume businesses
 Limiting over-the-top selling expenses
 Decreasing Cost of Customer Acquisition (CAC)
5. Combination Quota

Setting a single sales quota might be easy to set and track, but it is bound to get monotonous for
your teams. Combining 2-3 plans to create an intensive quota for your team keeps them on their
toes. You can also use gamification to make it more interesting.

Each quota has its setbacks but pairing the ones that complement each other balances them out.
For example, the profit model encourages higher value deals but can be met without contacting
too many customers. Whereas the activity quota ensures that CRM hygiene is maintained, and
salespeople log their talk time and the number of emails sent. Combining these two quotas
results in a higher volume of profitable deals while maintaining a healthy sales pipeline. You
help your salespeople develop and hone their sales skills by choosing a combination quota.
The combination can also be in ways to manage expansions in different territories or set targets
around various product lines. The best part about combination quotas is that the opportunities to
experiment are endless, as long as all the data is in place with a sales management tool.
Example:

A salesperson’s monthly quota requires them to make 200 calls, close five deals, and generate
$5000 in profits as a part of their combination quota.

Suitable for:
 Most businesses that intend to grow sustainably
 Well-defined sales process
 Companies that use a CRM to track different kinds of metrics

So far, we’ve understood when and why you need to improve your sales quotas; and you have
also chosen a suitable model. What’s next? Let’s figure out how you can implement it for your
team.