Sales Management (MARN16B)
Midterm Exam Reviewer
CHAPTER 3: Customer Relationship Management
and Building Partnerships
Definition of Customer Relationship Management
(CRM)
 According to the book “Marketing Management”
by Marshall & Johnston: Customer Relationship
Management (CRM) is a comprehensive business
model for increasing revenues and profits by
focusing on customers.
 According to the book “Customer Relationship
Management” by Chakravorti: Customer Relation-
ship Management (CRM) is a business model that
puts customers at the center of organizational
operations.
Goals and Objectives of CRM
1. Customer Acquisition: acquisition of the right
customers based on known or learned charac-
teristics that will drive growth & increased margins
2. Customer Retention: retention of satisfied and
loyal profitable customers and channels, and thus,
growing the business profitably over the long run
3. Customer Profitability: increased individual
customer margins, while offering the right
products at the right time
CRM Process Cycle
1. Knowledge Discovery: is the process of analyzing
the customer information acquired through various
customer touchpoints
2. Marketing Planning: represents a key use of the
output from the knowledge discovery phase, that
is, the information enables the capability to
develop marketing and customer strategies and
programs
3. Customer Interaction: represents the actual
implementation of customer strategies & programs
4. Analysis and Refinement: is the CRM process
where organizational learning occurs based on
customer response to the implemented strategies
and programs
Customer Satisfaction and Customer Loyalty
 Customer Satisfaction is the level of liking an
individual harbors for an offering - that is, to what
level is the offering meeting or exceeding the
customer’s expectation.
 Customer Loyalty is the degree to which an
individual will resist switching or defecting from
one offering to another.
 Customer Satisfaction and Customer Loyalty are
two extremely popular metrics used by marketing
managers to gauge the health of their business
and brands.
Example of Customer Relationship Management
 AMAZON has one of the complete CRM
infrastructures globally that harness customer
data during purchases to instantly customize
users ’online experience. You will need to set up
an account to purchase an item from Amazon.
This allows Amazon to track your browsing and
purchase history to develop email and marketing
campaigns that are more relevant to you.
Definition of Partnership
 A partnership is an arrangement between two or
more people to oversee business operations and
share its profits and liabilities.
Importance of Partnerships in Marketing
Perspective
 Partnership Marketing (also known as partner
marketing) is a strategic collaboration between
two parties, typically businesses or a business and
a public figure.
 The purpose of partner marketing is to reach
mutually beneficial marketing goals such as
growing an audience on a new platform, growing
brand awareness in a specific demographic,
attracting new customers, or strengthening
existing customer loyalty.
Example of Partnership
 SPOTIFY partnered w/ ride-hailing app UBER to
create “A SOUNDTRACK FOR YOUR RIDE.” This
is a great example of a co-branding partnership
between two very different products with very
similar goals— to earn more users.
The Importance of Customer Relationship
Management to Building Partnerships
1. Consumer Partnerships: CRM helps businesses
build a relationship with their customers that, in
turn, creates loyalty and customer retention. Since
customer loyalty and revenue are both qualities
that affect a company's revenue, CRM is a
management strategy that results in increased
profits for a business.
2. Business Partnerships: CRM generates valuable
insights into partner behavior and preferences
 through its analytical and reporting features. By
analyzing the data, companies can identify trends,
opportunities, and areas of improvement in their
partnership strategies.
CHAPTER 4: 7 Steps of Selling Process
 The selling process is the interaction between a
salesperson and their potential buyer.
7 Common Steps to the Selling Process
1. Prospecting
‒ Identify potential customers who might be
interested in your product or service. This could
involve market research, lead generation
campaigns, or referrals.
‒ These includes assessing their needs, budget,
and decision-making authority. Not all leads are
created equal, so focusing on qualified leads
improves efficiency.
Roles in Sales: Lead generation/development is
responsible for conducting research and
networking to make new business contacts.
2. Preparation/Pre-approach
‒ Research the potential customer's company,
industry, and specific needs.
‒ Prepare sales materials and presentations that
are clear, concise, and engaging.
Roles in Sales: Lead generation/development
3. Approach
‒ Make initial contact with the potential customer.
‒ This could be through a phone call, email, social
media message, or in-person meeting. The
approach should be professional and attention-
grabbing.
Roles in Sales: Outside Sales and Sales
Representatives
4. Presentation
‒ Deliver a compelling presentation that showcases
the value proposition of your product or service.
‒ Explain how your offering solves customer's
specific problems & how it compares to
competitors.
‒ Focus on the benefits the customer will
experience, not just the features of your product.
Roles in Sales: Outside Sales and Sales
Representatives
5. Handling Objections
‒ It's common for potential customers to raise
concerns or objections during the sales process.
‒ Be prepared to address these objections clearly
and confidently and turn objections into
opportunities to further explain the value of your
offering and demonstrate your expertise.
Roles in Sales: Account Managers, Client
Services, and Inside Sales
6. Closing the Sale
‒ Guide the customer towards a buying decision.
‒ Use closing techniques to secure their
commitment, such as offering a limited-time
incentive or asking for a clear next step.
Roles in Sales: Inside Sales, Outside Sales, and
Sales Support
7. Follow-up
‒ Don't neglect the customer after the sale.
‒ Follow up to ensure they are satisfied with their
purchase and address any questions or concerns
they may have.
‒ This also helps build a long-term relationship and
opens doors for future sales opportunities.
Roles in Sales: Account Managers, Client
Services, and Inside Sales
CHAPTER 5: Sales Forecasting and Budgeting
 Sales forecasting focuses on predicting future
sales of a product or service with the help of
historical data, market trends, and other relevant
factors.
 The primary goal of sales forecasting is to enable
better financial planning, budget allocation, and
strategic decision-making.
Sales Forecasting Concepts
1. Market Potential: is the highest possible expected
industry sales of a good or service in a specified
market segment for a given time period.
2. Sales Potential: refers to an individual firm’s
market share of the market potential, where
market share is defined as the percentage of
market controlled by a particular company or
product. It is the maximum sales a firm can hope
to obtain.
3. Actual Sales Forecast: is the sales estimate the
company actually expects to obtain, based on the
market conditions, company resources, and the
firms marketing plan. The sales forecast is less
than the sales potential since it is based on
realistic set of circumstances.
4. Sales Quotas: is a sales goal assigned to a sales
person, region or a team. They are usually derived
from the sales forecasts. Sales goals and
objectives sought by management.
Sales Forecasting Procedures
1. Preparing a forecast for general economic
conditions
2. Preparing a forecast of industry sales
3. Preparing a forecast of the product or company
sales
Qualitative Method
1. Jury of executive opinion
2. Delphi Technique
Quantitative Method
1. Continuity Extrapolation: It is a technique that
attempts to project the last increment of sales
change into the future.
2. Time Series Analysis: Projection of the average
increment of sales change into the future.
3. Exponential Smoothing: A weighted average time
series analysis. Actual sales of recent periods are
weighted more heavily than the average sales of
earlier periods.
4. Regression and Correlation Analysis: Aim of
regression analysis is to identify factors that
influence, or are closely associated with changes
in sales. A simple regression is a forecasting
technique using only one independent variable.
While multiple regressions use two or more
independent variables.
Budgeting
 Budgeting: Estimating future levels of revenue,
selling expenses, and profit contributions of the
sales function.
Types of Budget
1. Sales Budget: projection of revenue computed
from forecast unit sales and average prices.
2. Selling Expenses Budget: approved amount that
the department will spend to obtain the revenues
projected in the sales budget.
3. Profit Budget: merged sales budget and the selling
expense budget to determine gross profit.
Budgeting Procedures
1. Situational Analysis
2. Identification of problems and opportunities
3. Development of sales forecast
4. Formulation of sales objectives
5. Determination of sales tasks
6. Specification of resource requirement
7. Completion of projections
8. Presentation and review
9. Modifications and revisions
10. Budget Approval
CHAPTER 6: Sales Force Planning & Organizing
Planning in Sales Force
 Planning refers to the process of developing a
comprehensive strategy to guide the activities and
operations of the sales team. It involves setting
objectives, defining goals, outlining strategies,
allocating resources, and establishing a
framework for execution and evaluation.
Purpose of Sales Planning
1. Goal Achievement: Planning helps sales mana-
gers set clear & achievable goals for their teams.
These goals provide direction and motivation for
sales representatives to work towards.
2. Resource Allocation: Planning allows sales
managers to allocate resources effectively. By
analyzing past performance and market trends,
they can determine where resources such as time,
budget, and personnel should be allocated to
maximize sales effectiveness.
3. Strategy Development: Planning involves develo-
ping strategies to overcome challenges & capitalize
on opportunities. Sales managers can identify
market segments to target, develop sales tactics,
& create plans for product launches or promotions.
4. Risk Management: Planning helps sales
managers anticipate and mitigate risks. By
identifying potential obstacles and developing
contingency plans, they can minimize disruptions
to sales activities and maintain steady progress
towards their goals.
5. Performance Evaluation: Planning provides a
framework for evaluating performance. By
comparing actual results to planned targets, sales
managers can identify areas of strength and
weakness, make adjustments as needed, and
improve future planning processes.
Planning at Different Levels of Sales Management
1. Strategic Planning (Top-Level Management)
FOCUS: Defining the sales organization's
mission, vision, values, and overarching sales
goals. It includes assessing market trends,
identifying growth opportunities, and determining
the organization's competitive positioning.
SCOPE: Conducted by top-level executives, such
as Chief Sales Officers (CSOs) or Sales Directors.
 It involves the entire sales organization and its
long-term direction.
2. Tactical Planning (Middle-Level Management)
FOCUS: Translating the sales organization's
strategic objectives into actionable plans &
initiatives at the regional or departmental level. It
involves allocating sales resources, setting sales
targets, & developing strategies to achieve them.
SCOPE: Conducted by middle-level managers,
such as Sales Managers or Regional Sales
Directors. It focuses on specific sales teams,
territories, or product lines within the organization.
3. Operational Planning (Front-Line Management)
FOCUS: Executing the tactical plans developed by
middle-level management. It involves scheduling
sales activities, assigning sales quotas, coordi-
nating sales efforts, and monitoring sales
performance to ensure that daily sales operations
run smoothly.
SCOPE: Conducted by front-line sales managers
or team leaders. It focuses on the day-to-day sales
operations and activities within specific sales
teams or territories.
Stages in Sales Management Planning Process
1. Analysis of Current Situation: The planning
process begins with an analysis of the current
sales environment. This includes evaluating the
company's sales performance, market trends,
competitor analysis, customer demographics, and
any internal/external factors that may impact sales.
2. Setting Objectives and Goals: Based on the
analysis, sales managers set specific,
measurable, achievable, relevant, and time-bound
(SMART) objectives and goals. These goals
should align with the overall business objectives
and provide a clear direction for the sales team.
3. Developing Sales Strategies: Sales managers
develop strategies to achieve the set objectives
and goals. This involves determining target
markets, positioning products or services, setting
pricing strategies, identifying sales channels, and
developing tactics for sales prospecting, lead
generation, and closing deals.
4. Allocating Resources and Developing Budgets:
Once the strategies are developed, sales
managers allocate resources such as personnel,
budget, technology, and marketing support to
support the execution of the sales plan. This
involves determining staffing levels, training
needs, budget allocation, and other resource
requirements.
5. Implement the Plan: Implementation is the stage
where the sales plan is put into action. Sales
managers oversee the execution of the plan,
ensuring that strategies and tactics are
implemented effectively. This involves
coordinating with sales teams, and providing
support and guidance.
6. Monitoring and Control: Throughout the planning
process, sales managers monitor progress
against objectives and goals. This involves
tracking key performance indicators (KPIs) such
as sales volume, revenue, conversion rates, and
customer satisfaction. They also implement
controls and corrective actions as needed to
ensure that sales targets are met.
7. Evaluation and Adjustment: After the sales plan is
implemented, sales managers evaluate its
effectiveness and make adjustments as needed.
This involves analyzing sales performance,
identifying areas for improvement, and refining
strategies and tactics to enhance sales
effectiveness.
Organizing in Sales Force
 Organizing refers to the structuring and
arrangement of the sales team and its resources
to effectively achieve sales objectives and goals.
It involves designing the sales organization's
hierarchy, defining roles and responsibilities,
establishing reporting relationships, and
implementing processes and systems to
streamline sales operations.
Essential Elements of Sales Force Organizing
1. Sales Team Structure: Organizing begins with
determining the structure of the sales team. This
may involve organizing sales representatives into
geographical territories, industry verticals, product
lines, or customer segments based on factors
such as market coverage, customer needs, and
sales complexity.
2. Defining Roles & Responsibilities: Each member
of the sales team should have clearly defined roles
and responsibilities. This includes roles such as
sales representatives, account managers, sales
engineers, sales support staff, and sales
managers. Defining roles helps in minimizing
confusion, improving accountability, and ensuring
that each team member understands their
contribution to the sales process.
3. Hierarchy & Reporting Relationships: Organizing
involves establishing a hierarchical structure
within the sales team and defining reporting
relationships. This includes determining who
reports to whom, establishing lines of
communication, and creating channels for
 feedback and collaboration. Clear reporting
relationships help in facilitating decision-making,
communication, and coordination within the sales
organization.
4. Sales Process Design: Organizing also entails
designing the sales process – the series of steps
that sales representatives follow to identify,
qualify, pursue, and close sales opportunities.
This involves mapping out the customer journey,
defining sales stages, establishing criteria for
advancing opportunities, and designing workflows
and automation to streamline the process.
3. Product-Based Structure
‒ Sales teams are organized around specific
product lines or categories
‒ Each product line has its own sales team focused
on selling and promoting those products to
customers This structure is effective for
companies with a diverse product portfolio and
allows for specialized sales expertise and targeted
marketing efforts

Types of Organizations

1. Functional Structure
‒ Sales teams are organized based on specialized
functions such as sales, marketing, customer
service, and product development
‒ Each function operates independently, with its
own manager responsible for overseeing activities
within that function
‒ This structure is efficient for large organizations 4. Customer-Based Structure
with diverse product lines or customer segments ‒ Sales teams are organized around different
customer segments or types
‒ Each customer segment has its own sales team
dedicated to serving the unique needs and prefe-
rences of those customers
‒ This structure is beneficial for companies with
diverse customer bases and allows for
personalized sales approaches and tailored
solutions

2. Geographical Structure
‒ Sales teams are organized based on geographic
regions or territories
‒ Each region or territory has its own sales team
responsible for serving customers in that area
‒ This structure is suitable for companies operating
in multiple geographic markets and allows for
localized sales efforts and customer support