INTRODUCTION TO SALES

MANAGEMENT IN THE TWENTY FIRST

CENTURY

Week 1
OBJECTIVES
• Provide an introduction to sales management

• Who does a sales manager manage?

• Where does sales management fit into the integrated marketing

communication process

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 SALES MANAGEMENT IN THE TWENTY-
FIRST CENTURY
• Innovation Fuels Success in Selling Today
• Sales Effectiveness Is Enhanced through Technology
• Leadership Is a Key Component in Sales Management Success
• Sales Management Is a Global Endeavor
• Ethics Underlies All Selling and Sales Management Activities
• “In the Twenty-First Century, Small Business is where the
business is.”
Sales in the Twenty-First Century must be smart and nimble and
provide technology-centered solution to support the sales effort

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 CHANGING CUSTOMER NEEDS DRIVE
CHANGES IN SALESPEOPLE
• From the customer's perspective, expectations and needs from sales forces are dramatically different
from a decade ago.
• From the 2007 Chally report in the customer's own words:

Need#1: Be personally accountable for our desired results. Clients want to work with a real partner
who takes as much ownership of the outcomes as they do.

Need#2: Understand our business. Deep knowledge of a customer's competencies, strategies,

challenges, opportunities, and culture is required.

Need#3: Be on our side. Customers expect a salesperson to advocate for them inside the vendor firm,
navigating through internal processes and bureaucracy to solve customer problems and meet customer
needs.
• Need#4: Design the right applications. Today's salesperson must think well beyond product features
to understand and affect customized product applications.

Need#5: Be easily accessible. Like most other aspects of global society today, salespeople are
expected to be connected and available whenever the customer reaches out.

Need#6: Solve our problems. Despite the overuse of the word "solutions" in reference to client
offerings (goods or services), the metaphor of salesperson as physician who diagnoses, prescribes,
and resolves client issues-not just sells them products-is a valid one.

Need#7: Be creative in responding to our needs. Innovation and creativity in working with clients
toward business improvements is central to the modern sales role.
.
SALES MANAGEMENT

The only business function that

generates revenue.

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Copyright © 2016 Pearson Education, Inc. 11-8
WHAT IS SALES MANAGEMENT?

Planning, Direction and control of personal selling including;

recruiting, selecting, training, equipping, assigning,
supervising, compensating and motivating as these tasks apply
to the personal sales force

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• Selling is an exchange transaction. Exchange of Product or
service for money
• Money is the revenue or the earnings of an enterprise often
called ‘turnover’ or ‘top line’
• Sales therefore is the only revenue generating function in an
enterprise.

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OBJECTIVES OF SALES MANAGEMENT

3 general underlying objectives:

1.SALES VOLUME
2.PROFITS
3.GROWTH
Sales – cost of sales = gross margin.
Gross margin – expenses =net profit.
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Copyright 11-11
SALESMAN
• …..they make more noise and more mistakes, create more
cheer, correct more errors, adjust more differences, spread more
gossip, hear more grievances, pacify more belligerence and
waste more time under pressure, all without loosing their
temper, than any other class of professionals –including
politicians.

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PURPOSE OF ORGANIZATION
• Eliminate waste of effort
• Minimize friction
• Maximize co-operation
• Permit development of specialists
• Ensure that all activities get done
• Achieve co-ordination/balance
• Define authority
• Fix responsibility

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TYPES OF ORGANIZATION

Line Organization Line & Staff Organization Functional Organization

Staff managers have advisory focus is on the principle of

line managers perform or support responsibility.
sales and sales e.g.Market research manager,
management activities. Training manager.They are not
directly responsible for
achieving sales targets.
specialization. Each specialist
has a functional responsibility
and are permitted to direct
and control the salesperson
thru their immediate superior..

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FUNCTIONS OF SALES

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 SALES MANAGEMENT PROCESS
The sales management process, or process of effective
management of a company's sales force, involves three
interrelated sets of decisions or processes.
Copyright © 2016 Pearson Education, Inc. 11-17
The Sales Force

 Sales Management- is the attainment of sales force goals in an effective and efficient manner
through planning, staffing, training, leading, and controlling organizational resources
(Futrell1998)

 Managing a sales force involves recruiting, hiring, training, supervising, compensating

salespeople, motivating them to become problem solvers, and providing the proper planning
and backup support so they can perform their jobs properly.
Sales Management

Personal Customer
Firm Sales
Sales
Managers
Representatives

Value
Sales Management
Personal Customer
Firm Sales
Sales
Managers
Representatives

Value
Sales Management
Personal
Sales
Sales
Managers
Representatives

 What are the sales managers goals?

 Sales
 Revenues
 Profits
 Market Share
 Controlling internal costs
Sales Management
Personal
Sales
Sales
Managers
Representatives

 How do they obtain their goals?

 Knowledge of the sales environment

 Planning for sales
 Recruiting the sales force
 Training the sales force
 Motivating the sales force
 Supervising the sales force
 Sales Management

Overview
Sales
Environment

Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

Training

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their jobs
properly.
 Sales Management
1) Past Present
2) Sales Environment
Overview 3) International
Sales
Environment 4) Organizing
5) Future
Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

Training

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their jobs
properly.
Sales Environment
 Past (L9)

 Industrial Revolution

 After WWI the need for mass distribution became evident

 1950s and the marketing concept

Sales Environment
 Present (L9)

 Relational Approach

 Current Jobs in Sales

 Opportunities in Sales Management

Sales Environment
 Organizing the Sales Force (L10)
 Organizing- the assignment of tasks, the grouping of task into departments, and the allocation of
resources to departments
(Source: Futrell)
 Structure of the sales managers job

 Chain of command

(Source: Hite and Johnston)

Sales Environment
 The Sales Environment (L11)
 Legal Issues
 Consumer protection laws
 Antitrust laws
 Unfair trade practices
 Fraud and misrepresentation
 Uniform Commercial Code
 Direct-to-consumer sales
 Antidiscrimination laws

 Ethical Issues
 Creating ethical corporate structures
 Relationships with customers
 Relationships with competitors
 Relationships with the firm
 Relationships with society

(Source: Hite and Johnston)

Sales Environment
 International (L12)

 Ethnic composition
 Religious orientation
 Social class environment
 Education
 Gender bias
 Differences in negotiating styles
 Differences in decision making
 Job status and company protocol
 Social aspects
 Perceptions of time
 Personal relationships
(Source: Hite and Johnston)
Sales Environment
 Future (L27)

 What does the sales organization of the future look like?

 Sales Management
1) Automation
2) Forecasting
Overview
Sales 3) Financial Planning
Environment 4) Quotas
5) Time and Territory
Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

Training

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their
jobs properly.
Planning
 Planning-is the conscious, systemic process of making decisions about goals and activities
that an individual, group, work unit, or organization will pursue in the future and the use of
resources needed to attain them

(Source: Futrell)
Planning
 Automating the Sales Force (L13)

 Hardware
 Type of computers, printers, copiers, phones, etc.

 Software
 What type software does the sales force need?
Planning
 Sales Forecasting (L14)
 How do we forecast sales?
 Sales force composite
 Jury of executive opinion
 Survey of buyer intentions
 Trend projections
 Moving averages
 Exponential smoothing
 Regression
 Econometric models
Planning
 Financial Planning for Sales (15)
 Budgeting
 Salespeople expenses
 Administrative expenses
 Other selling payroll
 Other selling expenses
 Communication expenses

 Profit objectives
 Break-even analysis
 Controlling the budget
 Selling the budget to top management
(Source: Hite and Johnston)
Planning
 Quotas (L16)
 Sales quota- the specific sales or profit objective a salesperson is expected to achieve
(Source: Perreault and McCarthy)
 Dollar sales
 Unit volume
 Margin
 Selling effort
 Product type
(Source: Kotler)
 Other types of quotas
 Expense quotas
 Profit quotas
 Activity quotas
(Source: Hite and Johnston)
Planning
 Time and Territory Management (L17)
 Optimum time must be spent with those prospects with the greatest potential

 Territory management involves:

 Identification and classification of prospects
 Analysis and development of the salespeople’s work loads
 How many salespeople will the territory support
 Territory’s boundaries
 Optimum way to travel from one prospect to the next
(Source: Hite and Johnston)
 Sales Management

Overview
Sales 1) Recruiting
Environment
2) Selecting

Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

Training

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their jobs
properly.
Recruiting
 Recruitment- set of activities and processes used to legally obtain a sufficient number of
individuals that takes the people’s and the sales force’s best interests into consideration

(Source: Futrell)
Recruiting
 Recruiting (L18)
 The sales manager should recruit individuals whose values and goals match those of the firm
(Source: Hoffman et al)
 Where do you find sales recruits
 Other departments Recommendations Institutions
 Professional associations Armed Forces Classifieds
 Employment agencies Unsolicited applicants

(Source: Hite and Johnston)

Recruiting
 Selecting (L19)
 What is the firm looking for?
 People that can sell successfully
 Remain with the company over a long period of time

 Problems
 Legal and ethical restrictions
 Firm must maintain a good image
 Must have a valid job description

(Source: Hite and Johnston)

 Sales Management

Overview
Sales
Environment

Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

2) Developing Training 1) New sales force

current sales training
force
Managing a sales force involves recruiting, hiring, training, supervising,
compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their jobs
properly.
Training
 Sales Training- effort put forth by an employer to provide the salesperson job related culture,
skill, knowledge, and attitudes that result in improved performance in the selling environment

(Source: Futrell)
Training
 Training (L20)
 What is needed for a training program to work?
 Provide a job description
 Provide product knowledge
 Provide company knowledge
 Provide market knowledge
 Selling techniques

 Why train
 Decreased turnover
 Increased sales
 Enhanced customer relationships
 Decreased costs
(Source: Hite and Johnston)
Training
 Developing (L21)

 Everything changes over time so constant training is needed

 When can advanced training techniques be used?

 Sales Management

Overview
Sales
Environment

Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

1) Motivating
2) Compensating Training
3) Indirect Incentives

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers,
and providing the proper planning and backup support so they can perform their
jobs properly.
Motivating
The most commonly used definitions of salesperson motivation include three dimensions: (1)
intensity, referring to the amount of mental and physical effort put forth by salespeople, (2)
persistence, describing the salesperson’s choice to expend effort over a period of time, and
(3) direction, implying that salespeople choose where their efforts will be spent among
various activities.

(Source: Ford, Walker, and Churchill)

Motivating
 Motivating (L22)
 Recognition

 Awards

 Special communications

(Source: Hite and Johnston)

Motivating
 Compensating (L23)
 Salary

 Commission

 Bonus

 Combinations

(Source: Hite and Johnston)

Motivating
 Indirect Incentives (L24)

 Expenses allowances

 Sales contests
 Themes
 Prizes
 Advantages
 Disadvantages

(Source: Hite and Johnston)

 Sales Management

1) Leadership Overview
Sales
2) Supervision Environment
3) Evaluating
Supervising
Planning
Personal
Sales Sales Reps
Managers
Motivating
Recruiting

Training

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their jobs
properly.
Supervising
 Leadership (L25)
 Leadership- the process of getting things done through others
 Leadership Styles
 Types of leadership
(Source: Hite and Johnston)

 Supervision (L25)
 Supervision- the actual oversee and directing of the day-to-day activities of salespeople
(Source: Futrell)
Supervising
 Evaluating (L26)

 Analysis of sales volume

 Marketing cost analysis
 Sales Management
1)Types of Sales People
2) Selling Environments
Overview
Sales
Environment
Personal
Sales Supervising Sales Reps
Planning
Managers

Motivating 3) Prospecting
Recruiting 4) Preapproach
5) Approach
6) Presentation
7) Objections
Training 8) Closing
9) Follow up

Managing a sales force involves recruiting, hiring, training, supervising,

compensating salespeople, motivating them to become problem solvers, and
providing the proper planning and backup support so they can perform their
jobs properly.
Definition
 Personal Selling (L4)
 Personal Selling- is direct oral communication designed to explain how an individual’s or
firm’s goods, services, or ideas fit the needs of one or more prospective customers

(Source: Hoffman et al)

The Sales Process
Prospecting/ Qualifying (L5)

Preapproach/ Planning (L6)

Needs
Identifying

Needs
Identifying
Approach (L7)

Presentation (L7)

Handling Objections (L8)

Closing the Sale (L8)

Follow up
Types of Communication
Marketing

Product Promotion Place Price

Personal Selling Public Relations Advertising Sales Promotion Direct Marketing

 Managing the Marketing Communication Process

Integrated marketing communications (L3)

 Integrated marketing communications- the intentional coordination of every

communication from a firm to a target customer to convey a consistent and complete message

(Source: Hoffman et al)

 Chapter 1 of Sales Force
Management: Leadership, Innovation, Technology 12
Edition
(Mark W. Johnston and Greg W. Marshall)
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