Summary

Chapter 11

Sales Department Relations

Learning Objectives

 This chapter will help you understand the types of sales department relations and their
importance for the effective growth of sales.

11.1 Introduction

Reputation of an organisation rests on the effective functioning of the sales department. Sales
Department leads the company’s efforts in the supply increasing quantities of products to the
customers. Success of an organisation depends on the relationships and associations established
by the sales department with the customers and the other public.

A sales department leads the company’s efforts in providing an ever-increasing quantity of

products/ services to the customers. This activity can be performed with profit only if the sales
department functions effectively in coordination with other departments which help it to make
things happen. The success of effective selling depends on the relationships and associations
established by the sales department with the customer and the public. The sales person generally
has close relationship with department heads and external publics and is responsible for
maintaining excellent relationships with all those external publics who help him in planning and
administering sales programs. The sales person should understand the functions of other
departments and develop a harmonious relationship to accomplish maximum progress in the
company’s goals and objectives.

11.2 Types of Coordinating Methods

Though the top management is overall responsible for coordinating the activities of the company
for maximum progress, the sales person must understand how other departments influence his
progress and how the other departments are influenced by the sales department. The sales person
generally coordinates with other department in two ways: viz

(a) The Formal Coordinating Method : Group related activities, plans, policies, meetings
help in achieving formal coordination. Such meetings are generally presided by the
Chief Marketing Officer or a senior executive of the company and the heads of
departments performing various marketing and sales functions attend such meetings.
Companies can have such meetings at the branch level in the form of staff meetings
 in which all the departmental heads of the branch participate in the meeting to cover
all aspects of product distribution including advertising and operations.
(b) The Informal Coordinating Method : Informal coordination methods are more
effective than the formal coordinating methods. It is not always possible to have
formal coordinating methods while following the flow of the process. The sales
person may solve the problem informally and seek its formal approval later,
depending upon the urgency of the issue. Unexpected problems which should be
resolved with minimum delay are generally solved by the informal coordinating
method. Sales persons require regular communication with their departmental heads
for closing a deal based on the profile of the customer.

11.3 Coordination of sales persons with Personnel department

Personnel department is into training, selection, recruitment and motivating of employees. Sales
persons and personnel department have to work together in formulating policies in establishing
policies for recruiting, training, compensating and motivating the sales force. Most sales persons
are not adequately equipped to service sales personnel’s personal problems like leaves, sickness,
entertainment, refreshments, conveyance, pensions, safety, health checks etc. Personnel policies
are decided through formal coordination while the routine matters are informed through informal
coordination.

11.4 Coordination of sales persons with finance department

The sales department helps the Finance department to arrive at a realistic sales budget by doing a
thorough market and customer research. Based on the sales budget a formal coordination of top
management happens on deciding the pricing and sales promotions. The Finance department
helps the Sales department in providing credit checks on prospective customers and thus
identifies new account acquisitions. The salesperson also helps in making collections and
securing credit information.Coordination of Sales department and Finance department happens
informally during mutual effort to overcome nature conflicts of interests in credit policy. The
sales persons generally want to offer liberal terms to the prospective and existing customers
while the Finance department generally do not think in the same way as sales persons. Close
coordination is necessary for the benefits of both Sales and Finance departments.

11.5 Sales and marketing information

The marketing information system assists the Sales department to gather data on customer’s
sales, trends, patterns for analyzing the sales problems and identifying solutions. The exception
reports such as sales persons failing to achieve quotas, sales activities exceeding budgeted
expenses, territories in which the competitive position is being lost, customers with declining
purchases and product lines having slow movement help the sales department to implement
quick curative actions.
11.6 Sales and Production

In the financial services industry the financial service cannot be produced and stocked. It is
produced instantly on the basis of a face to face or a non-face to face interaction with the
customer. In planning the marketing mix decision is very important from a formal coordination
point of view. The top management has to decide the infrastructure.The Sales department and
Production department should maintain adequate buffer stock to meet any eventuality of sudden
rush in orders.Theproduction department should provide a knowhow of the promotional plans,
detailed technical information of the products, limitations of production facilities, dispatch of
welcome kits and collaterals to enable the sales call to make a reasonable promise to the
prospective customers. The Sales department plays a major role in drafting the products and
service output policies in a formal coordination method with the Chief Marketing Officer.

11.7 Sales and Advertising

The Sales and Advertising department has an important role to play for designing the right
marketing information and choosing the right vehicle for taking this information to the target
market to stimulate a demand of its prospective customers. The activities of the sales persons are
planned and directed in a formal coordination method to increase the advertising impact. Proper
use of the company’s market research, research and development and marketing strategy is
essential for designing any advertisement that can help the sales person in securing the dealer’s
support and conserve the sales force time. Formal coordination is best achieved by a joint
meeting of Sales department and Advertising department who generally report to the Chief
Marketing Officer.

11.8 Sales department’s external relations

Public relations is good for customer service and so are better relations with industry,
government and regulators for better growth of the company.

Customers:
Customers will be pre-disposed to think well about the organization even before they begin
dealing with the organization. In a crowded market of today, a better customer relation will help
rise above the noise others are making in the market. The biggest advantage of better customer
relationship is the wide reach it enables through word of mouth publicity which even a
professional advertising may not do. A good relationship can first be converted into a sales lead
which can eventually convert into a profitable sale.

Industry relations:
The financial industry always does its own work for the development and growth of its
industries. The regulatory bodies like the RBI, IRDA, and SEBI publish important information
on the finer details of the industry including the impact of the economic factors on the industry.
Various associations like the Indian Banking Association also publish vital information for its
members. A good relation with these entities helps the financial intermediary to understand the
problems of the industry which are quite different from the problems of the public.

Government relations:
A formal coordination happens at the top level to design products and services that will meet the
customer needs as well as grow the bottom line. Informal coordination happens amongst the
sales person and various marketing departments to market and sell the best product in different
regions. Sales persons assist the company in implementing the government relations programs.

Press relations:

Good press relations help in obtaining a good image of the financial intermediary. Nowadays
even quarterly results are released as a press release, in addition to yearly performances. Press
publicity is planned by the top management in a formal coordination method.