SALES  

MANAGEMENT:
Specific accountabilities

*Direct all sales activities for the achievement of short and long term business objectives, increased
profit, and market control.

*Establish and co-ordinate the sales objectives, policies and programme within the context of the
overall corporate plan and, where appropriate, recommend standards and set targets and quotas.

*Prepare or arrange for preparation of the budgets, reports and forecasts and ensure they are
presented in a timely manner to the Chief Executive.

*Appraise the activities of the sales staff according to overall sales strategies. Monitor and evaluate
the performance, and the efficiency of staff and procedures.

*Co-ordinate subordinate staff to optimise the use of human and material resources to achieve goals.
Consult with subordinate staff and review recommendations and reports.

*Direct the preparation of operational matters including volume and profit objectives, promotion
distribution, pricing and selling.

*Direct sales activities by setting product mix, geographical sales areas and customer service
standards.

*Control and monitor sales methods, key customer strategies and arrangements by recommending
prices, discount policies, credit arrangements, and conditions of sale.

*Monitor customer service, invoicing, expenditure, payments and administration costs.

*Direct the development of initiatives such as new products, incentive bonus schemes and the
dropping of unprofitable products.

*Maintain necessary contact and negotiations with major suppliers, key customers, industry
associations and government representatives to achieve the objectives of the division.

*May assist in the direction of merchandising methods and distribution policy.

*Select, or approve the selection and training of staff. Establish lines of control and delegate
responsibilities to subordinate staff.

*Ensure all the activities of sales comply with relevant Acts, legal demands and ethical standards.
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Definition:

 It is the attainment of an organization's sales goals in an effective & efficient manner through
planning, staffing, training, leading & controlling organizational resources.

 Revenue, sales, and sources of funds fuel organizations and the management of that process
is the most important function.

What are the goals of sales manager?

 Sales
 Revenues
 Profits
 Market Share
 Controlling Internal Costs

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

Legal Issues in Sales Management:

1. Consumer Protection Laws: Consumer protection laws are designed to ensure fair
competition and the free flow of truthful information in the marketplace.

2. Antitrust laws: Law intended to promote free competition in the market place by outlawing
monopolies.

3. Unfair Trade practices: These laws involve various types of business competition, especially
with reference to trademarks, price maintenance, and price discrimination; like offering Free
Air Tickets.
4 .Fraud and Misrepresentation
5. Uniform Commercial Code
6. Direct-to-Consumer Sales
7. Antidiscrimination Laws: It refers to the law on people's right to be treated equally.

Ethical Issues:

 Creating Ethical Corporate Structure

 Relationships with Customers
 Relationships with Competitors
 Relationships with the Firm
 Relationships with Society

International Considerations:

>>Ethnic Composition
>>Religious Orientation
>>Social Class Environment
>>Education
>>Gender Bias
 >>Differences in Negotiation styles
>>Differences in decision making
>>Job Status and Company Protocol
>>Perceptions of time
>>Personal Relationships

Sales Planning:

 It is to answer the question: “Where will all the sales come from?” The sales plan isn’t a
guesstimate.
 It takes its direction from the marketing strategy and is based on thorough research and a
considered positioning of the company within the market place.
 Sales planning involves predicting demand for the product and demand on the sales assets
machines, people, or a combination of both).
 Failure to plan always means lost sales.

 It should allow for meeting increasing customer demand for more products, services and/or
customization as the business is growing, but also react quickly when demand decreases.

 Sales planning improve efficiency and decreases unfocused and uncoordinated activity within
the sales process.

 Planning insures that when a consumer wishes to purchase the product, the product is
available, but it also means opportunities for additional sales are presented and the sales
assets are available to exploit these opportunities.

Duties of the sales manager:

 Holds a unique position in the sales organisation.

 Plans, organises, directs, staffs & coordinates whole sales organisation.

 He is the person who steers the wheels of sales organisation.

 His status and power depends on the size of the organisation in his charge.

 In small firms the general manager or managing director performs this duty.

 But in big manufacturing firms there usually a sales manager.

 In giant sized companies for some territories and/or products sales managers are appointed.

 Whatever the position of the sales manager, he is the guiding and driving force of the sales
organisation.
Fundamentals of successful selling:

>>Proper Knowledge of products

>>Knowledge of the goods of fundamentals
>>Follow business ethics
>>Avoidance of Unpleasant Mannerisms of social traits
>>Good Manners of social traits
>>Cooperation and Helpfulness of social traits

Scope:

The  scope  of  the  sales  management  varies  with  the

-nature  of  the  industry
-productlines
-geographical  spread
-nature of  selling

Example
-in  hotel industry, there  is  only one  sales  manager [ one man job]
-in  consumer  industry, there is  sales  manager  supported  by zone  managers /  sales
representatives.

The  scope  of  the  sales  management, in broad terms  includes, the  following:

Establish Salesforce objectives

Organizing the Salesforce
Recruiting and Selecting Salespeople
Training Sales Personnel
Compensating Sales People
Motivating Sales People
Developing  sales  plans
=====================================================

“Customer is the boss – yesterday, today and tomorrow”.

“Customer is profit – everyone else is overhead”.

Objectives of Sales Management: Quantitative objectives (short term)

 To retain and capture market share.
 To determine sales volume in ways that contributes to profitability.
 To obtain new accounts of given types.
 To keep personal expenses within specified limits.

Qualitative objective (long term)

 To do entire selling job.
 To search and maintain customer cooperation.
 To provide technical advice wherever necessary.
 To assist in training of middleman’s sales personnel.
 To collect and report market information of interest and use to the company management.

Advantages to the marketing manager:

 Understanding the economic structure of your industry.
 Identifying segments within your market .Identifying your target market.
  Identifying your best customers in place.
 Doing marketing research to develop profiles (demographic, psychographic, and behavioral)
of your core customers.
 Understanding your competitors and their products.
 Developing new products.
 Establishing environmental scanning mechanisms to detect opportunities and threats.
 Understanding your company's strengths and weaknesses.
 Auditing your customers' experience of your brand in full.
 Developing marketing strategies for each of your products using the marketing mix variables
of price, product, distribution, and promotion.
 Coordinating the sales function with other parts of the promotional mix (such as advertising,
sales promotion, public relations, and publicity).
 Creating a sustainable competitive advantage.

Effective Management:

It  is  the  management  process  of establishing , directing , and coordinating   the sales
development  activities   for  the  company products. 
Strategically plan for, develop and profitably penetrate the market to which the products, services and
capabilities of the company can be directed. 
Ensuring   the sales to   customers, distributors and resellers achieve the budgeted target.
Selection of salesmen:

Selection involves three basic aspects, namely, consideration of-

(1) the number of salesman required

(2) the qualities required in the salesman
(3) the selection procedure to be adopted

Methods of Remuneration:
There are various methods of remunerating salesmen. Following are the schemes

1. Straight salary method

2. Straight commission method

3. Salary and commission method

1. Straight salary method of remuneration

The amount of remuneration payable to a salesman remains the same regardless of his sales
volume.

There are usually three elements in such remunerations:

(i) salary

(ii) increments

(iii) allowances.

The basic salary goes on increasing with annual increments. The appointment letter specifics the
amount of increment and the maximum salary he is likely to draw. To the salary and increments,
the dearness allowance is added. This dearness allowance (D.A.) represents the payment made as
per the cost of living index. There are also allowances like travelling, house rent, etc. which are
added. Sometimes hard working salesmen are granted special increments.

Advantages:

1. This is the simplest of all methods o remuneration and therefore easy to calculate and simple to
understand

2. It ensures a stable income to salesmen. The Salesman's income does not fluctuate with the
sales volume

3. It provides a sense of security and measure of confidence to the sales people. This motivates
the sales force for effective selling

4. The sales manager can exercise better control over the sales force under tis plan of
remuneration

Drawbacks:
1. This method of remuneration does not provide incentive for a hardworking salesman. Such
persons feel disappointed and do not put additional effort for selling products.

2. Under this method the ass and the horse are put on the same footing. Therefore it results in
overpayment to idle and inefficient salesmen while it leads to under-payment to efficient and
hardworking salesmen.

3. Fixing the right amount of salary poses a problem under this method. The performance and
ability of persons vary fork one another and therefore management finds it difficult fixing the
salary.

2. Straight commission method of Remuneration

Under such method the remuneration is paid on the basis of the amount of sales made.

The salesman is paid commission calculated at a certain percentage of net sales or profit. The
percentage of commission varies from concern to concern and case to case. This is an effort-
oriented of method of remuneration. The income of a salesman fluctuates directly with the volume
of sales made.

Advantages:

1. This method encourages those salesmen who are efficient and hardworking. The worthy ones
are rewarded.

2. The sales manager need not remind the salesmen to improve sales performance. The salesmen
themselves work hard for their own interest.

3. Hardworking and efficient salesmen are attracted towards the firm because they can increase
their income by the sales they make.

4. As payment of commission is directly connected with sale, during slack seasons or slow-moving,
firms pay less. Hence, the commission possesses no burden for them.

5. Sincere and efficient salesmen are not required to depend upon the favour of the sales manager
to earn their income in this method. The salesmen can earn higher commission by their own merit.

Drawbacks:

1. This method is necessarily, based on the principle 'more sales more commission and no sales no
commission. Hence the salesmen are uncertain of their earnings. There are some factors like
depression, inferior quality of goods, high competition, physical illness which are beyond the
control of the sales force. In such cases their earnings suffer without their own fault.

2. Since more sales means more commission, the salesman may try to increase sales more, on
credit to unworthy customers. This leads to accumulation of move bad debts.

3. Salary and commission method of Remuneration

Under this method, the salesman is entitled to a fixed salary and commission is paid based on the
sales volume.
This combination plan tries to eradicate the disadvantages of both straight salary and straight
commission method. The salary element gives the salesman the salesman the necessary security
and comfort. The commission element is meant to reward hardworking and efficient salesmen who
put more effort in selling. Thus this salary plus commission method is found to be good for both
the employee and employer. This method of remuneration is one of the most popular method in
these days and are followed by many firms.

The advantage of this method lies in the fact that it takes the best advantages of two straight
methods namely straight salary and straight commission. It also distinguishes efficient from
inefficient salesmen. This method guarantees a minimum for the salesman and hence the
salesman feels secured. Even during periods of depression, salesmen are assured of a regular
income

Factors Affecting Remuneration Plan

Factors Affecting Remuneration Plan:

A sales job study includes all aspects relating to the duties and responsibilities of salesmen.

1. Nature of the product. The remuneration plan depends on the nature of the product. If the
product is a consumer product, it needs little sales effort on the part of the salesmen. Therefore
they are paid less compared to those who sell speciality or technical goods.

2. Class of salesmen. Some kind of salesmen like travelling salesmen, creative salesmen are
highly paid because their works is more painful and hazardous. On the other a hand counter
salesmen who perform routine type of activities are paid relatively less.

3. Financial capacity of the firm. Firms which have limited financial capacity, the remuneration
plan should be planned in such a manner that it does hot become a burden for the firm. They can
follow a remuneration plan entirely based on commission basis.

4. Economically justified. The remuneration plan should be so designed that there must be
adequate provision in periods of rising prices. The salesmen should be provided with dearness
allowances (D.A) and additional dearness allowances (A.D.A.) in addition to the monthly salary.

Need for Sound Remuneration Plan:

This in turn results in greater sales effort and higher sales. Thus this is a continuous circle, one
leading to another. A good plan of remuneration is a means of securing better control of
salesmen's activities, greater incentive sales, more loyalty, higher morale and greater enthusiasm
and interest. It should be planned in such a manner that the employer gets higher sales and the
employees higher income. A sound remuneration plan has the following importance.

1. It attracts best salesmen because improved performance needs a reward. Talented salesmen
are attracted when the firm is prepared to pay well for hard work.

2. It increases the volume of profit and sales of the firm.

3. Salesmen develop a sense of loyalty to the firm. Thus the loyal employees of the firm become a
permanent asset of the firm assuring their best service to the firm.

4. It satisfies the salesmen because their hardworking efforts are paid well. A satisfied customer
naturally puts heart and soul together to maximise work performance.
5. It establishes a healthy employer and employee relationship. Salesmen who are paid well and
well-treated, have no scope for grudges or grumbling.

Training of salesmen:

The old belief that still persists in certain quarters is that the ability to get along with people and
physical personality are all important, and that the selling ability is something intangible which a
person may or may not have. Fortunately, progressive sales executives realise that, provided basic
characteristics are present, salesmen are not born but made.

This has resulted in the application of scientific management techniques in developing salesmen,
the emphasis being placed on (1) adequate selection procedures, (2) appropriate training and (3)
sufficient supervision. Selection is important even from the training aspect as it would be a waste
of good money to train bad material. The training aspect is thus connected with recruiting and
selecting salesmen.

Steps involved in training clearer:

The following would make the basic steps involved in training clearer

(i) Prepare the Salesman: As the training will be effective only if the trainee wants to learn,
steps should be taken to create interest in the training programme. This could be done by
explaining to him how such training will benefit him, how he will improve his ability to sell, do his
work more easily and effectively and get greater financial and psychic rewards. He should also he
freed from the fear as to whether his performance will satisfy the trainer (particularly in respect of
field-training). The trainer should make it clear to him that he is interested only in making his work
easier and more productive.

(ii) Tell Him: The nature of the job and why it is to be done in a particular way should be
explained to him. The trainer should strict to the key points thus making it easier for the salesman
to remember and understand them. He should not tell him too much at one timer or too fast. He
must use simple language as the object of any language is to communicate ideas and hot to show
off. The trainee should also do the talking as he can learn more from a discussion.

(iii) Show Him: This is more easily done in the field training where the trainer can actually
demonstrate how the interview is started, how attention can be secured, the methods of meeting
objections and so on. A trainer in the field must himself set a high standard and a good example to
follow. Whilst showing how, the reasons for the method or procedure should be given as a person
who understands “why” is more inclined to do a thing than one who is not convinced of the
reasons behind a certain procedure.

(iv) Practice (i.e. Let Him Do): Now is the time to let the salesman apply his knowledge to a
part of the work. He must of course be ready. Otherwise failure would result in lowering his self-
confidence. Therefore, the trainee should be started on simple and easy things and not on the
more difficult jobs The trainer must first let the salesman do the work and not interrupt even when
mistake are made. The salesman himself must pull out of the mistake. Of course if he is getting
into serious trouble the trainer should help him and rescue him but the trainer should remember
that he cannot teach a person to ride by doing his riding for him all the time. Compliments and
encouragements are also necessary. Practice is the best method for learning a skill.
(v) Check Him: The trainer should check whether the trainee has understood what is expected in
his performance, his speed, and the mistakes that he makes. Correcting the trainee should be
done tactfully, showing him how he could do better instead of giving him the impression that he
has done badly. Compliment on some good aspect before he is corrected. The sandwich
Technique, i.e., presenting criticism in between compliments, should be used. The salesman can
be permitted to correct himself, by first complimenting him and then asking him whether he can
thick of anything whereby he could have done better. If correcting is overdone it will destroy think
of anything whereby he could have done better. If correcting is overdone it will destroy self-
confidence and be annoying rather than helpful.

The training plan:

In order to have an effective training plan or programme it is necessary to know:

1. The training objectives: Thus the first step is to identify the objectives or training. Are we
talking about breaking in the new recruit or of giving refresher training to the existing sales force ?
Is the objective only to pass on technical knowledge or also to each the new recruit the
fundamentals of salesmanship ? Such a crystalisation of training objectives would result in
identifying what should be taught.

2. What should be taught ? Is the objective only to pass on technical knowledge or also to each
the new recruit the fundamentals of salesmanship ? Such a crystalisation of training objectives
would result in identifying what should be taught.

Greater emphasis must naturally be laid on the more important duties. The difficulty analysis
would show the best methods for overcoming specific selling problems. The stress in training
should be on skill, knowledge, work-habit and attitude. Attitude is a very important factor in selling
success and in order to secure proper attitude it is necessary to include in the training programme
information which would instil in the salesman an understanding of:

1. the distribution system in general and how it affects the company in particular
2. how the industry of product plans fit into the general economy
3. how this particular company fits into the industry
4. the company policies and objectives
5. the history and reputation of the company
6. the reasons for and the type of disciplinary action introduced in the company.

3. Where training should be given? Training may be divided into (1) Group training and (2)
Individual training. The former can be given in Centralised Schools (at the home office or factory)
and (3) Decentralised Schools (at branches or districts).

Training may be in the form of job training, job rotation, by correspondence or by attending
regular Schools of Commerce. Group training is most suitable for the development of attitudes. Of
course this is a very difficult question as the problem of attitude has to be considered not only
from the training angle but also involves proper selection, supervision, organization and so on.
Group meetings are also good, for the knowledge training or giving necessary information about
the products to the trainee. Of course the technical aspect must be very closely interlinked with
the possible benefits to the customers. Attitude training and work-habit training are best given in
the field.

4. When training should be given? As already indicated, training should commence as soon as
the salesman joins and must be continuous and can only cease when the salesman leaves the
organisation.
An interesting technique sometimes used is to train the salesman before selection. For example, as
a part of the selection procedure the applicant may be required to work in the field for a few days
with a senior experienced salesman. In this way the prospective salesman is given a clearer
picture or what is expected of him and the chances of error in selection are minimised. It also
gives the applicant an opportunity to become acquainted with the real job.

5. Who should give the training? With regard to the question as to who should do the actual
training, the one feeling seems to be that the responsibility must rest in the line (i.e., with persons
like the sales supervisor or immediate boss) since the line in fact responsible for the results
secured by the salesman in the field.

It is felt that it is difficult to separate the two. Besides the line would have an intimate knowledge
of the selling problems. Again salesmen generally respond more favourably to a line man than to a
staff man. The other point of view is in favour of training being a staff function. The advocates of
this view express the feeling that although the responsibility for training is in the line, common-
sense requires assistance from the training staff. Trainers skilled in training techniques are in a
better position to do the job than a supervisor or branch manager who rarely has such skill.
Besides, a good staff trainer would have the opportunity of studying the job analysis, difficulty
analysis and so on and would devote his heart and soul to the inclination to train salesman. The
best solution seems to be for the specialised staff to do the training under line direction.

6. How training should be given? Charles R. Allen in his book, The Instructor, the Man and the
Job, pointed out, as early as 1919 the dangers of training by absorption (that is allowing the
trainee to learn through actual experience on the job) and emphasized the advantages or training
by intention (that is through an awareness and acknowledgment of responsibility for training
resulting in the introduction of a training programme).

He developed a formula for training involving formula for training involving four step:

(1) Preparation
(2) Representation
(3) Application
(4) Inspection.

This was adopted in essentially the same from by Training within Industry Service in America,
which was responsible for training 10 million workers in World War II. Although the object of
Allen's book and the T.W.I. programme was concerned with training people in trade skills quickly,
sales trainers find this approach very effective. The sales training formula has thus become:
prepare tell, show, practice and check.

7. The group training methods.

The three basic methods of group training are

(1) telling
(2) showing
(3) conferring

In the Telling Method, material is presented in the from of lectures with chart representation as
may be appropriate. This is the traditional method of teaching and is good for giving facts and
information.

The Showing Method uses actual showing i.e. how is done, for example, demonstration by an
experienced salesmen or sales trainer.

The latest development in training methods in the Conferring Method where under the leadership
of a capable conference leader the salesmen are made to participate. All those present acquire
new information on the basis of the actual experiences of others. Problems are analysed and each
one, more or less, contributes something.
Centralized vs Decentralized Training

The advantages of the Centralised Training School (i.e. Training at the home-office or factory) are:

1. Instruction is uniform.
2. The instructor's quality is generally higher.
3. The home-office staff can be used to train in the subjects in which they specialise.
4. A smaller number of instructors are needed than in the case of the. decentralised system.
5. The visual aids apparatus, which can be used in training, would be superior and less costly as
only one set has to be prepared and it is not required to be carried from one place to another.
6. The trainees would get a better appreciations of the operations at the home-office.
7. The imaginary or real barrier between those in the field and the home-office is removed and
this results in a greater sense of co-operation and working as a team.

As against this, the following are disadvantages

1. The academic atmosphere which might be created may render the training less effective than
local training.
2. The cost factor has to be considered as transportation and housing may have to be provided
and the loss of business caused by the salesman having to go over to the home-office for a certain
length of time must be borne in mind.
3. There is a tendency for the salesman to consider this type of trip as their vacation.
4. It may interefere with the normal home-office routine as it might require the executives to
come in as trainers and help.

The home-office school is most effective in attitude training as it gives the salesman immediately a
complete and intimate knowledge of the company itself. A recent development for combining the
advantages of centralised and decentralised methods is the introduction of television. Television
can also be used to bring the office operations right into the home-office classroom. However, as
far as India is concerned we have to wait some time more before this might become possible.
Remuneration

6 Sure Ways to Increase Sales:

1. Set up a sales incentive program.

Give your sales staff a reason to get out there and sell, sell, sell. Why do so many businesses that
rely on their sales staff to drive sales have incentive programs in place? Because offering their sales
staff the trips and/or TVs for x amount of sales works.

2. Encourage your sales staff to upsell.

Essentially, upselling involves adding related products and/or services to your line and making it
convenient and necessary for customer to buy them. Just placing more products near your usual
products isn’t going to increase your sales much. To upsell successfully, the customer has to be
persuaded of the benefit. For instance, when I last had my carpets cleaned, the cleaner noticed a pet
stain. Instead of just cleaning it up, he drew my attention to it, and showed me how easily and
effectively the spot cleaning solution removed all trace of the stain. Did I buy the spot cleaning
solution? You bet. He persuaded me that buying it was beneficial to me and made it convenient to
purchase it. Result: increased sales for the carpet cleaning company.

3. Give your customers the inside scoop.

Recently I was shopping at a retail housewares store. I had picked out an item and was mulling over
whether to buy it or not when a salesperson came up to me and said, “I see you’re interested in that
blender. We’re having a sale next week and all our blenders will be 20 percent off. You might want to
come back then.” Guess what? I did – and bought two other items as well. Lesson: if you have a
promotion or sale coming up, tell your customers about it. They’ll come back – and probably bring
some friends with them too. (And don't forget - you can give your customers the inside scoop by
emailing or calling them, too.)

4. Tier your customers.

There should be a clear and obvious difference between regular customers and other customers – a
difference that your regular customers perceive as showing that you value them. How can you expect
customer loyalty if all customers are treated as “someone off the street”? There are all kinds of ways
that you can show your regular customers that you value them, from small things such as greeting
them by name through larger benefits such as giving regulars extended credit or discounts.

5. Set up a customer rewards program.

We’re all familiar with the customer rewards programs that so many large businesses have in place.
But there’s no reason that a small business can’t have a customer rewards program, too. It can be as
simple as a discount on a customer’s birthday or as complex as a points system that earns various
rewards such as discounts on merchandise. Done right, rewards programs can really help build
customer loyalty and increase sales.

6. Distribute free samples to customers.

Why do so many businesses include free samples of other products when you buy something from
them? Because it can increase sales in so many ways. As the customer who bought the original
product, I might try and like the sample of the new product and buy some of it, too. Or I might pass on
the sample to someone else, who might try the product, like it, and buy that and other products from
the company. At the very least, the original customer will be thinking warm thoughts about your
company, and hopefully telling other people about your products.

Attracting new customers is a good thing. But attracting new customers is not the only way to increase
your sales, and is, in fact, the hard way of going about it. Shifting your sales focus to enticing your
current customers can make increasing your sales easier – and best of all, build the customer loyalty
that results in repeat sales.