Introduction to

Sales
Management
Prof Lokesh K N
 Interesting Stats about Sales
• Nearly 12.3% of all the jobs in the U.S. are full time sales positions. Over
one trillion (that’s a 1 followed by twelve zeros) is spent annually on sales
forces.
• In many companies, 20% of the sales force delivers 80% of the revenue.
This means that hiring talented sales people is essentially a random event.
• 64% of salespeople who fail, do so because they are in the wrong job, not
because they cannot sell.
• Sales is a talent-based profession, and so the best sales training will only
improve the performance of an individual on average by 20%. So a 5% can
become a 6%, but an 80% can become a 96%.
• Over 50% of sales managers are too busy to train and develop their sales
teams. Sensible -investment in recruiting and developing real sales talent
produces amazing returns.
• A 5% reduction in the customer defection rate can increase profits from
anywhere between 25% and 80%.
• Satisfying and retaining current customers is anywhere from 3 to 10 times
less costly than acquiring new customers.
 Concept & Definition of
Sales Management
• Sales management is the process of developing a sales
force, coordinating sales operations, and implementing
sales techniques that allow a business to consistently hit,
and even surpass, its sales targets.
• The Three Key Aspects of Sales Management
• Sales Operations
• Sales Strategy
• Sales Analysis
 Concept & Definition of
Sales Management
• Sales Operations: Building the Team
• Recruit sales people
• Set Targets
• Assign Territories
• Establish Goals and Quotas
• Sales Strategy: Defining the Sales Process
• Sales funnel

• Sales Analysis: Reporting

• Number of deals in your funnel
• Average size of a deal in your funnel
• Close ratio, or average percentage of deals that get won
• Sales velocity, or average deal lifetime before it is won
 Concept & Definition of Sales
Management
According to American Marketing
Association sales management refers “the
planning, direction and control of personnel
selling, including recruiting, selecting,
equipping, assigning, routing,
supervising,
paying and motivating as these tasks apply to
the personal sales force”.
Evaluation of Sales
Management
 Evaluation of Sales Management
Pre industrial Era
• The beginning era identified as Simple Trade / Pre-Industrial
Era, lasted from the beginning of the marketing concept to
the mid 19th century.
• Small-scale industries/crafts existed prior to Industrial
Revolution period. The owner/craftsman turned entrepreneur,
looked after all areas and functions of management.
• In this period whatever products available were harvested
with limited offerings.
• Exploration and trade in resources was the focus of the
economic activity with products as center of attraction.
• Selling was only a part-time job for these entrepreneurs.
 Evaluation of Sales
Management
• Production
In the next stage theEra
simple trade era was replaced by the
production era, continued until the great depression.
• In this era importance was given on engineering and
production.
• The primary objective was to only produce product and sell
it to the market in assumption that customers have to
accept it as alternatives were not available.
• Marketing meant "sell what is produced".
• Environment was that of a "sellers market
 Evaluation of Sales
Management
• Sales
The sales eraEra
lasted between 1920’s and 1940’s, emphasized on different
marketing related aspects rather than product only.
• Economic recession of 1930s was the starting point where demand
declined.
• As consumer markets were saturated and competitions were increasing day
by day focus is on sales and sales promotion with emphasis on sales volume.
• Marketing means "product does not sell by self-it has to be pushed.
Customers are to be manipulated."
• Environment is highly competitive where "supplies are in excess and
production capacity is more
• Here price became one of the most important features to organizations to get
an edge over their rivals.
 Evaluation of Sales Management
Marketing Era
• During the post Second World War phase, World featured
economic boom resulted in a urgent need for a separate
department for marketing called as Marketing Department
Era.
• Business consolidated market, market related activities like
adv., promotion, public relation etc. under marketing
department and emphasized on branding.
• Focus is on "customer satisfaction." Emphasis is on "problem
solving" on customer "needs" and "wants“ to achieve customer
loyalty.
• Marketing means customer satisfaction before, during and after
sales.
• Environment is that of “buyers market” having severe
competition
 Evaluation of Sales
Management
i) This sub-stage within marketing concept identified as the
relationship marketing concept.
i) The goal of the organization is to build-up a long-term
relationship with customers.
ii) The general focus has changed to lifetime customer
value and customer loyalty.
iii)Customer relationship management and data-mining
become the buzzwords in recent marketing scenario.
ii) The second sub-stage within the marketing concept is
identified as social/mobile marketing concept.
i) It summed-up the knowledge and theories of its
predecessor era but focuses on real-time connections
and social exchanges based on build-up relationship
driven by the consumers.
ii) In this concept businesses are connected 24/7 to
current, future and potential consumers in real time.
 Nature of Sales Management

Nature of sales Management can be explained by

• Its integration with marketing Management
• Relationship Selling
• Varying Sales responsibilities
 Nature of Sales Management
Integration of Sales Management with Marketing management 
• Aligning the sales plan with the marketing plan
• Marketing Research
• Customer Service
• Coordination
• Promotions (including advertising, Sales Promotion, Publicity & PR)
Relationship Selling 
• Every relationship is an exchange
• Relationship Marketing aims at creation of customer loyalty
• The spectrum of relationships include
• Transactional relationship (Selling)
• Value added relationship (understanding the current and future
needs)
• Collaborative relationship (Partnering)
• Transactional Relationship / Selling:- one type of relationship
marketing in which salespeople make one-time sales to price-
oriented customers ,who are not contacted again
 • Value – added Relationship / Selling:- understanding current and
future needs of customers and meeting those needs better than
competitors with value – added solution to their problems
• Collaborative relationship :- a type of relationship marketing in
which a selling organization works continuously with its large
customers to improve the customer performance in terms of
operations , sales and profit

Varying Sales responsibilities 

• Response Selling
• Sales Support
• Technical Sales Support
• Demand Creator or business developer
• Solution vendor
 THE NATURE AND IMPORTANCE OF SALES
MANAGEMENT

According to Robert N. McMurry in his famous article ‘The

Mystique of Super Salesmanship’ (Harvard Business Review,
March-April 1961, p.114) classified a salesperson’s position
in the organization on following ways:-

•Position where a Salesperson’s job is predominantly to

deliver a product;

•Positions where a salespersons is predominantly an internal

order taker;

•Positions where a salesperson is also predominantly an

order taker but works in the field;
 THE NATURE AND IMPORTANCE OF SALES
MANAGEMENT
•Positions where a salesperson is not expected or
permitted to take an order but is called only to build
goodwill or to educate an actual or potential user;

•Positions where the emphasis is placed on technical

knowledge;

•Positions which demand the creative sales of tangible

products;

•Positions requiring the creative sale of intangible

products;
 THE NATURE AND IMPORTANCE OF
SALES MANAGEMENT
While the role of sales management professionals
is multidisciplinary, their primary responsibilities are:-

(a) Setting goals and standards for a sales-force;

(b) Planning, budgeting, and organizing sales

program to achieve pre-defined goals;

(c) Implementing the program with proper segmentation

and

(d) Controlling the overall program and evaluating

the results.
 Objectives of Sales
Management
Sales management necessitates several objectives which are
executed by sales managers. There are three such main
objectives exist in the operational part of the organization:-

1.Sales Volume
2.Contribution to profits
3.Continuous Growth

However it is the top management who are responsible

to make skeleton of the organizational operation and has
guided the lower management with full proof strategy
to achieve these objectives of sales management.
Emerging Trends in Sales
Management Customer
&
Orientation
Win Profile
Opportunity Global &
through new Ethical Issues
selling methods

Creating Build
Emerging
Solution through Relationship &
Trends in Sales
technological Customer
innovation Management
Orientation

Situation Identify
Opportunity
Analysis
Diversity
 Emerging trends in Sales
Management
•Global Presence- Being global, face stiff challenges due to differences in
culture, language and taste and preferences of customers & it is not easy to adopt
global condition. So sales force should have well equipped with improved technology,
strategy and operational to upgrade themselves for international level.

•Innovative technology- Revolution in technology helped companies to

communicate with world-wide customers in ease way. To promote products sales
management should adopt new innovative technology to gain edge over competitors.

•Better Customer Relationship Management (CRM) –

• Customer Relationship Management systems are powerful tools designed to give
organizations a holistic view of the customer relationship by integrating marketing,
sales, and customer support.
• It is not only building the brand image but also provide favorable condition to
operate.
 Emerging trends in Sales
Management
•Diversity among Sales-force- There is always exist diversity
between sales-force of an organization. Sales manager has to
accommodate himself with people of different background within his
sales-force.

•Team Based Selling Approach- In recent years it is common

approach for the organization to sell the product as a team to build long-
term relationship with potential customers. It is also very useful when
technically complex products are in the process to sell. Generally sales
team consists of top management, inbound and outbound salespersons,
technical specialists etc.

•Multi-channel Operations- in today’s competitive world, multi-

channel operation system is very useful to reach out for potential
customers in different ways. It is very handy for i) lowering channel cost,
ii) customized selling techniques with broad coverage.
 Emerging trends in Sales
Management
•Ethical and Social Issues- In recent years it is necessary to abide
social and ethical issues such as legal constraints, provide social values
to customers’ expectations and taking part in events related to corporate
social responsibilities. Sales manager has to understand the complex
nature of the society and take necessary steps to deal impartially with
various social groups.

•Professionalism within Sales-force- Sales manager should have

professional attitude to process sales operation. As customers are well
informed and aware about the market condition thoroughly so it is
necessary to gather knowledge, skills and right attitude to motivate them.
Reliability, professionalism, integrity and thorough market knowledge is
very necessary for today’s competitive world.
 Technology’s Impact on Sales
• Big Data: 
• In today’s world, competitive advantage for sales organizations
depends largely upon the ability to successfully capture,
manage, and analyze massive volumes of customer data, that
contains insights into customer behaviors and buying habits
• Despite this, the average company only analyzes roughly 12% of
the data that they have available.
• Sales organizations can now manage prospecting using Big data
• Big data analytics tools help organizations focus their sales
efforts on the most promising and profitable activities and
customers.
 Technology’s Impact on Sales
•  Social Platforms: 
• The explosion of social technology has given rise to a number of social
media platforms for attracting and engaging new customers, a vital
step in getting a customer into the sales funnel.
• Unlike conventional sales, social media makes it possible to shake
millions of hands from across the entire world all at once.  
• Statistics show that a majority are turning to peer recommendations and
reviews on social media as part of their product research—in fact, for the
average customer, peer recommendations carry 10 times the weight
of recommendations from salespeople.
• Even more revealing is the fact that most buyers have all but completed
their sales journey before ever contacting a seller.
• Customer feedback on social media sites also helps businesses refine and
shape their messages and sales tactics to ensure greater success in the
future.
• Social platforms offer a unique advantage for sales teams, and studies
suggest that 78% of sales professionals who use social media
consistently outsell their peers who don’t.   
 Technology’s Impact on Sales
Sales Force Automation Systems:
• Statistics show that businesses without automation spend 71 percent of
their time and resources planning and defining business processes. The
same holds true for sales organizations.
• Selling requires a number of tedious, time-consuming, and repetitive
tasks, such as scheduling sales appointments, sending follow-up emails,
and updating sales opportunities(all of which reduce productivity and
profitability).
• Sales Force Automation (SFA) technology solutions automate many tasks,
freeing up sales employees to focus on activities that generate more sales
and revenue.
• SFA allows sales managers to keep their teams up to date on current and
new products and services. With SFA, managers can also have instant
access to activities of individual sales employees, sales figures,
opportunities, customer complaints, and other data used to determine sales
success.
• Armed with information provided in real-time, managers can take action
and make adjustments quickly to optimize efforts.  
 Technology’s Impact on Sales
Mobile technology: 
• The proliferation of mobile devices, such as smartphones and
tablets, has changed many aspects of the selling process forever.
• For customers, the ability to research, evaluate and purchase
products and services online using this technology has transformed
the buying experience.
• Marketers and sales teams should take that into account, since
research shows 93% of consumers who use their mobile device
to research prospective products and services end up making a
purchase
 Technology’s Impact on Sales
Cloud-based CRM Technology: 
• Cloud technology takes CRM to a whole new level by freeing up
employees from onsite computers and servers. When CRM data is
stored in the cloud, it can be accessed directly from anywhere and
at anytime.
• Armed with up-to-date, relevant information and the ability to
contact customers and prospects while on the go, a sales team
becomes more agile, effective, and productive.
• As for investment costs, the average return on investment for
CRM tools is $5.60 for every $1.00 spent.  
 Personal Selling
• Personal selling is also known as face-to-face selling in which one
person who is the salesman tries to convince the customer in buying
a product.
• It is a type of promotional method which involves personal touch
• In this method salespeople not only inform potential customers
about a company’s product or services, they also use their power of
persuasion. 
• Personal selling often plays a dominant role in industrial firms,
while in other firms its role is minimized.
• The emphasis placed on personal selling varies from firm to firm
depending on a variety of factors, including the nature of the
product or service being marketed, size of the organization, and
type of the industry.
 Features of Personal Selling:

• Personal selling involves a face-to-face contact between

the salesman and the prospect.
• In personal selling, the emphasis is on the development of
permanent and lasting relations with prospects 
• Personal selling requires a flexible approach
• Personal selling is the art of convincing the prospect and
influencing his mind, in a favorable way.
• The ultimate goal of personal selling is mutual satisfaction
of the interests of both – the salesman and the prospect.
                    
 Types of sales organization

• The structure of the sales-organization, usually depends upon the

following factors:
• Nature and size of the firm.
• Methods of distribution, adopted by the firm.
• Selling-policies of the firm.
• Financial conditions of the firm.
• Can be categorized into
• Line organization
• Line and staff organization
• Functional organization
• Horizontal organization
 Line Organization

Characteristics:
This is the oldest & simplest type normally
Head
used in smaller firms and in firms where there
Marketing is a small selling force.
All managers have line authority to direct and
Sales
Manager control subordinates. Used in small firms /
departments
Area Sales Area Sales
Area Sales Area Sales

Manager1 Manager2
Manager3 Manager4 Advantages: Simple organization, clear
authority, quick decisions, low cost
salespeople salespeople salespeople
salespeople
Disadvantages: No support to line managers
from subordinates who have specialized
knowledge / skills. Less time for planning /
analysis
 Line and Staff Organization
Characteristics:
Specialist staff managers are available for senior marketing / sales managers. Staff
managers’ role is to assist / advise line managers. Used in medium and large size
organizations
Head-Marketing

Marketing Research Promotional Customer Service

Sales Manager
Manager Manager Manager

Advantages: Better marketing

Area Sales Area Sales Area Sales decisions, superior sales performance
Manager- Manager- Manager-
1 1 1

Disadvantages: High cost and

Salespeople Salespeople Salespeople
coordination,
slower decision making,
conflict may arise if staff managers’ role
is not clear
 Functional Organization
Characteristics: It is based upon the premise that each individual in an organization,
executive and employee, should have as few distinct duties as possible. Each
functional specialist has line responsibility over salespeople. Used by a large firm
with many products / market segments, minimizing line authority to functional
managers
Head-Marketing

Marketing Research Promotional Customer Service

Sales Manager
Manager Manager Manager

Area Sales Manager #4

Salespeople

Advantages: Qualified specialists guide sales force, simple to

administer

Disadvantage: confusion due to more managers giving orders to sales force

 Horizontal Organization

Operations Team:
Research & Design Team: • Production / Operations
• Customer Research • Quality Assurance
• Product / Service Design • Systems Engineering

Planning Team:
• Strategic Planning
• Accounts, Finance
• HR, Administration
• Chief Operation Officer

Customer Support Team: Customer Satisfaction

• Information Team:
• Service • Sales & Marketing
• Training • Pricing, Promotion
• Channels, Logistics
Characteristics: Removes management levels & departmental
boundaries. Except planning team, all others are members of cross-
functional teams. Used by firms having partnering relationships with
customers.

Advantages: Reduction in supervision, unnecessary tasks, & cost;

Improved efficiency and customer responses.
Specialization within Sales Organization
• Needed to increase effectiveness of sales force
• Done by expanding basic sales organization
• Basis of specialization
• Geography
• Type of product
• Market
• Combination of above
• Criteria for selection – (1) nature of product, (2)
sales force abilities, (3) demands of selling job,
(4) customer and market facts
 Geographic Specialization

Head-Marketing

Marketing Research General Sales Customer Service

Manager Manager Promotion Manager
Manager

Branch Sales Branch Sales Branch Sales Branch Sales

Manager-1 Manager-2 Manager-3 Manager-4

Salespeople Salespeople Salespeople Salespeople

Characteristics: salespeople, assigned geographic areas, are
responsible for all selling activities to all customers within assigned
areas. Branch sales managers adjust marketing plan to local needs

Advantages: Better market coverage and customer service, more control

over sales force, quick response to local conditions & competition

Disadvantages: Limited specialization of marketing tasks. Hence, it

is combined with product / market sales organization
 Product Specialization

Head-Marketing

Marketing Research General Promotion Sales Training

Manager Sales Manager Manager Manager

Area Sales Managers – Area Sales Managers –

Product Group ‘A’ Product Group ‘B’

Salespeople – Salespeople –
Product Gr. Product Gr. ‘B’
‘A’

Advantage: Each product gets specialized attention from the

salesforce

Disadvantage: Sometimes, more salespeople contact the same customer,

resulting in customer dissatisfaction and higher cost
 Market Specialization

General Sales
Manager

Sales Manager- Sales Manager- Sales Manager-

Sales Manager-
International- Government Consumer Markets
Commercial
Markets

Area Sales Mgrs Area Sales Manager- Area Sales Manager- Area Sales Mgrs-
International Commercial Government Consumer Markets

Sales Executives Salespeople Salespeople Salespeople

• Characteristics: Desirable when customers are classified by type, user
industry, or channel. Salespeople carry out all activities for all products only
for specific customer groups

• Advantages: Meets needs of specific groups, implements

customer customer-centerd philosophy of the
company
• Disadvantages: Geographic duplication, high cost
 Combination Sales Organization

Director – Sales
& Marketing

General Manager General Manager General Manager General Manager

Sales - North Sales - East Sales - West Sales - South

Regional Sales Regional Sales Regional Sales

Mgr. – Govt. Mgr. - Commercial Mgr. - Dealers

Salespeople Salespeople Salespeople

• Characteristics: Many firms use some combination of
specialisation organizations, called hybrid or combination sales
organisation, with a view to minimize disadvantages and
maximize advantages of specialization organizations
 The Sales Process
As a part of selling activities, if salespeople follow the steps or
phases shown below, their chances of success are far better.

Prospecting & Preapproach / Presentation &

Qualifying Approach
Precall planning Demonstration

Follow-up & Trail close / Overcoming

Service Closing the sale Objections

• The sequence of above steps may change to meet the

sales situation in hand.
 Selling Process

Prospecting: Identifying likely new customers

Leads
Developing lists of Potential Customers

Pre-approach (Qualifying)
Finding and analyzing
information about prospects
Evaluating a prospect’s
potential
Prospecting
It is identifying or finding prospects i.e. prospective or potential
customers.
Methods of prospecting or sales lead generation are: (1) referrals
from existing customers, (2) company sources (website, ads.,
tradeshow)(3) external sources (suppliers, intermediaries, trade
associations), (4) salespersons’ networking, (5) industrial directories,
(6) cold canvassing
Qualifying
Companies qualify sales leads by contacting them by mail
or phone to find their interests (or needs) and financial
capacity.
Leads are categorized as: Hot, Warm, and Cool
Approaching The Prospect

HOW DO WE MAKE THE

INITIAL CONTACT & BUILD
RAPPORT

There is only one

time to make a first
impression
 Preapproach
• Information gathering about the prospect.
• Sources of information: the Internet,
industrial directories, government
publications, intermediaries, etc.
• Precall planning
• Setting call objectives
• Tentative planning of sales strategy: which
products, features and benefits may meet the
customer needs
 Approach
• Make an appointment to meet the prospect
• Make favorable first impression
• Select an approach technique:
• Introductory
• Customer benefit
• Product
• Question
• Praise
• The approach takes a few minutes of a call, but it
can make or break a sale
 Presentation and Demonstration

• There are four components:

• Understanding the buyer’s needs
• Knowing sales presentation methods / strategies
• Developing an effective presentation
• Using demonstration as a tool for selling

• If done correctly , it greatly improves the chances of

a sales person’s chances of getting the sale.
 Understanding the buyer’s needs
• Firms and consumers buy products / services to satisfy needs
• To understand buyer’s needs, ask questions and listen
• Questioning and listening are more important than talking.
• In business situations, problem identification and impact
questions are important
• E.G.
• Have you experienced any problems on quality and
delivery from the existing supplies?
• What impact the quality and delivery problems will have
on your costs and customer satisfaction?
• A need-satisfaction approach involves carefully listening to
the buyer’s needs and then clearly explaining how the product
can satisfy those needs.
Knowing Sales Presentation Methods/Strategies
Firms have developed different methods / styles / strategies of sales
presentation
Stimulus response method / canned approach.
• Idea is that various stimuli elicit predictable response
• It is a memorized sales talk or a prepared sales presentation.
• The sales person talks without knowing the prospect’s needs. E.G.
Used by tele-marketing people
Formula method / formulated approach.
• Assumed that buying process for most buyers is essentially
identical and that buyers can be lead through certain mental states.
• These mental states is referred as “AIDA” (attention, interest,
desire, and action).
• It is used if time is short and prospects are similar.
• Shortcomings are: prospects’ needs are not uncovered and uses
same standard formula for different prospects.
 Sales Presentation Methods (Continued)

Need – satisfaction method

• Interactive sales presentation
• First find prospect’s needs, by asking questions and
listening
• Use FAB approach: Features, Advantages, Benefits
• Effective method, as it focuses on customers
Consultative selling method / Problem-solving approach
• Salespeople use cross-functional expertise
• Firms adopt team selling approach
• It is used by software / consulting firms
 Developing an Effective Presentation
Some of the guidelines are:
• Plan the sales call

• Adopt presentation to the situation and person

• Communicate the benefits of the purchase

• Present relevant and limited information at a time

• Use the prospect’s language

• Make the presentation convincing – give evidence

 Using Demonstration
• Sales presentation can be improved by demonstration
• Demonstration is one of the important selling tools
EGs: Test drive of cars; demonstration of industrial
products in use
• Benefits of using demonstration for selling are:
• Buyers’ objections are cleared
• Improves the buyer’s purchasing interest
• Helps to find specific benefits of the prospect
• The prospect can experience the benefit
Selling Process

• Handling Objections
• Questions
• Reservations
• Understand Concern
• Counterarguments
• Acknowledge concern
• Clues to process
Overcoming Objections

IF HE HADN’T TOLD
ME WHAT HIS OBJECTION
WAS, I NEVER WOULD
HAVE BEEN
ABLE TO HELP!
Overcoming Sales Objections / Resistances
Objections take place during presentations / when the
order is asked
Two types of sales objections:
• Psychological / hidden
• Logical (real or practical)
Methods for handling and overcoming objections:
(a) ask questions,
(b) turn an objection into a benefit,
(c) deny objections tactfully,
(d) third-party certificate,
(e) compensation
Selling Process

• Closing the Sale

• Closing signals
• Trial close
• Asking the prospect to buy
 Trial close and Closing the sale
• Trial close checks the attitude or opinion of the
prospect, before closing the sale (or asking for the
order)
• If the response to trial close question is favourable,
then the salesperson should close the sale
• Some of the techniques used for closing the sale are:
(a) alternative-choice, (b) minor points, (c)
assumptive, (d) summary-of-benefits, (e) T-account,
(f) special-offer, (g) probability, and (h) negotiation
 Closing techniques

(a) alternative-choice (prospect is given the choice)

(b) minor points (payments in installments, colour, model)
(c) Assumptive (starring to wrap, getting credit card
machine, asking would you like to take it with you )
(d) summary-of-benefits,
(e) T-account- balance sheet close(Assets and Liabilities)
(f) special-offer
(g) probability (I will think about it – Please let me know
what is the probability)
(h) Negotiation (both of us win)
 Negotiatio
n
When to negotiate?
(a) When the buyer puts certain conditions for buying
to the seller,
(b) When agreement between the buyer and the seller is
needed on several factors,
(c) When the product is customized,
(d) When the final price is to be decided
How to prepare for negotiation?
(a) planning, (b) building relationship, (c) purpose
Styles of negotiation
(a) I win, you lose, (b) Both of us win (or win-win
style), (c) You win, I lose, and (d) Both of us lose
Selling Process

Following Up
• Commitments met
• Shipment
• Performance

• Satisfied customers rebuy & recommend

 Follow-up and Service

• Necessary for customer satisfaction

• Successful salespeople follow-up in different ways:
For example,
• Check order details
• Follow through delivery schedule
• Visit when the product is delivered
• Build long-term relationship
• Arrange warranty service
Thank you