Despite having a knack for closing the deals, having an effective marketing strategy and possessing a well-crafted website, you are not able to maximize your profit? The aforementioned elements are required for an organization but not enough to maximize your revenue.
As sales are the backbone of a business, the prime focus of an organization should be on sales management in order to maximize the profit. An efficient sales management not only maximizes the profit but also streamlines the internal team.
With good sales management, two factors are affected by an organization. First, it brings more revenue by maximizing the number of closed deals and second, it helps to streamline the sales team in terms of achieving targets, setting pipeline, making timely follow-ups, etc.
What is sales management?
The definition committee of the American marketing association sales management defines the term “sales management” as “The planning, direction, and control of personal selling including recruiting, selecting, equipping, assigning, routing, supervising, paying, and motivating as these tasks apply to the personal sales force”.
But, these days the definition of sales management has been changed. Therefore sales management is not limited to only tracking the business and supporting the team. It covers a huge part of the business including introducing the new product, effective marketing strategy of the existing product, new pitch training to the sales team, analyzing reports on the conversion rate, etc.
This huge portion is divided into three parts:
- Sales Operations
- Sales Strategy
- Sales Analysis
Sales Operations (Building and managing teams)
Every small and big activity of the organization starting from hiring sales reps, building a team, motivating the team to plan the sales process, comes under the sales process. An efficient sales manager always keeps an eye on every small factor in the organization. Through the micro-management system, he tries to identify the leaky bucket and fix it.
When it comes to good team-building, a manager finds the flaw in the team, fixes it at the earliest and motivates them to work efficiently to be the result-driven resource of the organization. There are three key factors a sales manager need to follow:
- Set Targets
- Assign Territories
- Establish Goals and Quotas
The initial step for a sales manager is to identify the real challenges and set the realistic target for his team as per his strategy.
In order to achieve this target, he needs to identify the unique quality of each team member and assign the relevant responsibility to have more productivity. Most of the cases, we see the random assignments are being given to the team members which cause the failed result. Hence, identifying the ability and assigning the task is more efficient than a random assignment.
The last phase of the sales operation process is to set the goals and quotas for each team member. A sales manager should be transparent while communicating with the team members regarding the goals and their quota.
Sales Strategy (Sales process)
After building a successful team, a manager should move to the sales process. In this stage, s/he needs to:
- Plan sales process
- Design the sales strategy
- Forecast the closed deals
Once a manager is all set with his team, s/he plans the sales process that can help him/her to maximize the result. First s/he needs to get the leads and segment the lead by different categories.
For example, there are lots of leads s/he received from the marketing team and wants to utilize each lead properly. In order to do so, s/he will categorize the leads such as qualified leads, unqualified leads, leads who have issues with the price, etc. Based on the different category, s/he should plan how to nurture them and distribute each lead to the relevant skillset his/her team members have.
After assigning the leads to the team members, designing the sales strategy comes into the picture. Each team member should have individual targets to achieve on a daily, weekly, monthly and quarterly basis. Setting realistic targets and conveying them in a transparent way will motivate the team members to work efficiently.
In this stage, monitoring the performance of each and every sales rep is essential. It will provide not only the track of your revenue generation process but also provide the opportunity to identify the issues and fix them for better performance.
While managing the performance of the team member to achieve the targets, forecasting the closed deal will provide you with a better idea of closing the deal for the current week, month and quarter. If the present closed deal is a way behind of the forecasted closed deal, this is the time to identify the leaky bucket and fix it or implement the new strategy.
Sales Analysis (Analysing the reports)
The last but not least part is to analyze the sales effort. It is an essential component of sales management. Once all the strategies and ideas are implemented, the respective managers are accountable to know the effectiveness of their plans.
Analyzing and creating an accurate report of the sales and sharing it with the top management will create an opportunity to set the realistic target and figure out the bottlenecks.
Why is sales management important?
The above-mentioned points provide an overall idea of sales management. It is also significant to know why sales management is an integral part of an organization. Here are the benefits of having sales management:
- Improves revenue generation rate
- Product development
- Sales maximization
- Realistic target set
- Building a strong relationship
- Opportunity to know market demand
- Optimizes distribution
- Better Ideas every time
Improves revenue generation rate
In every organization, maximizing the revenue generation rate becomes the prime focus. When you have an efficient sales management system, it helps to monitor the closed deal and implement different strategies on a regular basis to increase the revenue generation rate.
The sales reps are always in direct touch with the customers where they will be able to get constant feedback from the customers/clients. A good sales management system monitors each feedback which helps to know the expectation level of clients/customers and improve the product accordingly.
Sales maximization happens because of an efficient sales management system. It enables top management to forecast the sales and set the realistic target which should be a greater number than last year. It also manages the micro things at the agent level to fix the bottlenecks and maximize sales.
Realistic target set
Market research is also a significant part of sales management. After creating a report on sales forecasting based on market research and the average pipeline every individual has, it helps to set the realistic target. The realistic target also motivates sales reps to work efficiently.
Building a strong relationship
In each and every sales organization, the initial motive is to build a strong relationship with customers to maximize the conversion. Building a strong relationship not only provides instant sales but opens the gate for further prospecting. Sometimes, the trust level of the customers makes them return to you for the next product/service.
Opportunity to know market demand
Collecting feedback and market research are important parts of the sales management system. The requirement of the market can be forecasted through both the reports. It helps to improve the product or launch a new feature to meet the market demand.
This opens a gate for the maximum utilization of marketing channels. In this way, you will know the efficient channel to promote your product and sell it. As marketing is also a part of the sales management system, it will help you to know the medium.
Better Ideas every time
With a good strategy, if an organization has a result less than the forecasted result, that is the time to implement better ideas/strategies. Every time it provides the opportunity to experiment with the new strategies to see a better result.
Sales management strategies
Sales strategies come first in the sales process and then sales management. In order to start your sales management system, you need to strategize proper plans step by step. Every organization differs from others when it comes to sales management strategies. Here are a few common strategies all organizations adopt:
- Hiring the right talents
- Train the new members based on the sales requirement
- Align your priorities with your team members
- Segment your leads
- Distribute the leads to the relevant talent
- Identify the bottlenecks
- Concentrate on the team activities
- Find the team flaws and fix it
- Motivate your team members
- Open to customer feedback
- Utilize the technology for better productivity
- Reward your team members on their achievements
Objectives of sales management
Every organization has a certain objective. It may be a short term or long term. In order to achieve the objectives, most of the organizations emphasize sales management. The common objectives of sales management are to:
- Increase the revenue generation rate
- Continuous profit
- Organization growth
- Market leadership
Increase the revenue generation rate
As sales teams are solely responsible to generate revenue, the principal motto of a sales management system is to increase the revenue generation rate.
No organization wants to run their business in a loss. Though your organization has great profit this time, it should continue getting profit every quarter. Therefore, your sales management system should focus on continuous profit.
Everyone’s growth depends on the organization’s growth. If it grows, each department will grow which results in a good profit at the end of the day to all. This is a prime objective of sales management systems.
When an organization is successful in getting more profit and in providing customer satisfaction, sales management enables it to lead the market. Hence this is also another objective of sales management.
Sales management helps an organization in multiple areas ranging from marketing strategy, hiring talents to train the sales reps to sell effectively. Though all areas are not the responsibility of a single manager, a good sales manager should have a fair knowledge of current happenings in other departments. Being aware of all the interrelated areas of sales will provide a better idea of driving the team and managing the sales process.