Sales Management and Strategy

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Table of Contents

Strategic Sales Management and Sales Forecasting and Budgeting
Sales Force Planning and Organization
Time and Territory Management
Recruitment and Selection
Training of the Sales Force
Sales Leadership and Motivation
Sales Force Compensation
Works Cited

The business world is currently experiencing high levels of competition. This is due to availability of capital, easy entry into markets, present of substitutes and increase in the purchasing power of consumers (Sorce 6).

As a result, firms need to come up with effective and efficient strategies in order to achieve a competitive advantage over their rivals in their respective fields of operation in order to be profitable and sustainable in the short run and in the long run.

Consultative sales approach is a strategy that managers of many organizations currently use to stand at a competitive edge over their rivals. The main aim of this strategy is to develop strong relationships between firms and their clients (Sorce 9). Many managers view this strategy as a critical differentiator hence enabling a firm not only to increase its sales but also to stand at a competitive advantage over its rivals.

The relationship that is developed through consultative sales approach makes sure that a firm understand the needs and desires of its customers. In this way, the firm is capable of developing goods and services that satisfy this need. This in turn creates brand loyalty and acts as an avenue for the growth of a firm in the short run and in the long run.

From the discussion that has been presented so far, it is essential for firms to develop strong relationships with their customers. However, marketers usually try to maximize the benefits of economies of scale while utilizing the consultative sales approach. To achieve this, marketers usually believe that it is more convenient for a firm to develop strong relationships with a few large customers than many small customers (Oliver 35).

This is because firms normally incur high operational costs in marketing, selling and distributing finished products or services to the customers. Therefore, concentrating once a few large customers will reduce the extra costs, time and energy that is required to carter for many small customers.

Therefore, a strong relationship exists between constructive sales approach and marketing. It is essential first for a firm to identify its target market, come up with effective and efficient marketing strategies that will capture the attention of their targeted customers, then finally use the consultative sales approach to develop strong relationships.

However, before a firm decides to build a strong relationship with a client, it needs to have a clear understanding of them. This is essential, as it will determine the type of relationship that the firm shall develop with its clients and the tastes and preferences of the clients.

It has always been advisable that a firm partners up with clients who are innovative, creative, leaders in their respective industries, and clients who are highly experiences (Sorce 12). Collaborating with such clients will improve the reputation and credibility of a given firm hence boosting its operations in the short run and in the long run.

After the prospective customers have been identified, it is essential for a firm, through its marketing strategies, to build a strong customer commitment to the brand (Reichheld 18). In most cases, this is achieved through customer satisfaction and through the development of brand equity. This in turn results to the development of a strong relationship between a firm and its customers.

To satisfy the needs of its customers, a firm needs to deliver goods or services that are of superior quality as compared to the ones provided by rival companies in the industry. This plays a critical role in the development of brand equity.

Brand equity is a factor that is based on the level of brand loyalty, brand awareness, reputable quality of the brand, relationship of the brand and its customers and marketing impacts of the brand by its loyal customers (Reichheld 19).

It is essential for a firm to ensure that these factors are implemented successfully as they guarantee repeat purchases, protection against price fluctuations, increased responses from customers and marketing of the products by customers especially through the word of mouth.

Initially, firms strived to achieve a relationship that was based on consumer satisfaction. However, the results of recent studies have shown that despite the fact that customers might be satisfied with the quality of goods or services offered by a firm, quite a good number of them usually defect to other brands (Reichheld 19).

Thus, to overcome this setback, it has always been recommended that firms that deal with consumer products to develop brand equity with their consumers while firms that focus on industrial products should develop strong brand relationships with their clients (Reichheld 19). Several marketing strategies have been developed to ensure that brand equity is achieved.

This includes the use of electronic and print media to advertise the products. It is as a result of this fact that many advertisements of various products are found on radio, TV, newspapers, magazines, social network sites and websites with huge traffic on the internet. These adverts seek to capture the attention of customers from different cultures and backgrounds as well as customers who have different tastes and preferences.

The use of social media as a platform of advertisement and consumer engagement has also increased. It is through such forums that firms get to understand the needs, tastes and preferences of their customers and involve them in the process of manufacturing, developing, testing and marketing their final products. This form of involvement plays a critical role in brand equity.

Some firms also sponsor public events to increase the awareness of their products. Gillette for example is a brand that sponsors many sports and sports shows. Through its activities, the brand has gained a lot of recognition worldwide. Through its activities in a bid to sponsor the 2010 football world cup, Coca Cola increased its brand awareness and restored its brand loyalty to many consumers all around the globe.

On the other hand, firms that focus on industrial products use a different marketing approach in building brand relationships with their clients. Here, the sales force of a firm plays a critical role in developing a relationship that is based on interdependence between a firm and its clients through one-on-one communication (Sorce 14).

One-on-one communication has always been considered as the most convenient way to build a long lasting relationship with clients by firms that manufacture and sell industrial products. Initially, it was difficult for a firm to reach out to all its clients at an individual level. It is perhaps as a result of this that firms advocated to focus on a few large clients than many small clients.

Despite the fact that this notion is still applicable, the presence of marketing databases coupled with improvements in the utilization of the information communication technology (ICT) has improved the process reaching out to customers at an individual level.

Therefore, marketing and consultative sales approach play a critical role in developing brand equity and strong brand relationships with their clients. In the process, firms that utilize this strategy usually develop strong brand loyalty.

This is essential especially in a time where firms face stiff competition from their rivals, as firms will benefit from the economies of scale by serving their loyal customers who are always ready to pay premium prices and market the products or services of the firm through word of mouth.

This will not only increase the market share of such a firm but it will also ensure that the firm is profitable and sustainable in the short run and in the long run.

Strategic Sales Management and Sales Forecasting and Budgeting

Sales forecasting is an essential concept in sales management position of a firm. GE Appliances, for instance, put a lot of consideration on sales forecasting due to its importance in the planning its operations. GE appliances also use sales forecasting as a tool of determining the future sales of the company.

The data generated from this method is critical in the development of market mix and generation of effective leads for the firm (Mentzer 34).

Reduced costs of operations coupled with the increase in consumers have increased the level of competition in almost any industry, including the electrical appliance industry that GE Appliances operates in. Thus, to overcome this challenge, GE Appliances has utilized sales forecasting among other strategies.

Through sales forecasting, GE Appliances is able to determine its future sales values. In the process, the firm is capable of formulating effective planning strategies that will improve the quality of its products and services hence ensuring that it stands at a competitive edge over its rivals.

Sales forecasting also gives the firm information pertaining to changes in market trends, consumer tastes and preferences and the general performance of the industry (Jackson 123). With this information, GE Appliances is capable of maintaining a strong work force that is capable of meeting the needs and demands of its clients. This information is also essential in the development of budgets.

For instance, the firm might realise that the performance of some of its brands are not as per the expected standards. With this information, the firm shall spend more on advertising the product hence increasing its brand awareness into the market. This enables the firm to overcome the challenge that it might be facing as a result of increased competition within the industry.

From sales forecasting, the sales figures for the next financial period are usually determined. Consequently, the net sales, profit or loss can be ascertained. With this information, GE Appliances usually decide on whether to control or increase the budgets of its various departments (Jackson 131).

Several challenges are usually faced while creating a budget. In most cases, budgets are created based on decisions and data from a macro level of operation. However, the actual application of the budget shall be on a micro level. Therefore, to ensure that the budget is implemented in an effective and efficient manner, several considerations need to be put in place.

First, the need of the budget needs to be established. Here, the managers and head of departments need to determine all the expenses, whether direct or indirect, that they might incur. To achieve this, GE Appliances usually get this feedback from sales managers (Stanton 14).

It is also essential to ensure that there are multiple views of the budget to ensure that the budget incorporates the sales of different regions as well as different products. This will give room for the identification of non-performing assets and regions. Corrective measures shall then be included into the budget to improve the performance of these areas.

Most importantly, it is essential to monitor the actual sales figures versus the forecasted figures. Any difference that might be identified should then be corrected. This ensures that the overall objectives of the firm are achieved with the help of sales forecasting and budgeting.

Sales Force Planning and Organization

The process of sales planning includes a variety of activities that need to be conducted to ensure that the operations of a firm are effective and efficient in both the short run and in the long run (Ghosh 51). Sales planning aims at ensuring that the sales process is carried out at ease to achieve the goals and objectives of the firm.

To achieve this, GE Appliances always strives to achieve optimal utilization of its resources. Sales planning is also essential since it ensures that the current needs of customers are met. Additionally, through sales planning, forecasting the future needs of customers is also easy. However, for the process of sales planning to be successful, several considerations need to be put in place. These include:

Sales objectives
Sales policies
Sales programme
Sales procedures
Sales rules
Sales forecast
Sales budgeting
Sales strategies

Since GE Appliances operates in several countries, each country is usually divided into regions. Therefore, the sales plan that the firm developed should put into considerations the needs of the different regions.

Additionally, the sales plan of GE Appliances is also developed is based on the types of products that it sells and the customers that it has (B2B or B2C). This ensures that the overall operation of the firms is efficient in all its angles of operation.

The sales plan needs to be organized in an efficient manner in order to realize its goals and objectives. This is achieved through sales organization. Sales organization thus involves itself with the level of control and decision making hierarchy in an organization to ensure that the sales plan is executed effectively and efficiently (Roberts 87). Through careful monitoring, productivity in the sales department is usually achieved.

However, the process of sales organization usually faces a number of challenges in its implementation. For instances, GE Appliances usually faces challenges that comes from its internal as well as its external environment. For instance, GE Appliances always finds it difficult to select an appropriate sales organization structure to reflect its products and selling methods.

The trends of sales within the firm also fluctuate from time to time. Due to the changes in the market, GE Appliances now advocates for sales teams rather than individual salespersons. The operations of the firm have also expanded into new countries.

These factors have greatly affected the sales trends of the firm. However, the firm has now adopted the tall sales organization model that meets its current sales needs. The model has more promotion levels for its sales team and ensures greater control and responsibility of sales.

Time and Territory Management

The overall goal of a firm is to be sustainable and profitable in the short run and in the long run. To achieve this, the firm needs to come up with superior products and services that surpass those offered by competing firms in the market.

The firm also needs to embark on a rigorous marketing campaign to increase its brand awareness and loyalty. All these components are a factor to time. Therefore, a firm needs to plan its time in an effective and efficient manner in order to gain maximum benefits from the limited resource.

To achieve this GE Appliances usually has sales goals and objectives that have to be achieved within a specified period of time. These targeted sales can be either short-term goals or long-term goals. The sales manager thus needs to develop a team that will achieve these goals within the stipulated timeframes. The achievement of these goals increases the market share and control of a firm.

It is with regards to this that GE Appliances is now operational in every state within the United States and Canada. Therefore, to ensure that its operations are conducted effectively, the firm’s sales operations have been divided into different regions with each region having its specific goals and objectives to achieve.

However, these goals and objectives are always in line with the overall goals and objectives of the firm. This ensures sustainability and continuity of the organization in the short run and in the long run.

Recruitment and Selection

For an organization to operate in an effective and efficient manner, it needs to have qualified employees who are capable of performing work as per their jobs descriptions to meet the needs and desires of the organization. To achieve this, an organization needs to have a rigorous training exercise that ensures that the selected employees have the desired skills, knowledge and expertise to conduct their roles effectively and efficiently.

GE Appliances usually applied different recruitment exercises to select employees to become part of its workforce. These different techniques are usually employed to fit the different job descriptions that the firm might have to ensure that the right individual is selected for the right job (Kujnish 64).

The first process that the Human Resource Department of GE Appliances conducts while recruiting employees is to short list candidates who have applied for the various posts that have been advertised. In most cases, the firm selects candidates from two broad bases. The firm can select candidates from its internal workforce.

Here, the firm identifies a number of employees who are capable to taking the job opening that is available and sustaining its needs and requirements. To achieve this, the HR department can select an individual from any departments to fill in the vacant position. In other instances, the HR department can decide to select an employee from the department where the vacancy is available.

In most cases, the individual who is selected to hold the vacant position is usually from a lower or the same level of employment. Thus, this form of selection is normally viewed as a promotion exercise and plays a critical role in the motivation of employees. Alternatively, the firm can select candidates from external sources.

Here, the company seeks to award the vacant position to an individual who is not part of their workforce. Here, the firm normally advertise through various forms of media. Occasionally, the firm links up with renowned educational institution from which it selects the best students to fill in the vacant position.

The selection process usually commences after the candidates have been identified and short-listed. The selection process should be rigorous to ensure that the skills of the candidate who is selected for the job conform to the skills that are required for the job at hand.

Therefore, GE Appliances usually check the educational background of the candidates, their work experience, personality, goals and objectives to determine whether they are suitable for the job at hand. However, to ensure that this process is conducted efficiently, the GE Appliances usually follows the following procedure:

Application for the Job
Preliminary interview
Testing
Final interview
Reference confirmation
Health examination
Job offer

At the application stage, the firm can determine the candidates who might be right for the job by evaluating their skills and qualifications after which the candidates who do not fit the job description are eliminated in the preliminary interview. While searching for sales representatives, the firm shall only select individuals who possess desirable communication, expression, marketing and analytical skills.

The candidates should be attitudes and personalities of the candidates play a critical role in the selection process. After the final interview, the candidates who exhibited the best performance are usually selected, their references are verified, and the health of the candidates is determined.

At this point, the firm usually has its desirable candidate(s) for the job. While offering the job, the firm gives the candidates more information regarding their nature of work, salaries, benefits and so on. However, before the candidate commences work, he/she needs to be trained to ensure that he/she performs the roles of the post to the best of his/her ability and as per the requirements of the firm.

Training of the Sales Force

Training the sales force is an essential process as it ensures that the sales employee develop the knowledge, skills, attitude and expertise that will increase their productivity and the overall productivity of the firm at large.

However, firms need to develop effective training plans especially while training sales personnel because the challenges that the trainees might face during the training exercise is very different to the actual challenges that they might face while working on the ground at the market place.

It is thus essential for the form to adopt, design and develop training plans that reflect the actual situation on the ground as much as possible. According to Ingram (2009), most organization follow the following steps in implementing their sales training programs (110). These steps include:

Assessment of sales training needs
Setting the goals and objectives to be achieved
Evaluation of training alternatives that might be present
Designing the sales training program
Conduction of the sales training
Follow up and evaluation

The steps mentioned above are critical in a sales training program since they highlight the personalities, skills and expertise that the trainees have, contain the goals and objectives that have to be achieved by the end of the exercise and they give room for alternative methods and strategies to be used. After the training process is finished, a follow up exercise is usually conducted.

This exercise is conducted to determine the effectiveness of the completed training exercise from the point of view of trainees to ensure that the strengths of the program are maintained while the weaknesses are modified. This process is essential as it maintains the rigor of the training exercise. The training program is also important as it natures the attitudes and perceptions of the trainees.

GE Appliances always strive to develop positive attitudes in its employees. The firm also emphasises on the importance of self-motivation since sales staff usually encounter a lot of challenges that impact negatively on their productivity. The firm also trains its sales staff on professionalism.

Most employees, especially those who are fresh from college usually view the sales job as a step through career towards being promoted and achieving their dream careers. In the process, such employees might be tempted to use short cuts to advance on their career path rather than hard work. In most cases, this has always been the failing point of the careers of many sales representatives.

The training of sales staff is also essential as this process is used to impart the culture and core values of the firm to employees. Employees also become aware of the rules and policies that govern their conduct. The targets and goals that they are to achieve are made clear. As a result, the decisions and actions that an employee would make after the training shall always be in line with the culture and ideologies of the firm.

This will not only ensure that the employee achieves his/her goals and objectives of his/her post but it also plays a critical role in the achievement of the goals and objectives of the individual as well as those of the firm. Training is thus essential to improve sales and ensure the short term and long-term sustainability of the firm as well as building the careers of the sales staff.

Sales Leadership and Motivation

As it has been discussed, motivation is an essential factor that has to be considered for a sales representative as well as the firm to achieve its set goals and objectives. In the course of the management practice, several factors that determine the level of motivation in employees have been identified.

From a sales perspective, it has been identified that the relationship that exists between the sales manager and his/her sales staff plays a critical role in their motivation. On these grounds, Ingram (2009) concluded that through their actions, managers should ensure that they have a strong and stable relationship with their employees (114).

At the same time, managers should act as leaders, mentors and role models of their employees. This will greatly improve the relationship that exists between them and maximize on their productivity.

As a leader, the sales manager is responsible for all the sales representatives and the products that are being sold in GE Appliances. It is the role of the sales manager therefore to monitor the performance of his/her employees as well as the achievement of the sales targets.

However, since sales employees are usually in the field, the sale manager is expected to develop strategies that will enhance the relationship that he/she has with his/her employees. In most cases, it has been advocated that the sales manager becomes a mentor, facilitator, and role model outside the office.

He/she should understand and try to meet the needs of his employees regardless to whether they are professional or personal.

In GE Appliances, sales managers usually have an open feedback mechanism that enables them to understand the experiences and challenges that the sales staff might be experiencing in the field. This enables them to come up with corrective measures that ensure that a conducive working environment prevails.

Furthermore, it is the role of the sales managers to determine the factors that motivate and de-motivating their employees hence affecting their performance. Employees should always be regarded as assets of an organization (Robbins 32). Therefore, it is the role of the managers to ensure that they have a great experience at the workplace.

To motivate their employees, sales managers at GE Appliances develop a compensation package that conforms to the level of qualification of a sales representative, the position held and the skills he/she possess.

Other than the overall compensation package, managers also use incentives to boost the morale of their employees. These incentives can be in the form of bonuses, commissions or profit share. Most organizations including GE Appliances use the incentive plan below (Zoltners 81).

Most organizations including GE Appliances

GE Appliances also has non-monetary motivation schemes. The stock option is one of the most effective techniques that the firm uses. Here, the firm rewards its employees in form of stock, dividends or bonds other than cash. Giving employees stocks not only increases their financial share in the company but also makes them to feel as part and parcel of the organization that they work for.

This ultimately increases their level of commitment and determination to ensure that the firm excels. Additionally, the firm also gives various awards on different categories to congratulate the hard work exhibited by individual employees, teams and departments. The firm also ensures that its employees enjoy a conducive working environment.

However, motivational factors can only be successful if sales managers have identified and eliminated de-motivating factors. Sales managers should therefore avoid at all costs to have situations that reduce the morale of its sales force.

Examples of such instances include having different payment schemes for employees who are at the same level, failure of appraisal systems, and poor resources for work. These factors will ultimately reduce the morale of employees hence reducing their performance.

It is thus the role of sales managers to identify and eliminate such factors to ensure that the operations of all employees are as per the expected standards of the firm. This will increase the ease at which the firm as well as its sales force will achieve its short term and long-term goals and objectives.

Sales Force Compensation

As it has been discussed before, compensation is an essential aspect that determines the performance of an individual. This is because, most sales representatives are optimistic regarding the compensation package that they will receive during the time that they will commence their work on a given organization.

Employees usually regard a compensation package that will be able to carter for their needs and reflects their level of employment, skills and expertise (Bernardin 91).

It is with regards to this that GE Appliances takes this factor into consideration to ensure that the process of designing the compensation package reflects the employment level of an individual, his/her qualifications and the effort that an employee puts to the firm.

Additionally, the firm recognizes the fact that employees regard the level of loftiness that they get from their compensation. It is with regards to this that the firms also puts a lot of care while designing the compensation packages of various employees who are at the same level of employment.

Thus, the first step that sales managers consider while developing compensation packages is the preparation of job descriptions of the sales representatives. At GE Appliances for instance, sales representatives may be involved in the selling of kitchen appliances, dishwashers, washing machines or marketing of these products to either businesses or customers.

Therefore, it is evident that these employees conduct different tasks and hence their compensation should be different. The sales managers then need to measure the job description of an employee to the sales targets. Here, the sales managers need to consider factors such as the number of sales made, number of new customers introduced, volume of goods sold and the revenue generated by an employee.

Once this has been done, the sales manager then needs to determine the categories of compensation. Usually, the education background, skills and expertise play a critical role in the development of these categories. Finally, the sales manager should then develop a compensation plan that includes all the employees and reflect the effort that they have put in conducting the activities of the firm.

These compensation packages should not be too little or too much. They should effectively reflect the effort, skills and expertise of an employee. In addition to this, sales managers should also give sales employees incentives for the extra work done or effort put.

Works Cited

Bernardin, John. Human Resource Management. New York: McGraw Hill, 2008. Print.

Ghosh, Nathan. Management Control Systems. New Delhi: Prentice-Hall, 2005. Print.

Ingram, Thomas. Sales Management: Analysis and Decision Making. New York: M.E. Sharpe Inc., 2009. Print.

Jackson, Ralph. Sales and Sales Management. New Jersey: Prentice Hall, 1996. Print.

Kujnish, Vashisht. A Practical Approach to Sales Management. Mumbai: Atlantic Publishers and Distributors, 2006. Print.

Mentzer, John. Sales Forecasting Management: A Demand Management Approach. California: Sage Publications, 2005. Print.

Oliver, Lawrence. “Whence Consumer Loyalty.” Journal of Marketing 63.1(1999): 33-44, Print.

Reichheld, Frederick. The Loyalty Effect. Boston: Harvard Business School Press, 1996. Print

Robbins, Stephan. Organizational Behaviour: Concepts, Controversies and Applications. New Delhi: Prentice Hall, 1999. Print.

Roberts, Anthony. Management Control System. New Delhi: McGraw-Hill, 2008. Print.

Sorce, Patricia. Relationship Marketing Strategy. Sydney: Printing Industry Centre, 2002. Print.

Stanton, Rich. Management of a Sales Force. New Delhi: McGraw Hill, 2003. Print.

Zoltners, Prabhakant. The complete Guide to Sales Force Incentive Compensation. New York: Amacom, New York, 2006. Print

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