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| The Impact
of Ineffective Sales Management |
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For any business, strong sales
performance can drive growth, and poor sales performance can result in
failure. Despite the fact that the
effective management of salespeople is essential to both a
company's and its salespeople's success, salespeople frequently are
allowed to muddle along without either the benefit or discipline of
effective sales management, in whole or in part. The 2+
million businesses in the U.S. with 5 to 99 employees are particularly
vulnerable to this shortcoming. The result? According to
the U.S. Census Bureau, more than 70% of
former small business executives cite low sales or inadequate cash
flow as the reason their businesses closed.
Most small-company executives would not dare run
their companies without
hiring good accountants to help them manage their finances.
Why? Because they lack the training, knowledge, and practical
experience necessary to get the job done. So why do some of
these same executives run their sales forces single-handedly or with
minimal guidance when their expertise lies outside of selling?
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What is Sales Management?
Companies use salespeople to find, sign, and service customers,
and to build revenue and profits. Sales management is the
discipline of maximizing the benefits a company and its customers
receive from the efforts of its sales force.
That's our definition. Here are what other experts say:
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"A sales manager can have a narrow or a broad
spectrum of responsibilities including the following:
estimate demand and prepare sales forecasts; establish sales
force objectives and quotas; prepare sales plans and budgets;
establish the size and organization of the sales force; recruit,
select, and train the sales force; compensate the sales force;
control and evaluate sales performances."
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- Robert D. Hisrich and Ralph W. Jackson,
Selling and Sales Management |
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"Good sales management properly applied is
the least expensive, most effective, way to increase dollars of
revenue and margins, market share, cash flow, return on
investment, and net present value, as well as to beat the
competition and make yourself a hero. . . . It costs no more to
properly hire, train, compensate, motivate, and evaluate
salespeople. Effective time and territory management,
forecasting, planning, budgeting, and good communication and
control are no more expensive than performing these same
functions poorly."
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- Robert J. Calvin, Sales Management
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"Sales management: The attainment of
sales force goals in an effective and efficient manner through
planning, staffing, training, directing, and evaluating
organizational resources."
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- Charles M. Futrell, Fundamentals of Selling |
Note that these functions are mentioned
repeatedly in these summaries of sales management:
- Sales planning
- Recruiting / staffing
- Training
- Controlling / directing
- Evaluating
- Effectiveness / efficiency
- Compensation
Besides examining the high-level elements of
sales management, it is helpful to catalog the specific tasks that are
performed on a regular basis in a well-managed, effective sales force.
Some of these are:
| Responsibility or Task |
Required Frequency |
| Weekly (or more) |
Monthly |
Quarterly |
Annually |
As needed |
| Hire new sales staff |
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x |
| Reassign / outplace underperformers |
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x |
| Develop / refine sales plans and strategy |
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x |
x |
| Implement / update reporting system |
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x |
x |
| Establish / update compensation plan |
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x |
x |
| Develop / update sales targets / quota |
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x |
x |
| Develop / update performance standards |
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x |
x |
| Develop / update sales territories |
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x |
x |
| Conduct personnel evaluations |
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x |
x |
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| Enhance sales team capabilities via training |
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x |
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x |
| Develop and implement special incentives |
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x |
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x |
| Manage the sales budget |
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x |
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| Assess performance vs. quota and
standards |
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x |
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| Communicate sales performance internally |
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x |
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| Evaluate / review sales pipeline / forecast |
x |
x |
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| Lead sales meetings |
x |
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| Coach salespeople on an individual basis |
x |
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x |
| Provide tactical advice on sales opportunities |
x |
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x |
The Impact of Effective Sales Management
While this may seem like a lot to do, effective sales management
requires ongoing involvement with the sales force. But effective
sales management has numerous positive impacts. It can:
- Increase sales revenue and profitability
- Decrease variability of revenue due to inaccurate forecasting
- Increase sales productivity (revenue per salesperson)
- Increase customer satisfaction and loyalty
- Increase salesperson motivation
If your company's sales efforts are not living up
to expectations, it is time to take your sales efforts to the next
level, or there is a specific area where your sales organization needs
some assistance, Sales Management Services can help. Read
more about our services or
how we work with clients for more
information.
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