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Glossary – Sales Management

Sales Management

Nikiforov Alexander
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What is sales management?

Sales management refers to a key functional area of a company focused on the sales of products and services, as well as the control and increase of sales volumes. The main goal of sales management is to expand the customer base and increase sales volume. The effectiveness of specialists in this area directly impacts the company's profit, making its development largely dependent on the quality of sales management.

The primary indicator of successful sales management is revenue. For instance, the world's largest online retailer, Amazon, makes about 1.6 million shipments a day, equivalent to approximately 1.29 million dollars daily. Such a sales level requires the company to have a clear structure and coordinated work among various specialists and departments.

Sales management structure

Effective sales management implies the creation of a multi-level structure that includes:

  1. First level: Line staff, including sales and customer service managers. They are responsible for attracting new customers and retaining existing ones, processing incoming requests, and overseeing the order fulfillment process.
  2. Second level: Management of the sales personnel, led by the head of the sales department. He selects and trains sales managers, develops sales management strategies, and monitors compliance with standards.
  3. Third level: Management of the commercial division, conducted by the commercial director. He analyzes the interaction between marketing and sales departments, coordinates planning and evaluation of key indicators.

Why is sales management necessary?

Sales management performs several critically important functions, including:

  • Closing deals: The main task of sales managers is to sell goods or services with minimal costs to the company.
  • Customer retention: Obtaining repeat purchases from existing customers is five times cheaper than attracting new ones.
  • Sales optimization: Systematizing interactions with customers through standards, regulations, and training for new employees.
  • Performance tracking: Continuous monitoring and analysis of indicators to quickly adapt to market changes.
  • Business growth: Effective sales management contributes to increased profits and higher customer satisfaction levels.

How is sales managed?

Sales management specialists constantly analyze various data about customers, market situations, and financial indicators. The main analysis tools include:

  1. Sales dynamics: Monitored monthly, quarterly, and annually to identify trends of growth or decline.
  2. SWOT analysis: Identifies weaknesses and opportunities for improvement.
  3. ABC and XYZ analyses: Help assess the impact of different groups of products on profit and identify external factors affecting demand.
  4. Surveying key customers: Allows identifying the needs of the most profitable customers.
  5. Sales territory analysis: Evaluates product popularity in different regions.

Choosing and managing distribution channels

Distribution channels represent the paths through which goods or services flow from the producer to the consumer. It is important to note that sales channels differ from promotion channels. The main categories of sales channels include:

  • Corporate (direct) — from producer to consumer;
  • Dealer (wholesale) — from producer to dealer, then to consumer;
  • Distributor — from producer to distributor, then to consumer;
  • Retail — from producer to retail chain.

Performance tracking

The main indicator of successful sales management is revenue. However, additional indicators are used to assess employee performance, such as:

  • Percentage of completed tasks;
  • Number of incoming and outgoing calls;
  • Number of qualified leads;
  • Response time to incoming inquiries;
  • Average conversion time;
  • Closed deals.

Sales automation

Automating processes in sales allows for improved work efficiency and increased company profits. According to HubSpot, 72% of successful companies use automation in marketing and sales. The main automation tools include:

  • CRM system: Manages customer interactions, stores information about deals, and allows for organizing employee work.
  • Virtual PBX: Enables managers to call clients without using wired connections and includes features for call recording and setting up voice menus.

It is important for sales and marketing departments to work in synergy, aligning their strategies and plans to avoid discrepancies in offers and product availability.