Sales Management Definition, Process, Strategies and Resources
Businesses that thrive execute one thing very well:
Because there are so many moving parts within an organization, the sales management process needs to be fully grasped to ensure each “aspect” of the sales effort is operating efficiently, resulting in the maximum profit for the team – and at the same time, the most benefit and best outcome for the customer. Who doesn’t like a win-win?
So, what is 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.
If your business brings in revenue, sales management should be a given. It’s crucial to boosting sales performance for any size of operation, no matter the industry.
Besides helping your company reach its sales objectives, the sales management process allows you to stay in tune with your industry as it grows, and can mean the difference between merely surviving and flourishing.
Whether you’re an experienced or new sales manager, you’ll be able to evaluate and gain visibility into your current sales force, and decide whether you should grow your team and how you should go about doing so. You’ll be equipped to pinpoint issues early on, coach people before it’s too late, and have a better overview of the tasks the team should be doing to increase its sales.
If you’re a sales rep who happened to stumble upon this guide out of curiosity, you’re already winning. You can learn how to get ahead from reading this guide. Understanding how your company’s sales process is managed will help you to become more in sync with your team, create a better relationship with your manager, and achieve better sales results yourself.
Overall, sales management will help businesses and their workers better understand results, predict future performance, and develop a sense of control.
What is there to manage?
There are three “umbrellas” to manage within the sales process:
- Sales operations
- Sales strategy
- Sales analysis
The process will vary from business to business, especially as you work your way down the line, but operations, strategy and analysis are the three key starting or focal points.
Sales operations: Building the team
This may not be a total shocker, but the sales team is the backbone of the company – they are the direct connection between the product and the customer. In other words, they matter – a lot. All in all, the sales team should feel like they are a part of the company and be equipped to move it forward, rather than viewed as money-making machines
When selecting and onboarding new talent, you should take your time to be thorough in training them and developing their skills, regardless of their experience. Why?
Salespeople shouldn’t just be great sellers, but need to be great at selling your product, and become someone customers want to work with.
Once you have a few more hands, the sales team should all be on the same page, working as individuals within a single, collaborative unit. A more systematic approach will result in fewer errors and greater achievements for the company as a whole.
Then this is where the fun really begins. You can set your team up for success by giving them high yet realistic targets, which you’ll be able to track to measure future success (you’ll learn more about this in the “Reporting” section).
You must therefore:
- Set targets
- Assign territories
- Establish goals and quotas
But the manager’s job isn’t done there. It’s also their duty to counsel the team throughout the process, make sure they are still on track, and motivate them when needed. Think about what has motivated you throughout your career – think about those things as you try to motivate your team. And don’t forget to share your disappointments and failures, to save your team time, and give them strength in the face of adversity.
All in all, the sales team should feel like they are a part of the company and be equipped to move it forward, rather than viewed as money-making machines.
Sales strategy: Defining the sales process
Once you have a team and know your targets, you might be wondering: How do you actually carry out the sales?
Every business has a sales cycle – a series of tasks that helps a company’s product reach its users – and having a sales pipeline, or sales funnel, will make that easier to maneuver.
A sales pipeline is a visual sequence of activities to achieve with each prospect, from the initial lead to the closing of the deal.
A pipeline is a salesperson’s right-hand man, as it helps them stay organized and take control of their work. After all, there are some things you cannot control – results. That’s where managing activities comes into play. If a salesperson can see their progress, or their activities, they will be motivated to do more work and achieve more.
“There are some things you cannot control – results. That’s where managing activities comes into play.”
Sales Analysis: Reporting
Reporting is what allows you to understand how your current efforts affect your company’s success and gives you insight into what you can do to increase your efforts, whether it’s hiring more salespeople, or whether the salespeople should be making more calls or doing more demos.
Report using sales metrics, or quantifiable indicators, that tell you how each aspect of your sales operations is performing and whether you are achieving your targets.
With the standard sales funnel, you should be able to measure these four metrics:
- 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
Collecting data will allow you to find your ideal customer quicker, and reach and serve them faster. A CRM tool, which you’ll learn more about in the section on technology below, will help expedite this process.
Who benefits from it?
Sales management is truly for the greater good of everyone involved in the sales cycle.
Everyone who works within and comes in contact with a company benefits from it. The more mature your sales process is – the more the manager adapts and improves it over time – the more salespeople will achieve top performance, offering the best experiences for customers.
A sales manager, someone who directs an organization’s sales team, oversees its processes, and is typically in charge of talent development and leadership, benefits by having clarity into the company’s future. As a sales manager oversees a company’s operations, an effective management process will allow them to drive their company forward. They’ll have a clearer vision of where they stand amongst their competition and know how to stay above their competition.
A salesperson, one who is usually in direct contact with a potential customer, whether in person or over the phone, is able to reach more customers and engage more, which will allow them to win more deals. As sales is tough, a salesperson will also gain more confidence when they have a smooth management process. And like the sales manager, it will give the salesperson greater visibility into their work.
The customer will inevitably have a better experience and be more inclined to benefit from your company and purchase your product or services with an effective sales management process. They may even spread the word.
With all of these parts working well together, a company can set themselves up for success, especially against their competitors.
Technology-enabled management method(s) (CRM)
To provide a clear view of your sales management process, you need a well-managed sales funnel. A sales funnel provides a clear view of the opportunities available to a sales team, accurately showing the revenue the team is going to make in the months ahead. While some people initially opt for excel spreadsheets and sticky notes – any documentation is a great start – a CRM, or customer relationship management tool, will allow you to grasp better control over your assets and be able to pinpoint and measure the things that matter most to your company’s success.
Incorporating technology in your sales strategy will ensure you get the maximum profits. Find a tool that’ll help you master your selling process – and make sure that no deal will fall through the cracks. Cloud-based CRMs in particular, help your team increase its collaboration. There are tons of popular CRMs, and choosing a CRM may be difficult, but once you analyze your company’s needs – and what’s important to you – you should be up and running in no time.
Some things to ask yourself before purchasing a CRM:
- Is it easy to learn and use?
- How can I customize it to fit my needs?
- Are there cross-platform integrations?
- Will it notify me when I need to take action?
- Does it offer good sales reporting?
- Is it mobile? Can I access it everywhere?
Technology has allowed companies to reach markets they wouldn’t have otherwise been able to reach, so it is wise to take advantage of it however you can.
Tips and tricks
Your sales process should be simple and save you time – and the more you put in, the more you get out. For example, the more deals you’re able to drive through your pipeline, the bigger they are, the better the percentage of them you are able to close, and the less time it takes to get a customer. As a result, the bigger your revenue and your profit.
For busy salespeople, apps such as Evernote, Any.do, Audible, Downcast, e-readers, Pocket, CRMs, Scanner Pro, Calendars 5 and Waze will help ease the process of managing your deals.
Also, sales managers can work with a content team to develop content marketing material, or articles that build value around their product or service, to make it easier for the salespeople to sell. After all, selling is an ongoing process. Most people don’t buy right away.
Just as some companies consider starting off with trials or testers to make the purchase more attainable, content can do the same, especially if it addresses a problem or issue that the customer has.
And it’s best to have a content team within the company; the more intimate they are with the product, the better than can bring insight to potential customers. Great content is more likely to move consumers further along the sales cycle than a salesperson alone would – in fact, great content is what often makes the introduction.
Resources: How do you get started?
If you’re interested in becoming a sales manager, or a better sales manager, it’s important that you first understand the importance of the sales management process, including the planning and goal setting that comes along with it. Planning is a vital part of taking any type of action to achieve the best results. There are endless resources that will help you get started and guide you as you build your team and as your company grows.
There are quite a few sales management jobs, but they all hold similar responsibilities – refining the sales process and making sure the company moves in a forward direction to hit its goals.
Those who manage sales can be anyone from a director of sales, district sales manager, general manager, regional sales manager, sales and marketing vice president, sales supervisor, and a vice president of sales. Some of the titles may even be interchangeable depending on the size and structure of your company.
Sales managers can come from a variety of backgrounds. Some may start off as sales representatives and work their way up, and some come from totally unrelated fields, but it’s most important that a sales manager has a strong skillset in communication and organization and other traits.
A sales manager’s salary will vary depending on the type of business and the geographical location, as with many other jobs.
According to the Bureau of Labor and Statistics, sales managers earned an average salary of $126,040 – almost double that of a sales representative – and ranked No. 2 out of the best sales and marketing jobs nationwide, in 2014.
Glassdoor, which measures salaries based on user submissions, listed the average Sales Manager salary in the US at just over $70,000, reaching close to $80,000 in New York City, as of mid-2016. Perhaps the best paid sales managers don’t report voluntarily as Glassdoor requires, but either way the best-paying cities for sales managers are New York City; Bridgeport, Connecticut; San Jose, California; Binghamton, New York; and Victoria, Texas.
Ready to learn more? There’s plenty to learn and work on.
Once you make the decision to start or improve your sales management process, you can start by:
- Reading sales management books or blogs.
- Making a Google alert for key terms such as “sales management” to stay up-to-date with the latest news in your industry.
- Experimenting with sales management software that will help you gain visibility into and stay on top of your management process.
- Reading the sales glossary below, to brush up on your sales vocabulary.
Key terms [Sales glossary]
- Activity-based selling – The theory that you can close more deals by focusing on the activities you can control, such as the number of calls or appointments made, rather than focusing on results, or making a certain amount of money in sales.
- Close/closing – Bringing a prospect to a final buying decision.
- Close ratio – Number of deals you close compared to the number of deals you have presented.
- Cold calling – Getting in contact with a potential customer with no prior contact or relationship in hopes of setting up an appointment of informing them about your product or service.
- Conversion – The act of turning a prospect into a customer.
- Customer relationship management (CRM) – A tool or software to manage your customer relationships and sales pipeline.
- Deal – An agreement to meet or take action with a prospect.
- Demo – A sales presentation of your product or service.
- Lead – Anyone who could potentially be a customer.
- Marketing – The act of promoting your product or service.
- Metrics – A collection of individual and organizational performance indicators and ratios calculated from collected data that describe a company’s historical and ongoing sales processes.
- Product – Something made to be sold to a consumer.
- Prospect – A potential customer or person who may be interested in a company’s product or service.
- Quota – A fixed share of something that a person or group is entitled to achieve or contribute to.
- Retention rate – The percentage of customers who stay.
- Revenue – A company’s income or earnings.
- Sales cycle – The series of predictable phases required to sell a product or a service. Sales cycles can vary greatly among organizations, products and services, and no one sale will be exactly the same.
- Sales force – Division of a business responsible for selling products or services.
- Sales funnel (or pipeline) – A systematic and visual approach to selling a product or service. The sales pipeline is helpful in showing you exactly where the money is in your sales process.
- Sales management – The process of developing and coordinating a sales team.
- Sales management planning – Process of thinking and organizing activities to achieve a desired goal.
- Sales management process – Steps taken to attain a company’s objectives.
- Sales management strategy – A method to bring about a desired outcome.
- Sales manager – Someone who’s responsible for managing salespeople and overseeing a company’s sales process.
- Salesperson – Someone who typically works directly with customers to inform them and sell a product while providing customer service.
- Sales reporting – The documentation of a company’s activities.
- Sales targets – Objectives or goals for a salespeople or company.
- Sales velocity – Time it takes for a new deal to close, from the initial contact.
- Service – An action performed to satisfy a customer’s need or problem.
[Editor’s Note: Sales Management Definition, Process, Strategies and Resources is intended as a collaborative, growing body of work, as opposed to a static, single-author piece. If you have comments, suggestions, and of course any corrections, please contact us via email: marketing @ pipedrive.com (no spaces).]
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