Sales Management - Meaning, Importance, Process & Example

Published by MBA Skool Team, Last Updated: July 03, 2022

What is Sales Management?

Sales management is the overall process of managing the sales operations including onboarding of sales team along with managing their sales targets through proper planning, coordination of sales activities which is often managed by a hierarchy of sales persons. It is a business discipline which is management of a firm’s sales operations and is focused on practical applications of techniques used in sales. This is a crucial aspect of the business as net sales of products and services draw profit of the business. Sales manager is hired to look after the sales and to manage them.

Sales Management is about coordinating across all the sales efforts in the company to make sure to achieve sales targets, sales promotion activities etc. 

Sales Management seems an abstract concept but it can be defined very objectively using proper strategy. Sales management should be well integrated with marketing strategy as well as distribution strategy of the company.

Importance of Sales Management

Sales Management is the most crucial and determining factor in any business enterprise along with marketing. It is important to meet competition and to make efficient and economic distribution system to reduce costs. It is also important when new product to be launched and when distribution costs to be reduced. It is attainment of sales in an efficient and effective manner and all the activities involved in sales are managed. Sales Management’s ultimate goal is to attain sales objectives of company.

Sales department of a company is part of the main business value chain and makes sure that the product/service made by the company is sold and convert to revenue. Now for a big company, sales offices can be spread across different cities along with sales personnel. Sales management proves to be very beneficial is such cases as it leads to accountability of the sales across geographies.

Process of Sales Management

Sales Management process consists of all the steps required to manage sales and related activities effectively in a company or an organization.

The process steps would be:

1. Hiring and Managing sales personnel

Sales management is incomplete without sales force. Sales team is required to run the sales operations, getting orders, selling products and services. The first and foremost step is to make sure you have the right people and they are motivated enough to make the required sales.

There should be proper roles and responsibilities defined for different sales personnel. Sales managers should also be hired who can properly manage the day to day working of the team.

2. Setting targets for each sales professional

In sales, setting targets and quota are very important. The sales targets are aligned with overall forecast and strategy of the company.

Even though sales team is doing their best, targets give a realistic picture to the objectives of the company and pushed the team to meet them in order to grow as a team and company.

3. Evaluating the targets achieved by the sales force

Just setting the targets is not enough, they need to monitored and evaluated. Monthly, quarterly, yearly evaluations should be done to see how the team has been performing. If the targets are not being met, there has to be correction done in terms of targets, efforts or product.

Regular evaluation is the key to successful sales management. 

4. Reporting the sales achieved back to the company

Sales reporting is as important as any other step in the sales management process. Reports not only show the overall picture to mid and senior management but also serve as records which can be referred to in the future. As in the evaluation step, reporting should also be done regularly e.g. monthly reports or quarterly reports.

5. Forecasting future sales targets for dollar value and sales force for next sales cycle

In addition to the current performance and targets, focus should also be on the future. Sales managers need to make sure that future targets are also being prepared as per the market demand and forecasts available.

Sales Management

Sales Management Activities

Sales Management involves various activities like-

1. Formulation of sales strategies like account management policies, sales force compensation policies, sales revenue forecasts, and sales plan

2. Implementation of those strategies

3. Sales Research, Price fixation, Establishing sales territories and co-ordination of sales

4. Sales techniques required

5. Hiring staff, setting goals, regular monitoring

Example of Sales Management

Let us say that there is a company ABC which deals in air conditioning in offices. They need a proper sales team to sell and manage the sales of the air conditioning. The product and services would include the overall AC Units, maintenance, service, replacement and warranty.

The company needs to hire the right people who have the experience of knowledge of the AC industry. There can be people from different industry as well but then proper training program needs to exist so that the team knows everything which is required to understand customer needs and offer solutions. 

Now the next step is to make sure that everyone understands what is to be sold and what are various options for the same. After this the sales targets for each product category need to be set. e.g. 5 new customers have to be acquired every quarter and 10 new services offered to existing customers. 

Based on the sales performance, regular review and evaluation has to be done with proper reporting.

Hence, this concludes the definition of Sales Management along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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