Sales management entails numerous objectives which are executed by sales managers. There are mainly three such objectives
- Sales Volume
- Contribution to profits
- Continuous Growth
The sales executives in this case are the ones who help implement these objectives. However it is the top management who has to outline the strategies to achieve these objectives of sales management. The top management should provide products which are socially responsible and are marketed in a manner which meets customers expectations and does not break it. Thus sales management involves a strong interaction between Sales, marketing and Top management.
Let us delve deeper into the 3 main objectives of sales management
Sales volume – Achieving sales volume is the first objective of Sales. The word “volume” is critical because whenever a product sales start, the market is supposed to be a virgin market. Thus there needs to be optimum penetration so that the product reaches all corners of the region targeted. Ultimately, penetration levels can be decided on the basis of sales volume achieved.
Contribution to profit – Sales brings turnover for the company and this turnover results in profits. Naturally, sales has a major contribution to profit and it is categorized as a profit function in several organizations. But there is one more aspect to the contribution of profit by sales.
The objective of sales management is to sell the product at the optimum price. Some companies might target a premium pricing for a product to make it premium in the market. But if the sales team drops the price, then the objectives are not being met and the profit is dropping. This has to be kept in check by seniors as price drops directly affect the margin of the product.
Continuous growth – A company cannot remain stagnant. There are salaries to be paid, costs have been incurred and there are shareholders to be answered. So a company cannot survive without continuous growth. If there is no innovation at the product level or at the company level, then the company has to be blamed. But if the products are good, and still the penetration is not happening, then it is the fault of sales manager and sales executives.
It is the job of marketing to take feedback and bring new products in the market. But if the sales team does not provide the appropriate feedback of “Why the product is not selling”, then growth becomes impossible. This is why, more penetration and more growth is in the hand of sales people.
Sales Management and financial results
Financial Results are another objective of sales management and are closely related and therefore sales management has financial implications as well.
Sales – Cost of Sales = Gross Profit
Gross Margin – Expenses = Net profit.
Thus the variation in Sales will directly affect the Net profit of a company. Hence maintaining and managing sales is important to keep the product / service / organization financially viable.
The Objectives of sales are therefore decided on the basis of where the organization stands and where it wants to reach. It is a collaborated effort from the top management along with the marketing managers and sales managers to provide with a targeted estimate.