Sales Management Analysis

1.0) Introduction

This report analyses sales management issues that need addressing and makes recommendations for improvements.

2.0) Company Structure

2.1) Problems

There is inconsistency in relation to region sizes and the number of sales representatives serving the customers. Region boundaries are not clearly defined. A geographical structure operates among field sales employees, however no structure operates in the sales office preventing support been provided to field salespeople, customers receive inconsistent and inaccurate information, contributing to loss of orders if quotations are not efficiently handled internally.

Sales need to be increased to increase profits, a more effective structure would enable product knowledge and customer service to be improved, in turn helping improve sales.

Geographical structure requires salespeople to sell a range of products preventing product specialisation. Increased competition in Europe calls for specialist technical selling expertise, which is not established within current structure.

2.2) Solutions

2.21) Product Structure: allows product specialisation;

Advantages

* In-depth knowledge of product applications making sales easier,

* Increased confidence and ability to sell through knowing how to meet customer needs.

Disadvantages

* Multiple salespeople required to serve customers who purchase multiple products, causing customer frustration.

* Lack of consistency may cause loss of sales especially if the competition can provide the whole package through one salesperson.

2.22) Industry/Customer

An industry/customer structure entails organising salespeople to sell to different industries/types of client.

Client's needs are becoming more complex creating a greater need to offer a whole package solution.

Advantages

* Development of specialist knowledge of the industry/clients needs and product applications.

* Salespeople have the ability to compile a complete package.

Disadvantages

* Confidentiality is essential; salespeople cannot disclose information to other clients between whom competition occurs.

* Performance based on industry buoyancy; effecting perceived equity.

2.23) Key Account Management

Involves identifying clients with high-sales potential and providing them with "special treatment" to satisfy complex needs. Aiming to be the preferred supplier.

Advantages

* Develops long-term relationships encouraging loyalty through excellent customer service-going beyond what is expected.

* Allows penetration of the DMU.

* Push and pull buying opportunities can be created/identified to increase sales.

Disadvantages

* Neglect of smaller accounts

* Effect on motivation of regular salespeople

* Pressure on margins-reduce profit levels

2.24) Number of staff required

The workload approach allows the number of salespeople required to be calculated based on the number of customers and how many visits they require per year. 15 salespeople would be required to make the required number of visits to each client.

2.3) Proposal

It is recommended a customer/industry structure combined with Key Account Management should be implemented. A product structure would not provide a consistent sales process; orders may be lost due to frustration and lack of knowledge of the product range.

A customer structure allows salespeople to specialise in the needs of the industry/customer, knowing all products and applications enabling consistent and complete service to be provided.

Internal sales staff will comply with this structure to ensure field sales are supported, 2 sales people will support 15 field sales employees 3 in each industry. Industries will have Industry Manager. This will involve making 15 redundancies.

Customers who spend over Ј1million pa will have Key accounts. Allowing relationships to develop encouraging sales. This would be extremely beneficial since 20 clients spend over Ј1million per annum. KAM could increase this as clients find new uses for current products or a need for another product.

2.4) Outcome

A more efficient structure allowing customer needs to be satisfied through more knowledgeable and confident staff, leading to improved and consistent customer service, which in turn should increase sales and customer loyalty. The introduction of KAM will help increase sales and provide a stable income for the company.

Internal sales better placed to provide consistent support to field-sales increasing efficiency and customer service.

3.0) Sales Reporting

3.1) Problem

Manual-reporting lead to variances in the quality and content of reports, leading to internal and field staff lacking customer information, affecting service quality.

Time may be used ineffectively if salespeople plan their own visits/activities. The proposed structure requires efficient planning of daily activities.

Reporting is a time-consuming non-earning activity which, salespeople are reluctant to complete especially when paid on commission.

Benefits of Accurate Reporting

* Allows the market and customer's past/future requirements to be recorded monitored and anticipated.

* Trends can be identified and exploited.

* Efficient management of resources.