Advanced Sales

Management Handbook
and Cases

Advanced Sales Management Handbook and Cases: Analytical, Applied, and Relevant
will fill the need in the market for a solid case work, role play, and activity book. It has
been written by sales teaching professionals and sales executives. The life experiences of
professionals with varied experiences will provide students with a solid foundation for
learning. This will give college professors from around the world a better opportunity to
ensure quality of learning. The book is intended to be supplemental to any other sales
management text on the market, but could be used alone in an advanced sales manage-
ment or marketing analytics course in which the students already have the base theoreti-
cal knowledge.

Dr. Linda M. Orr is an Associate Professor of Marketing and the Director of the Fisher
Institute for Professional Selling at the University of Akron. She is a co-editor of two
books, Direct Marketing in Action: Cutting Edge Strategies for Finding and Keeping your
Best Customers, Finalist for the American Marketing Association’s Berry Book Prize for
the Best Book in Marketing, and Marketing in the 21st Century: Volume 3: Company and
Customer Relations.
 Advanced Sales
Management
Handbook and Cases
Analytical, Applied, and Relevant

Edited by
Linda M. Orr
University of Akron
First published 2012
by Routledge
711 Third Avenue, New York, NY 10017
Simultaneously published in the UK
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2012 Taylor & Francis
The right of the editor to be identified as the author of the editorial material, and of the authors for their individual
chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for
identification and explanation without intent to infringe.
Library of Congress Cataloging in Publication Data
Orr, Linda M., 1975-
 Advanced sales management handbook and cases : analytical, applied, and relevant / Linda M. Orr.
p. cm.
Includes index.
1. Sales management. 2. Sales management–Case studies. I. Title.
HF5438.4.O77 2011
658.8'1–dc22
2011008077
ISBN: 978-0-415-88651-2 (hbk)
ISBN: 978-0-415-88652-9 (pbk)
ISBN: 978-0-203-80528-2 (ebk)

Typeset in Minion
by Wearset Ltd, Boldon, Tyne and Wear
Printed and bound in the United States of America on acid-­free paper by Walsworth Publishing Company, Marceline,
MO.
 CONTENTS

List of Figures, Exhibits, and Tables ix

List of Contributors xii

Preface xvi

Chapter 1 Introduction to Sales Management 1

What Is Sales Management and How Does It Relate to Other
Aspects of Marketing? 1
The Complexities of Sales Management Today 3
Sales Management Trends 4
Changing Corporate Cultures 5
Changing Customers 6
Changing Needs of Sales Managers 7
Aspects of Effective Sales Management 9
Case 1.1: The Low Price Gets the Job! 13
Case 1.2: The Rise of the Chief Pricing Officer 16
Case 1.3: High Turnover in High Fashion 18

Chapter 2 Review of Professional Selling 21

Types of Selling: Moving towards Selling Models of Today 21
The Sales Process 23
Prospecting and Qualifying 24
Research and Planning 25
Approach 25
Needs Discovery 26
Linking Solutions to Needs: The Presentation 27
vi · Contents
Handling Concerns 28
Establishing Commitment 30
Adding Value and Follow-­Up 31
Concluding Remarks on the Sales Process 31
Case 2.1: Trip Report for Prince Corporation, November 13–16 32
Case 2.2: SolNow Sales Training Results: What’s a Sales
Manager to Do? 34
Case 2.3: Avalon Personal Care Sales Call Role Play 40

Chapter 3 Changing Buyer Needs and the Effect on Sales Management 44

Customer Needs for Greater Salesperson Knowledge 45
Customer Needs for Better Communication 45
Customer Needs for Customer-­Focused Products 46
Case 3.1: Smith & Alvarez: Selling in an Industry with Diverse
and Demanding Buyers 47
Case 3.2: Parker Pottery and Challenges with Reverse Logistics 51
Case 3.3: Staying Out of the Distribution Trap 53

Chapter 4 Ethical and Legal Issues in Sales Management 56

The Development of Moral Reasoning 57
Creating an Ethical Climate 58
Case 4.1: Sexual Harassment in the Pharmaceutical Industry 58
Case 4.2: Troubles with Alcoholism 60
Case 4.3: Ethical Behavior at Limited Supply, Inc. 61

Chapter 5 Sales Force Technology 65

An Initial Perspective on Sales Technology: What Is It? 66
The Business Challenge: Why Invest in Sales Technology? 67
Reasons to Encourage the Use of Sales Force Automation 69
Sales Force Automation Failures 70
Assigned Responsibilities for SFA Vary 70
The Importance of Communicating the Value of SFA to
Sales 70
SFA Effectiveness Can Be Hampered by Technology Itself 71
SFA Training Is Lacking 71
Organizational Goals for SFA Differ 71
Emerging Sales Technologies: Looking Forward towards Greater
Productivity 71
Case 5.1: Nationwide: Delivering an On Your Side® Experience 72
Case 5.2: Alexander Technical Resources 77
 Contents · vii
Chapter 6 Sales Strategy, Organizational Integration, and Sales Processes 81
The Components and Benefits of Strategy Planning 81
Strategic Organizational Integration 83
Formal Sales Processes 84
Steps to Create Sales Processes 84
Case 6.1: Halloway Corporation and the Reactive Manager 86
Case 6.2: Successful Staffing, LLC: Working with an
Underperforming Salesperson 88
Case 6.3: Sales Processes at Bruno Builders 89

Chapter 7 Sales Forecasting, Quota Setting, and Budgeting 94

Qualitative Forecasting Techniques 96
Quantitative Forecasting Methods 99
Setting Quotas 104
Step 1: Establish Parameters for Developing Quotas 105
Step 2: Add a Growth Expectation 105
Step 3: Adapt the Quotas to Each Sales Rep 105
Step 4: Get Buy-­In from the Sales Team 106
Step 5: Adapt Quotas to Market Realities 107
Establishing Sales Budgets 107
Case 7.1: Forecasting at Snake River Industrial 108
Case 7.2: Fun Spirit, LLC: Forecasting and Budgeting 112
Case 7.3: Setting Quotas at Havannah Polymer Solutions 118

Chapter 8 Territory Design and Customer Organization 121

Organizing Customers and Markets 121
Single-­Factor Models 122
Portfolio Models 124
Decision Models 124
Other Factors to Consider 124
Understand the Sales Cycle 126
Workload Analysis 126
Designing Territories 128
Signs Indicating the Need for Territorial Revisions 129
Outsourcing the Sales Force 130
Case 8.1A: What is the Most Effective Sales Structure for Future
Growth? 132
Case 8.1B: Is Underperformance because the Territory Can’t
Give Up the Number or the Rep Is a Poor Talent? 133
Case 8.2: Bill’s Restaurant Supply 134
Case 8.3: Play At Home: Restructuring Customer Strategies 137
Case 8.4: Allegheny Steel and James Douglas Industries 138
viii · Contents
Chapter 9 Recruitment, Selection, and Continual Improvement of the
   Workforce 144
Challenges of Hiring Today 144
The Costs of a Bad Hire 145
Strategic Recruitment and Selection 146
Continual Improvement through Training and Development 149
Unfortunate Facts about Current Training 149
Steps in Good Training 151
Continual Accounting and Evaluation of Training 153
Case 9.1: Down Home Molding, LLC 153
Case 9.2: Pre-­hire Sales Representative Testing at Tremlon Tool 156
Case 9.3: Training and Employee Development 157

Chapter 10 Sales Leadership, Motivation, and Compensation 160

Leadership 160
Motivation and Compensation 162
Types of Rewards 163
Does Money Motivate People? 165
How to Set Up a Compensation Plan 166
Current Trends in Compensation 167
Case 10.1: Leadership and Compensation at National Finance
Masters 167
Case 10.2: Leadership Issues at MedPlus 170
Case 10.3: Communications Specialists 171

Chapter 11 Comprehensive Cases 176

Case 11.1: MedEx Medical Services 176
Case 11.2: Mary’s Beauty in an Emerging Market 179
Case 11.3: People Connections, LLC 182
Case 11.4: Eagle Home Products 191

Index 195
 FIGURES, EXHIBITS, AND TABLES

FIGURES
1.1 The Relationship between Marketing and Selling 2
1.2 Hierarchy of Sales Management Positions 3
1.3 Aspects of Effective Sales Management 10
2.1 Classifications of Professional Selling Approaches 22
2.2 The Generic Sales Process 23
2.3 The Value Equation 26
2.4 SolNow’s Current Organizational Hierarchy 39
5.1 Closed-­Loop Approach to Customer-­Targeted Marketing 74
6.1 Sales Processes’ Impact on Sales Performance 85
6.2 Ineffective and Effective Sales Processes 86
6.3 Bruno’s Business Development Process 90
6.4 Bruno’s Sales Process Blueprint 91
7.1 Sample Time Series Plot, Plus Trend, with Best-­Fit Line and Different
Smoothings 100
7.2 Sample Linear Regression 101
7.3 Industry Usage of Forecasting Methods 103
7.4 Forecasting Principles 104
7.5 Types of Quotas 106
8.1 Steps in the Organizing of Territories and Customers 122
8.2 Methods of Organizing Customers 122
8.3 Simple CLV Calculation Worksheet 126
8.4 Sample Sales Funnel 127
8.5 TerrAlign 129
8.6 Route Solutions 130
8.7 Comparison of Old Business Mix with New Business Mix for James
Douglas and Allegheny Steel 140
9.1 How Pleased Are Companies with Their Hiring Practices? 146
x · Figures, Exhibits, and Tables
9.2 The Recruitment Process 147
9.3 Developing a Training Program 151
9.4 New Hire Selection Examination Results: Sherry Quartz 156
10.1 Factors Impacting Leadership Effectiveness 161
10.2 Motivational Rewards 163
10.3 Impact of Incentive Plans on Sales Rep Behavior 164
10.4 Salesperson’s Career Cycle 166
10.5 National Finance Masters: New Customer Sales in Region 16, 2010 168
10.6 Communications Specialists Sales Data, North Main Store 173
10.7 Communications Specialists Sales Data, Elm Street Store 173
10.8 Communications Specialists Sales Data, Broadway Store 174
10.9 Communications Specialists Sales Data, South Main Store 174
10.10 Communications Specialists Sales Data, Broad Street Store 174
11.1 Memo from Brian Butch to Peter Marons 177
11.2 People Connections: Department Responsibilities 184
11.3 Revenue Input Rate/New Opportunities: Dave Brinkman’s Territory 185
11.4 Selling Cycle Time Comparison Chart 187
11.5 Selling Fallout Percentage Chart 187

EXHIBIT
2.1 The Trainer’s Written Feedback 38

TABLES
1.1 Changes in Buyers 5
1.2 Yesterday’s vs. Today’s Sales Managers 7
1.3 Sales Rep Total Sales and Compensation for Canadian Chemical 14
1.4 Sales by Account Category 15
1.5 Product Mix Sold by Sales Reps 15
1.6 Selling Expenses 16
2.1 Methods of Prospecting (Listen, Acknowledge, Assess, Respond,
Confirm) Analysis 24
2.2 Research Activity 25
2.3 The LAARC Method 29
2.4 Role Play Evaluation for Chris Lyle 35
2.5 Role Play Evaluation for John Perry 36
2.6 Role Play Evaluation for Beth Sanders 37
2.7 Role Play Evaluation for Nancy Bennett 38
2.8 Role Play Evaluation for Sue Reed 39
3.1 Smith & Alvarez Financial Information by Customer Group 48
3.2 Reverse Logistics Rates 52
3.3 Biggest Reasons for Parker Pottery’s Returns 53
4.1 Common Breaches of Ethics in Sales 57
4.2 Common Misuses of Sales Force Automation 63
5.1 Largest CRM Vendors, 2006–2008 67
5.2 Financial Data for Alexander Technical Resources (ATR) 79
 Figures, Exhibits, and Tables · xi
5.3 Implementation Costs of a CRM Package for ATR 79
6.1 Year-­to-Date Halloway Financial Information 87
6.2 Year-­to-Date Garner Financial Information 87
6.3 Hit Rate Example 92
7.1 Impact of Erroneous Forecasts 95
7.2 Strengths and Weaknesses of Different Forecasting Methods 97–98
7.3 Sample Moving Averages 100
7.4 Sample Weighted Average 101
7.5 Sample Decomposition 102
7.6 Sample Results of Other Forecasting Methods 103
7.7 Sample Sales Budget and Sales Expenses Categories 108
7.8 Snake River Industrial Sales History 109
7.9 Snake River Key Customer Sales History 110
7.10 Customer Survey Results: Key Factors in Purchase Decisions 111
7.11 Competitor Rankings 111
7.12 Competitor Sales Data 112
7.13 Projected Market Growth Potential 112
7.14 Number of Product SKUs Sold per Year by Fun Spirit, LLC 113
7.15 Annual Sales Data by Category 114
7.16 Promotional Budget as a Percentage of Sales 115
7.17 Sales Compensation Data 116
7.18 Sales Budget 117
7.19 Office Expenses Data 117
7.20 Havannah Polymer Solutions Sales Data 120
8.1 The Math on C Account Management 123
8.2 Classification of Selling Functions Based on Accounts 124
8.3 Sample Portfolio Model 125
8.4 Salesperson Workload Analysis 128
8.5 Strategic Product Sales for Medical Science, Inc. 133
8.6 Annual Restaurant Revenue (in Thousands) for Bill’s Restaurant
Supply 135
8.7 Customer Sales Information 136
8.8 Business Mix between James Douglas and Allegheny Steel 141
8.9 The Effect of Losing Product 2 Sales Owing to the Inability to Produce
the Product because of the Equipment Failure 142
9.1 Hiring Methods and their Accuracy Rates 147
10.1 National Finance Masters Region 16 Salesperson Data 170
11.1 MedEx Territory General Information 178
11.2 Salesperson Hours (Monthly) 179
11.3 Sales Call Information (Monthly) 179
11.4 Sales Data 180
11.5 Profitability Data 180
11.6 Sales Department Growth Objectives 183
11.7 People Connections: Year-­to-Date Performance Measurements 189
11.8 Eagle Home Products Sales Breakdown by Currency 192
11.9 Eagle Home Products Financials 193
11.10 Average Salesperson Salary 193
 CONTRIBUTORS

PRIMARY AUTHOR AND EDITOR

Linda Orr (PhD, University of Mississippi) is the Interim Director of the Fisher Institute
and an Associate Professor of Marketing at the University of Akron, Ohio. She has
taught sales and sales management for over 12 years at various institutions, including
the past 6 years at Akron. She is a co-­editor of two books, Direct Marketing in Action:
Cutting-­Edge Strategies for Finding and Keeping Your Best Customers (Praeger, 2006;
the book was a finalist for the American Marketing Association’s Berry Book Prize for
the Best Book in Marketing for 2009) and Marketing in the 21st Century, volume 3:
Company and Customer Relations (Praeger, 2007). Dr. Orr has also published in several
refereed journals, such as the Journal of the Academy of Marketing Science, the Journal
of Business Research, the Journal of Business Ethics, Psychology and Marketing, and the
Marketing Management Journal. The focus of her research, teaching, consulting, and
training is in sales, sales management, and lean sales capabilities. Additionally, Dr. Orr
served as Assistant Marketing Director for Warner Bros. Records in Nashville, Tennes-
see, and in a variety of managerial capacities in the restaurant and finance industries.

CONTRIBUTING AUTHORS
Paul Albright has been Vice President of Sales for the Euclid Chemical Company since
2001. His job function includes managing $100 million in construction project sales
throughout the nation. He is an alumnus of the University of Akron and is proud to
be a Zip! Additionally, he attended Kellogg’s Business School for advanced business
training and Colgate Garden at the University of Virginia. He enjoys participating as
a member of the Fisher Institute for Professional Selling’s Executive Advisory Board,
as well as participating as a board member for E-­City, a Cleveland-­based business
program. In his spare time, he loves to read and play golf.
Dustin Campbell currently serves as General Manager of TMG Verizon Wireless and
has held this position for the past seven years. He received his Bachelor of Science in
 Contributors · xiii
Business Administration with a concentration in marketing and sales from the Uni-
versity of Akron in 2007. At Akron, he participated in Psi Sigma Epsilon and is now
a Gamma Kappa Alum.
Andrew Coleman has been with NCR & Teradata for ten years and currently leads a
team of 21 professionals serving Teradata’s largest insurance client. In this role he
is responsible for an annual revenue objective as well as leading the development
of consulting, marketing, engineering, maintenance, and financial professionals. He
has achieved a record of 6 for 7 in Century Point Club (CPC) attainment. Outside
of Teradata, Andrew has served as a member of the board of directors for the NCR
Country Club for five years. During 2005, for the U.S. Senior Open, he served as
vice chairman of spectator services. He is currently an officer and golf committee
chairman. Andrew is also an active guest lecturer at the University of Dayton, the
University of Akron, and Asbury University. Andrew earned a bachelor’s degree in
Business Management from Asbury College in Wilmore, Kentucky and has a Mas-
ter’s in Business Administration, with a Finance concentration, from Xavier Univer-
sity in Cincinnati, Ohio.
Jason DiLauro is the founder of DiLauro Financial Services. Jason began his investment
and advisory career with Merrill Lynch in 1994. His focus is on advising and assisting
individuals and business owners with their financial planning needs. A firm believer
in strong client relationships, Jason is committed to understanding his clients’ needs,
desires, and risk tolerance prior to developing and executing a financial plan. Offering
holistic financial advice is the cornerstone of his business. Jason maintains Regulatory
License 7, 63, 65, 9 and 10. He has earned the Chartered Retirement Planning Coun-
selor Designation. Jason currently serves on the board at the University of Akron’s
Business School College of Sales and Marketing. He also serves as a liaison for the
university’s Career Center, assisting graduates find permanent employment. He is
also active in numerous local charities. An avid golfer and sportsman, Jason resides
in West Akron with his wife, Lisa, and they have two children.
Tim Haitz currently holds the position of Senior Corporate Account Executive for
YRC. YRC Worldwide Inc., a Fortune 500 company and one of the largest trans-
portation service providers in the world, is the holding company for a portfolio of
successful brands, including YRC, YRC Reimer, YRC Logistics, New Penn, Holland,
Reddaway, and Glen Moor. He received his Bachelor of Science in Business Admin-
istration with a focus on Finance from the University of Michigan.
Mark Kreighbaum is Applications Sales Manager at Oracle, a software company pro-
viding services to more than 370,000 customers. He has been with Oracle since 1994.
Previously, he worked as an account manager for MSA for seven years. He received
both his Master’s in Business Administration (with a concentration in Finance) and
his undergraduate degree in Business Administration from the University of Akron.
Outside of work, he currently serves as a board member at the Fisher Institute for
Professional Selling.
Jason Kreitz has over 15 years of experience with the Allegis Group family of
companies in recruiting, sales, and operations. He currently is a Senior Account
Executive with TEKsystems, providing IT staffing and services in the Chicago
xiv · Contributors
market. He graduated from Bradley University in Peoria, Illinois, in 1995 with a BA
degree in International Business. Jason is married and has 2-year-­old twins.
Karen Nelsen worked in the Department of Marketing at the University of Akron from
1990 through 2008, and especially enjoyed her association with the faculty in the
department. Karen co-­wrote, with Andrew Thomas, the first chapter of Direct Mar-
keting in Action (Praeger, 2006). She also edited several chapters in the book. Previ-
ous to working at the University of Akron, Karen was a newspaper editor, and has
a BS degree from Kent State University in English and Library Science. She enjoys
freelance writing and pastel painting.
Dave Orr has worked in technical sales, product development, and quality roles for
over 12 years, serving the automotive, appliance, military, toy, and aerospace indus-
tries, driving profitable growth for his employers. Dave is a certified Six Sigma
Master Black Belt from Kent State University. Dave earned his MBA from Robert
Morris University and has a BS in Plastics Engineering Technology from Penn State
University. Dave is currently working at the Step2 Company, the nation’s largest
domestic toy manufacturer, as the Director of Quality and Manufacturing Engin-
eering, in which capacity he has supported improvement efforts in the organization.
Dave worked to get ISO 9001:2008 certification for the Step2 Company in Novem-
ber 2009.
Steve Reymann recently transitioned from sales to become a director of national
accounts for Edwards Lifesciences. Prior to this position, Steve was a regional direc-
tor of sales for the Edwards Critical Care division for 5 years. Preceding this posi-
tion, he was a sales rep for 15 years with the Critical Care division, earning Hall of
Fame honors in 2003, which is the highest honor a sales rep can win at Edwards
Lifesciences. Steve graduated from the University of Akron in 1972 with a BS degree
in industrial management. He currently lives in Columbus with his wife and two
children, and his pastimes include following Akron Zips sports and coaching club
soccer.
Kate Rosen is a 2011 graduate of the University of Akron. She currently serves as the
student assistant for the Fisher Institute for Professional Selling. She is a senior
enrolled in the Sales Management and Health Care Selling programs and a member
of the 2011 National Collegiate Sales Competition team. Her accomplishments in the
Sales Management programs are recognizable by her acceptance of the 2010–2011
Outstanding Sales Student Award and Scholarship, the Thomas H. Taylor Sales
Scholarship, and the University of Akron’s National Collegiate Sales Competition
Scholarship. She is a current member of the University of Akron’s Honor College,
where she is a member of the Honors Business Group and Honors to Law Program.
In her spare time, she enjoys playing recreational soccer and currently coaches two
programs with Hudson Soccer Association.
Andrew R. Thomas is most recently co-­author of The Distribution Trap: Keeping Your
Innovations from Becoming Commodities (Praeger, 2009), winner of the American
Marketing Association’s Berry Prize for the Best Book of 2010. A New York Times
bestselling writer, Andrew is also author, co-­author, or editor of more than 15
books. His work is focused on the intersection of global business, innovation, and
 Contributors · xv
security. Andrew is Assistant Professor of International Business at the University of
Akron. A successful entrepreneur, Dr. Thomas has traveled to and conducted busi-
ness in more than 120 countries on all seven continents. He is contributing editor to
the magazine Industry Week, where he writes the “ART of Business” blog. Andrew is
Founding-­Editor-in-­Chief of the Journal of Transportation Security and a regularly
featured commentator for media outlets such as the New York Times, CNBC, the
BBC, and Fox News.
Nicholas Vaughn is a 2006 graduate of the University of Akron. He currently resides
in northern Ohio with his wife and two children. Currently, Nicholas is the Market-
ing Director for Playground World, a company that specializes in outdoor recrea-
tional equipment, where he manages all the marketing efforts of several companies
across six states. He previously worked in the marketing department for a nuclear,
aerospace, and chemical testing company, as well as having a career in the college
education field. For fun, he enjoys spending time with his family, traveling, and
trying new restaurants.
Melanie Wood of M. H. Wood Consulting LLC is a published author and featured
speaker on topics relating to consultative selling, competitive positioning, strategic
sales call approaches, profiling and targeting profitable prospects, and using sales
metrics to diagnose and drive sales performance. Melanie’s articles and interviews
have appeared in Selling Power, EXPO Magazine, Tradeshow Week, and Punto y
Blanco, a quarterly publication for the Latin American apparel industry.
 PREFACE

The current average tenure of a Vice President of Sales today is somewhere between 24
and 32 months (Baldwin, 2010). Even more disturbing is that this average has been grad-
ually getting shorter and shorter. The most common cause for this phenomenon is inef-
fective hiring: most sales managers were good sales reps who were promoted to sales
management positions. Unfortunately, the skill sets needed for a sales manager to be
successful in these times are drastically different than the skill sets required of sales
reps.
Equally disturbing is the type of material taught in university sales management
classes. It too often does not contain the appropriate material needed to train sales man-
agers in this rapidly changing world. The subject of sales management is typically taught
using a sales management textbook with vague, academic, ivory-­tower-type principles.
Likewise, the texts typically have limited case study information contained in the appen-
dices or at the end of the chapters. These case studies are often too brief and not detailed
enough to solicit extensive thought from the students. Current cases in texts do not
contain the analytical rigor that is needed from today’s sales managers.
This book fills the need in the market for a solid case work, role play, and activity
book. This book is written by practicing higher-­level sales executives across many indus-
tries. The life experiences of professionals with varied experiences provide students and
managers alike with a solid foundation for learning. The text and cases in this book are
rigorous, practical, and relevant, and draw on the skill sets needed in today’s world.

Reference
Baldwin, H. (2010, July/August). The (strange) case of the vanishing sales VP. Selling Power, pp. 34–37.
 1
INTRODUCTION TO SALES MANAGEMENT

WHAT IS SALES MANAGEMENT AND HOW DOES IT RELATE TO OTHER

ASPECTS OF MARKETING?
Sales management is a small subsection of the broader “parent” discipline of marketing
and marketing management. While the official definition of marketing has changed
throughout the years, the latest definition as of 2007 is that “Marketing is the activity, set
of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large” (American
Marketing Association, 2010). The new definition reflects a few key changes in the field
of marketing, namely that marketing is moving from a transaction orientation to a cus-
tomer relationship building orientation. Furthermore, the new American Marketing
Association definition shifts the perspective more to the customer side by focusing on
delivering value and managing customer relationships.
The duties of a marketing manager normally encompass what are typically referred to
as the “4 P’s” (see Figure 1.1). The marketing manager must understand the customers
– their buyer patterns and behaviors, as well as their wants and needs. This understand-
ing is gained by the use of research and analytics. Then, a marketing manager must
incorporate these pieces of research and findings into broader plans on how to develop
the right product and/or service offering, how to distribute it, how to price it, and how
to promote it. For the last element mentioned, the promotional element, a marketing
manager must decide the best way to communicate with the customer groups and how
to build brand awareness and loyalty. A manager has many promotional tools at their
disposal, but these generally range from mass-­market techniques all the way to very
personalized and customizable techniques. Professional selling is of course probably the
most personal of these tools.
The management of the sales force that conducts these sales activities is the responsi-
bility of the sales manager. One caveat is necessary here: none of these aforementioned
elements, whether they be 4 P elements or individual promotional mix elements, exists
in a vacuum. They all affect and interact with each other. For example, while a sales
2 · Introduction to Sales Management

Professional
selling Advertising

Public Direct
relations marketing

Promotion Sales
Price (IMC) promotion

Product Place

Figure 1.1 The relationship between marketing and selling.

manager is deciding on how to best manage their sales force, they are also concerned
with the effects of social media on their efforts.
Thus, sales management by definition has a fairly narrow scope of responsibility and
includes the planning, leading, and controlling of the selling activities of the sales man-
ager’s organization. The management tasks are usually directed around strategic plan-
ning, recruitment, selecting, training, equipping, assigning, routing, supervising, paying,
and motivating the sales force. Sales managers must continually monitor and adjust
their marketing strategies to dynamic technological, competitive, economic, legal, and
cultural factors. Likewise, they also have to consider the interests of the company’s stake-
holders, such as employees, suppliers, financial community, media, stockholders, special
interest groups, and governments. Different managers have different responsibilities
depending on where they are in the organizational hierarchy. A typical hierarchy is
depicted in Figure 1.2. Generally, the higher in the structure a manager is, the fewer sales
duties they take on and the more they are responsible for leading, strategizing, and
controlling.
However, this basic definition and description hardly covers the true duties and needs
of sales managers in today’s world. As sales situations and customers become increas-
ingly complex, a better-­trained, more analytical sales force is no longer a nice thing to
have, but a necessity. Likewise, a better-­trained, more analytical sales manager is equally
important and crucial to the success of an organization. With increased globalization,
competition, increasingly enhanced technology, and instantaneous communication,
buyers are becoming more knowledgeable and informed. They expect more from
the sales representatives calling on them. In order to meet these increased demands from
buyers, sales representatives need to have business acumen like never before, and
 Introduction to Sales Management ·3

CEO

President

Vice president of
marketing and/or
sales

National sales manager

Regional or zone sales manager

District, branch, or field sales manager

Key accounts manager

Sales and marketing representatives

Sales analyst or sales trainee

Figure 1.2 Hierarchy of sales management positions.

understand how to think and act like a consultant who is solving a business problem for
a client, not just selling a product or service.

THE COMPLEXITIES OF SALES MANAGEMENT TODAY

The following are some daunting statistics about how hard a sales manager’s job has
become. On average, 13% of a sales force delivers 80% of the revenue (Bosworth &
Holland, 2004), 47% of salespeople admit to having no clue about their customer’s
biggest concerns, and 65% of sales managers focus on building volume instead of wooing
profitable customers. Many salespeople and sales managers think price is a legitimate
objection and let price dictate their success in sales, and sometimes even go so far as to
reduce product quality.
Many of the problems that a sales manager must deal with are results of decades of
downright pitiful sales training, both at the corporate level and in universities for the
past few decades. One of the most common example clichés is “A good salesperson
could sell ice to an Eskimo,” when in reality a good salesperson could not (or would not)
sell ice to an Eskimo. Why would they? An Eskimo does not need ice! Another bad sales
principle that has made the sales manager’s job more difficult is the idea that the sales
force simply is not making enough sales calls – it’s all a numbers game – and that is why
sales are down. Even the ABCs (Always Be Closing) of sales or other trainers’ hard
4 · Introduction to Sales Management
closing techniques are still being practiced in companies today. Other salespeople were
trained to ask four fact-­finding questions then start dumping product features, utilize
memorized objection responses, or use flashy visual aids as a crutch.
These false principles have created a few generations of completely incompetent sales-
people. This, coupled with the fact that the environment and the industries are changing
so dramatically, means that a sales manager’s job is far removed from the simplistic
black-­and-white definition given previously. Today, some of the key questions a sales
manager must ask are:

• How do you differentiate yourself and position yourself as uniquely valuable?

• How do you protect your value proposition against inroads from your
competition?
• How do you manage information as working capital? How do you take and utilize
and process this information analytically?
• How do you establish credibility, awareness, and loyalty among your buyers?
• How do get your salespeople to gain and maintain access to key people? How do
you understand the key decision makers and what they want?
• How do you coach, train, and manage generation X and generation Y salespeople
and buyers? How do you apply flexible motivational skills in working with a mul-
ticultural, hybrid sales force?

Owing to the fact that the sales manager’s job has become so complex, and also because
of downright poor hiring practices, currently the average tenure of a Vice President of
Sales is 24–32 months (Baldwin, 2010). Major reasons why some sales managers may fail
to perform at higher levels include illogical selection of sales managers, inadequate sales
management training, lack of a long-­run customer relationship orientation, and insuf-
ficient blending of sales, marketing, and financial knowledge.
However, all that having been said, sales management is a wonderful career to enter.
Few jobs are more crucial to the ultimate success of a business than sales management.
Sales managers oversee the sales force – the direct income producers who determine the
financial health of their organizations. If the front line is not producing, the company is
not making money. Sales management shapes and determines nearly all the firm’s inter-
actions with customers. Sales managers are perhaps the most vital link to marketing and
sales research and analytics. They see the data firsthand and are in the best position to
shape business strategy in terms of how to please customers. In short, it is one of the
most vital careers to any organization and the economy as a whole.

SALES MANAGEMENT TRENDS

Before we begin a detailed discussion in regard to the specific details of how to make
analytical sales management decisions, it is important to cover in more detail how dras-
tically different sales management is today in comparison to sales management a few
decades ago. As briefly mentioned, the changing dynamics between buyers and sellers
are being driven by larger societal, economic, cultural, technological, and political trends
that are affecting us all. Some of these changes are the proliferation of information, the
deep recession and subsequent downsizing and reorganization of companies, the growth
of social media, the mobility of the workforce, the ease of communication, the explosion
 Introduction to Sales Management ·5
of other world economies, and the tighter government regulations in many industries
such as the toy industry and the financial industry. The overriding, most fundamental
principle that companies need to recognize now is that they must add value to the cus-
tomer’s business or they will not get the sale.

CHANGING CORPORATE CULTURES

To overcome the hurdles that exist as a result of the changing environment, companies
need to refocus their corporate culture. Creative engineers or other technical experts
who invent new products are not enough to sustain a competitive advantage. Typically,
organizations have survived on the basis of this continual flow of new products. Innova-
tion and “how to have an innovative culture” have become buzzwords in recent times.
However, all too frequently, innovations are not really needed and do not truly match
customers’ needs. A major challenge is moving a selling organization to become “cus-
tomer driven” from whatever driving force had previously dominated corporate strat-
egy. As Table 1.1 demonstrates, a change in corporate culture dictates much about how
well an organization will succeed today. Corporate managers who are rewarded for
quarterly profit, for example, have little prospect of investing the time needed to develop
“customers for life” relationships or partnerships. Grandiose products and services with
more capacity, features, or options are often just seen as overpriced. The focus must
change from product to benefit or business result.
Many new products come out simply because no one in a company understands an
organization’s mission statement. When Jeffrey Hayzlett first became Chief Marketing
Officer (CMO) of Eastman Kodak, he went around asking everyone what Kodak’s
mission statement was (J. Hayzlett, personal communication, 2010). While nobody
really gave him a good answer, most people said something along the lines of “To take
pictures?” He then realized that no one in the company knew what the real focus should
be and everyone was thinking about a product that would soon be, and now is, almost
completely dead. He led a huge turnaround of the company and got it away from being

Table 1.1 Changes in buyers

Then Now

Static, dated information Dynamic, real-­time information

Many place, time, and space barriers (limited hours) No place, time, or space barriers (open 24/7/365)
Few customer alliances or communities Many customer alliances and communities –
explosion of social networking
Few customized products Many customized products
Narrow selection of products Large selection of products
Limited price sensitivity (bonuses based on cost High price sensitivity
reductions – higher accountability)
Limited access to competitors’ offerings Instant access to competitors’ offerings
High switching costs Low switching costs
Seller initiates the offer Customers initiate the offer – detached buyer cycles
Short decisions Longer sales cycles
More time to spend with salespeople Almost no time to spend with salespeople
6 · Introduction to Sales Management
a product-­driven organization. He turned Kodak into an organization whose vision
focused around one product. This one product was one that people will run into a
burning building to save, namely their memories. He made the focus the customer and
helping the customer capture and save their memories in the best way Kodak could.
To institute these types of turnarounds, sales managers now must have a completely
different focus as compared with a sales manager just five years ago. They must be leaner
and more analytical. They must understand how important coaching is and that a
manager cannot be fully effective in coaching or developing more than four or five sales-
people. They must provide a top-­notch sales training program and matching compensa-
tion system which encourage the culture. More specific aspects of these changes and
what is causing these changes are detailed in the three sections that follow, which are
about changing customer expectations and the necessary changes that sales managers
must make.

CHANGING CUSTOMERS
As was mentioned in the introduction to this chapter, buyers and their needs have com-
pletely changed, much of the change having been caused by rapid changes in technol-
ogy. As far as the industries in which sales managers operate are concerned, they are
more competitive than ever; many are “hypercompetitive” and “saturated.” New prod-
ucts and services come out faster than ever and change more frequently. Customers
know more about price, quality, capability, reliability, and alternatives. Customers are
also more demanding: they want more information, more options, bigger discounts,
better service. In fact, the top three complaints of salespeople by B2B customers are: (1)
the salesperson is not following my company’s buying process, (2) the salesperson did
not listen to my needs, and (3) the salesperson did not bother to follow up (Iacobucci,
2009). Moreover, buying and selling cycles are detached, thus causing salespeople to face
different sales processes.
With detached sales cycles, by the time a buyer encounters a salesperson today, the
buyer has probably already educated themselves on the alternatives and begun to narrow
their choices. They have already asked other colleagues in the industry for their opinion
on their preferred supplier and, depending on the industry, have already begun to
research the product online and with social media. With the increased complexity of the
products and saturation of markets, buyers have usually amassed a long list of technical
questions that they will expect the salesperson to answer with great authority and
con­fidence. Compared to just a few years ago, buyers are more educated and more
sophisticated. Consequently, they are more demanding. Buyers expect salespeople to be
skilled and knowledgeable, and, above all, to offer value added. If salespeople cannot
demonstrate in a very brief amount of time that they can understand and resolve a
buyer’s concerns, that buyer will quickly discard them and move on to another
salesperson.
There is also more competition to give buyers more choices. With the globalization of
markets and the growth of the Internet, there is no doubt that customers can find numer-
ous choices for every product. These more demanding buyers, who have high expecta-
tions and who are also more empowered, create a selling environment that is more
challenging now than ever before. The power has clearly shifted from the seller to the
buyer. This would sound like bad news to an executive, but in actuality it is good news.