What Is Sales Management? (+ Benefits and Strategies)

Sales management definition: Sales management is the process of building a sales force, overlooking sales operations and processes, and implementing strategies to reach or exceed sales targets.

If you want to increase your revenue and grow your business, you need excellent sales management. Everyone in your organization must understand the sales management process to reap its benefits.

Not sure where to start with sales management? You’ve come to the right place. This blog post will discuss these topics:

• What is sales management?
• 3 key components of sales management
• 5 sales management strategies
• The benefits of sales management

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What is sales management?

Sales management is the process of building a sales team, overlooking sales operations and processes, and implementing strategies to reach or exceed your sales targets.

3 key components of sales management

Sales management encompasses three key components:

1. Sales operations
2. Sales process and strategy
3. Sales analysis and reporting

This table summarizes the benefits for easy reference:

Let’s go through each one:

1. Sales operations

The first key component of sales management is sales operations, which involves hiring, training, and retaining sales talent in necessary sales roles.

It starts with working with the human resources department to craft strong job descriptions and look for candidates.

Sales operations also cover managing the team members once they’re hired:

• Training: Invest in your sales team’s regular training and professional development. Training your sales team equips them with the latest product knowledge and sales techniques. It also keeps them motivated to deliver their best.
• Establishing and measuring targets: Sales team leaders can set up their teams for success by giving them ambitious yet realistic targets and assigning them to suitable territories. Track and measure your team members’ targets, so you can provide support when they need it.
• Mentoring: Once goals and targets are set, ensure your sales team gets the guidance and motivation they need.

Pro tip: Your sales operations must make your sales reps experts at selling your products and excellent collaborators that customers enjoy working with.

2. Sales process and strategy

Another critical component of sales management is a sales process that details your reps’ actions during a sales cycle to convert leads into customers.

A step-by-step sales process is like a user manual for your reps, so they have a roadmap that will guide them to advance deals through your pipeline.

Think of your sales process as your team’s playbook. It provides details about how you will sell your products or services.

3. Sales analysis and reporting

Sales analysis and reporting are essential in sales management — they give insights into your processes and strategies’ effectiveness. You can tell if you’re achieving your targets by monitoring key sales metrics, which provide valuable insights into what you must do to achieve your goals.

Do you need to hire more sales reps? Or do you need to streamline your sales process to make it easier for your prospects to convert?

If you’re falling short of your targets, identify which stages in your pipeline your prospects encounter friction. Brainstorm how you can improve your process to reduce friction. If you’re reaching your sales goals, identify which strategies contribute to your success.

Here are some of the metrics you can track in your sales analysis reports:

• Number of deals in your sales funnel: This metric gives you an idea of your sales pipeline’s health.
• Average deal size: Want to track your business growth and forecast your sales? Monitor your average deal size to identify business growth opportunities and predict sales revenue.
• Close ratio: Close ratio refers to the average percentage of deals you win. This metric gives you an idea of your reps’ effectiveness in selling, so you can identify the best practices everyone can emulate. It also tells you the training that they need in the future to improve their performance.

Pro tip: Look at the individual performance of each sales rep, so you can identify which reps need guidance to reach the team’s average.

5 sales management strategies

Now that we’ve discussed the different components of sales management, let’s discuss the different sales management strategies:

1. Create a compensation structure
2. Set goals and targets
3. Create an onboarding and growth plan for new hires
4. Create sales analysis reports
5. Regularly evaluate your sales process

Let’s go through each one:

1. Create a compensation plan

Set compensation expectations among your reps by having a plan that details their salary and commission. When setting compensation plans, provide incentives for closing deals with new and existing customers.

Providing commission for retaining customers is also important, as you can upsell and cross-sell to your existing clients. Without an incentive for nurturing existing customers, your sales reps might focus on acquiring new clients.

2. Set goals and targets

What must your team achieve within a specific time frame? Set goals and targets for the team and each team member. Ensure you communicate the team and individual goals, so everyone knows what’s expected from them.

Pro tip: Invest in sales enablement to set up your team members for success. Sales enablement provides your sales team with insightful and actionable data, tools, and content so you can effectively qualify and nurture deals, and close deals.

3. Create an onboarding and growth plan for new hires

Your sales operation process must include an onboarding and growth plan for new hires. Why? It gives your new team members a roadmap to guide them through your processes, systems, tools, and best practices.

In addition, a growth plan motivates your team members to perform and gives them a path for career growth.

4. Create sales analysis reports

Sales analysis reports are critical in sales management, as they outline crucial data that tells you how you performed during a certain period.

Communicate the relevant sales reports with your department, so they know their contribution to the overall business growth and how they can improve their performance. Some of these reports are:

• Sales pipeline report
• Conversion rate report
• Won vs. lost deals analysis report
• Customer churn report
• Average sales cycle length report
• Revenue report

The marketing department and management will also benefit from your sales reports. Do your marketing campaigns attract the right audience? How many new contracts and renewals did you win in a particular period? Sales analysis reports can answer these questions and more.

A marketing collateral and channel usage report gives your marketing team feedback on their campaigns to improve them, while a sales collateral and channel usage report offers information on the efficiency of sales channels and materials in generating conversions. Revenue reports are particularly important for management to forecast business growth.

5. Regularly evaluate your sales process

Creating a sales process is not a one-and-done activity. Your sales process must adapt to your growing business and evolve with your industry.

Regularly evaluate your sales process with your team to keep up with the changing times. Keep a live document available for your sales team, so everyone’s aligned and guided with the latest changes.

The benefits of sales management

A robust sales management system can boost your team’s productivity and guide your team to success. It provides the following benefits for your sales department:

• Higher sales revenue
• Accurate sales forecasting
• Increased customer retention
• Improved sales rep productivity
• Increased sales team member’s job satisfaction

To fully enjoy the benefits of sales management, let everyone in your organization understand your sales management process.

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Employ effective sales management strategies

Sales management is a critical piece to grow your business. To reap the benefits of effective sales management, consider teaming up with WebFX.

We’re a full-service digital marketing agency with 25+ years of experience driving results and over $6 billion revenue for our clients. Our innovative tools, MarketingCloudFX and Nutshell, equip you and your sales team with the data and insights you need for your marketing and sales strategies.

Contact us online or call us at 888-601-5359 to speak with a strategist about our digital management services!