Sales management: How prioritizing people can sell product

It's never been harder to be a seller or a sales manager. The whole world of the sales organization and sales management — already changing before the pandemic — is being transformed. In fact, many of the trends affecting the sales function have accelerated.

Why is the old template for successful sales no longer applicable? New pressures that reflect a changing environment for sales reps and other marketing and sales team members. Among those pressures: 

• High pressure to hit quotas coming off a year when many of even the best sales representatives had to scale back sales targets. 
• Little time to perform — a 2018 article in Forbes reported that salespeople spend less than a third of their time actually selling or building the customer relationship as other sales activities such as prospecting through social media and learning about new products and tools consume more time.   
• Limited guidance from above on effective sales management — within an account or across a region — beyond the sales management tools and CRM. 

Let's take a look at what modern sales management is and how their job descriptions have changed in recent years.

What is sales management?

Sales management is the process of optimizing a company’s sales force to effectively utilize available resources to close deals. It’s absolutely essential for any company that relies on sales to drive revenue — which is most of them. Sales management can be broken down into three main areas: sales operations, sales strategy, and sales analysis. 

According to the American Marketing Association (AMA), sales management is “the planning, direction, and control of personal selling including recruiting, selecting, equipping, assigning, routing, supervising, paying, and motivating as these tasks apply to personal sales force.” These day-to-day tasks usually fall to a sales manager. Sales managers work with marketing and sales teams to create a sales strategy in alignment with the organization’s growth and revenue goals. 

Sales management general functions

A sales manager’s role will vary depending on the size of the organization, the needs of the team, and the size of other, related departments like marketing and sales enablement. However, a sales manager’s role typically includes:

• Recruiting the right people
• Defining the sales territories
• Preparing a sales plan
• Pricing policy and price fixing
• After sales service for new customers
• Defining remuneration and reward system for the sales force
• Putting together sales management systems
• ​Automation of certain tasks and resources in the sales cycle
• ​Reviewing sales metrics on a daily basis and determining key performance indicators (KPIs)
• ​Facilitating training programs for the sales department

What is the sales managing process?

The sales management process is the overall strategy that helps inform and prioritize day-to-day management tasks. Depending on the size of the company, one or more departments may exist to manage each of these priorities — or they could all fall to one sales manager. The critical functions of the sales management process fall into three areas:

Sales operations

Sales operations entails everything that involves your sales team and the daily logistics of how they do what they do. Operations include all of the human resources tasks — like hiring, onboarding, training, assigning territories, and setting (and adjusting) goals. It includes both strategy and tactics — both setting bigger goals and enabling the step-by-step actions to see them happen.

Sales management strategy

Once sales goals have been set, the next step is to design a strategy that helps you meet them. Sales managers map out and create a sales funnel, which outlines each part of the customer journey. Strategy often overlaps with marketing, as it helps you define your target market and how to best connect with your ideal customer.

Sales analysis

An important part of a sales manager’s role is to follow the metrics. In order to make sure your team is efficient and on track to achieve their goals, sales managers study team results as well the number of open deals and leads in the sales pipeline. Managers also need to be proficient at sales forecasting. Having a good handle on historical sales data will help the manager organize sales efforts and appropriate targets for growth.

Sales management objectives

The first, most obvious measure of a sales team’s success are the metrics. Companies rely on sales teams to generate revenue and explain their offerings to your customers. Sales managers analyze these numbers to determine whether they have the right sales talent in place, whether their sales training is working, their growth is sustainable, and to determine the needs of the market.

Top-line revenue, gross margin and expenses are all influenced by the sales manager. However, it’s not just the bottom line that’s impacted by sales management. Relationships with sales managers is a hidden fact in the well-being, retention, and success of the team. Data from McKinsey says that relationships with sales managers are the strongest predicting factor in employee job satisfaction. However, 75% of sales reps feel that their relationships with their managers are the most stressful part of their jobs.

While high performing sales leaders are often the obvious choice for sales managers, becoming a leader takes far more than putting up good numbers. In fact, only one in every six leaders is a good fit for sales management, with organizations choosing the wrong fit for management positions about 82% of the time. Leaders have to have a mix of both hard and soft skills to be successful sales leaders. That means focusing on underdeveloped, underutilized, but critical skills — like sales enablement, communication, empathy, and coaching. Companies where sales managers spend more than 50% of their time coaching are 1.4x more likely to be leaders in their industries.

Although most sales organizations have similar objectives, the industry and business model will affect which metrics are most relevant to track toward sales management objectives. For example, sales management in a growing SaaS (software-as-a-service) company might focus on lead velocity rates, conversion rates, and monthly recurring revenue as an indicator of the health of their sales funnel. They might track quota participation and sales activities to judge the health of their sales team. 

A more traditional company might focus more on win rate, average deal size, and sales expense ratio.

Sales managers are also responsible for:

• Increase sales volume
• Sustained profits
• Organization growth
• Market leadership
• Converting prospects to customers
• Compliment marketing activities

Investing in the development of sales managers translates into a 19.6% increase in revenue attainment. However, as outsized as the results of developing sales managers are, so are the impacts of neglecting this area of your business. Each underperforming sales manager costs an organization approximately $3.5 million.

Bottom line

Sales management is more than just the administration of the people who sell a company’s product line. Companies who hold such a narrow view of the role of sales managers are missing out on the most impactful long term investment they can make in their organization’s success. Taking care of the people who take care of the bottom line is a smart way to improve morale as well as revenue.

At BetterUp we believe that while tools, training, and content are important elements to enabling the field, companies must also prioritize investment in the mindsets and behaviors that impact sales performance for individual contributors and sales team leaders.