How to create effective sales plans

We shall first look at one of the most important aspects of sales plans being personal selling. Personal selling is an important mode of communication between a company and its customers. To achieve some degree of success the company should be able to answer the following questions:

  • How important is personal selling to my business?

  • What is the role of personal selling in the marketing mix?

  • How many sales people are required to achieve sales objectives?

  • What should be the personal selling objectives?

  • How should the personal selling staff be managed?

How important is personal selling to my business?

Most organizations that do not have a proper marketing function have a sales force. However, this sales force management has been traditionally been managed well. There are several reasons including top management not appreciating the influence of the sales person. As a result the managers often underestimate the importance of the sales force

Another possible problem is that sales staffs sometimes make a distinction between sales and marketing when actually there is no great difference at all – this perception problem might become an issue in setting sales objectives.

The sales call that is made should be made effectively so as to ensure that the sales objectives are achieved. A good deal of marketing planning will go into this.

The distinction between marketing theory and sales practice is further voided when it is realized profitable sales come not from individual customers or products but on groups of customers (i.e. market segments) and on the supportive relationship of the products to each other (i.e. a carefully planned product portfolio)


What is the role of personal selling in the marketing mix?

In order to determine the precise role of personal selling in the communications mix, the company must identify the major influencers in each purchase decision and find out the information they are likely to need at the different stages of the buying process.


How many sales people are required to achieve the sales objectives?

The organization should begin its consideration of how many sales people it needs by finding out exactly how the work is allocated at present. Start by listing all the things the current sales force actually dos. These might include opening new accounts, servicing existing accounts, demonstrating new products, taking repeat orders and collecting debts.

Basically all sales force activities can be categorized under three headings. A salesperson:

  • Makes calls

  • Travels

  • Performs administrative functions

It is best to arrive at a breakdown of how a typical salesperson spends the time based on the headings shown above.


What should be the personal selling objectives?

Based on practical work routine of a salesperson - the actual time available for sales is strictly limited - in this situation the company should know exactly what it wants the sales force to achieve.

Quantitative Objectives

Principal qualitative objectives are as follows:

  • How much to sell - the value of unit sales volume

  • What to sell - the mix of product lines to sell

  • Where to sell - which markets to sell to so as to achieve marketing objectives

  • Desired profit contribution - where relevant

  • Selling costs - in compensation, expenses, supervision and so on

There are many other types of quantitative objectives which can be set for the sales force:

  • Number of point-of-sales displays

  • Numbers of letter to prospects

  • Number of telephone call to prospects

  • Number of trade meetings held

  • Use of sales aides in presentations

  • Number of service calls made

  • Number of customer complaints

  • Safety record

  • Collections made

  • Training meetings conducted

Qualitative objectives

Qualitative objectives have been a source of problems if measures such as 'good performance' 'enthusiasm' and loyalty are used since these are very difficult to measure. In seeking to measure qualitative performance managers resort to highly subjective interpretations.

However, managers can set and measure qualitative objectives which actually relate to the performance of the sales force on the job. It is possible to measure the person's knowledge of the product and how it is used in sales performance. This can be seen how it is used to overcome objections during sales interviews.


How should the personal selling staff be managed?

If a sales managers job is to ensure high performance of the sales force and if performance is a function of incentives minus disincentives, then the more the disincentives can be reduced and incentives increased the better will be the performance.

It has been shown that sales force motivation increases when the sales people have a sense of doing a worthwhile job. In other words the desire for praise and recognition, the avoidance of boredom and monotony, the enhancement of self-image, freedom from fear and worry.

It should also be noted that remuneration should be a important part of of motivation. This does not mean paying the most amount of money although the company will have to have a considerable remuneration package to retain staff. In drawing up a remuneration plan, this would normally include a basic salary plus some element for special effort, such as a bonus or commission the following should be considered:

  • To attract and keep effective sales people
  • To remain competitive
  • To reward sales people in accordance with their individual performance
  • To provide a guaranteed income plus a orderly individual growth rate
  • To generate individual sales initiative
  • To encourage teamwork
  • To encourage the performance of essential non-selling tasks
  • To ensure that management can fairly administer and adjust compensation levels as a means of achieving sales objectives

A key concept in sales force motivation is that the individual salesperson will exert more effort if these are led to concentrate on:

  1. Their expectations of accomplishing their sales objectives
  2. The personal benefits derived from accomplishing those objectives

The motivational functions of the sales manager consists of increasing personal benefits to sales people for work goal attainment, making the path to these pay-offs easier.


Preparing the sales plan

No sales plan will be identical to another. However certain general guidelines can be given and they are set out in the table below:

Task The standard How to set the standard Performance measurement What to check
1. To achieve personal sales targets Sales target per period of time for individual groups and or products Analysis of territorial potential, individual customers potential. Discussion and agreement between salesperson and manager. Comparison of individual salesperson's product sales against targets Significant shortfall between target and achievement over meaningful period of time
2. To sell the required range and quantity to individual customers Achievement of specified range and quantity of sales to a particular customer or group of customers within a time period Analysis of individual customer record of potential and present sales. Discussion and agreement between salesperson and manager. Scrutiny of individual customer records. Observation of selling in the field. Failure to achieve agreed objectives. Complacency within range of sales made to individual customers.
3. To plan journeys and call frequencies to achieve minimal practicable selling cost To achieve appropriate call frequency on individual customers. Number of live customer calls during a given time period Analysis of individual customers potential. Analysis of order/call ratios. Discussion and agreement between salesperson and manager. Scrutiny of individual customer records. Analysis of order/ call ratio. Examination of call reports. High ratio of calls to an individual customer relative to that customers yield. Shortfall on agreed total number of calls made over an agreed period of time.
4. To acquire new customers Number of prospect calls during a time period. Selling new products to existing customers. Identify total number of potential and actual customers that could produce results. Identify opportunity areas for prospecting. Examination of call reports, records of new accounts opened, ratio of existing to potential customers. Shortfall in number of prospect call from agreed standard. Low ratio of existing to potential customers.
5. To make a sales approach of the required quality To exercise the necessary skills and techniques required to achieve the identified objective. Continuous use of sales material. Standard to be agreed in discussion between manager and salesperson related to company standards. Regular observations of field selling using a systematic analysis of performance in each stage of the sales approach. Failure to identify objectives of each stage of sales approach, identify specific areas of skill weakness, use of support material.


All companies set themselves overall objectives, which in turn imply the development of specific marketing objectives. In this article we have discussed personal selling in the context of overall marketing activity.

The benefit to sales force management of following our approach can be summarized as follows:

  1.  Co-ordination of corporate and marketing objectives with actual sales effort.
  2. Establishment of a circular relationship between corporate objectives and customer wants.
  3. Improvement of sales effectiveness through an understanding of the corporate and marketing implications of sales decisions.

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