In a company, there are many coexisting functional areas that make business work properly: management, finances, administration, production/operations, quality, marketing, human resources, project management, process, logistics. In order to reach its organizational objectives, it is vital that all these areas have the same purpose and business strategy.
Next, we are going to delve into the Sales area: what is it, which are its main functions, its biggest challenges, etc.
What is the Sales Area?
The Sales area is in charge of maintaining good relationships between the company and its customers or target audience. In order to achieve this, the company appoints a sales manager who deals with important decisions based on the budget of the company and analyzes if the number of sales should increase or decrease.
The goal of the area is managing the distribution, presale, sale and after-sale of products or services as well as delivering them. Its main objective is to produce a positive financial impact on the company; this can be achieved by getting a meaningful increase in the number of sales and by better positioning of the brand.
History and evolution of the area
In the past, humans simply survived. Their source of food was hunting, fishing and gathering, so commercial exchange at that time must have been unlikely (or impossible) due to the distance between the different villages and human groups. Low population density did not encourage this activity either.
With the development of agriculture in the Neolithic period, in the second stage of the Stone Age, about 8000 and 10000 years ago, cattle breeding started as a way of assuring the supply of meat without the need for hunting. Moreover, people took advantage of the strength of draft animals.
Commercial exchange: bartering.
As humans started to accumulate production surplus, bartering emerged; it was a primitive way of exchange that allowed people to put their efforts into an easier and more natural way of farming. By doing this, they handed over a part of their products in exchange for a product of somebody else.
At that time, it was very difficult to barter successfully due to the lack of people interested in these products. At the same time, participants (not "customers" per se) did not feel interested in the quality of the products.
Afterward, new ways emerged to balance the value of the products received with those handed over. One way of exchange was based on precious metals such as gold and silver. Another way was through the use of pieces of a certain value, generally accepted by merchants. At this point, we can say that the concept of money as a commercial exchange facilitator emerged.
Among the people who stood out for their commercial development, we can mention the Phoenicians. Their commercial organization developed to such a degree that they founded commercial colonies in several places around the Mediterranean Sea. Moreover, they created merchants' associations which were fortified settlements where they stored provisions for their commercial trips.
During the Middle Ages, an emerging commercial development took place in the European countries. Before this, agricultural products were not sold but given to the feudal lord who was the implicit owner of the goods produced on his farm, in exchange for military protection for his vassals.
Eventually, demographic growth produced a migration to the urban centers and, as a result, there was a new division of labor. Craftsmen and other urban settlers who could not carry out agricultural tasks bought their food for a particular price.
The Industrial Revolution took place in the second half of the 18th century, fostering a great global economic expansion. The invention of the steam engine was the catalyst of the industry and the means of transport until the mechanized farming production.
As the sales activity was still in charge of merchants and producers, there were no commercial agents working on commission. The main goal of companies was to manufacture products on a large scale to supply bigger and bigger markets.
Both World Wars at the beginning of the 20th century, an interwar period marked by the Wall Street Crash and the Great Depression resulted in a drastic decline of the levels of consumption and prices. In the case of Europe, it lost a great part of its production due to the bombing of the Wars in its commercial areas.
Merchants, then, found out that their thriving markets were now decaying, especially in those countries that had some participation in the Wars since nobody could buy their products. For this reason, the work of selling and the commercial activity per se emerged, with goals and strategies to boost sales. This way, companies started to hire sales agents whose tasks were knowing the market, the potential customers, and promoting their products to make more sales.
A pressuring selling practice emerged in which the seller learns how to survey, presenting, negotiating, closing and handling objections.
Marketing emerged when business professionals started to research the market so that they could know and identify the tastes and preferences of consumers. Then, some concepts were developed such as Market Segmentation that can be geographical, psychographic, age socioeconomic, ethnic, gender, occupational, among others.
Nowadays, consumers have access to a lot of information that may help them to make decisions or, on the contrary, slow them down. That is why, traditional selling techniques such as the intrusive one, are no longer effective on a well-informed consumer.
Main functions of the Sales Area
The specific functions of the Sales area go beyond selling a product or service since it assumes planning roles, the execution and control of activities to improve the functioning of the area. Its functions are the following:
1. Setting goals
It sets realistic goals oriented towards growth as well as the profits of each seller and the approach to take. As a way of motivating your team, you can offer them bonuses and commissions since this type of remuneration encourages workers to get their goals quicker. Moreover, if your company has a specialized tool, it will be easier to create and share goals.
2. Planning strategies
You should know all the details of the product or service and establish its price and way of distribution so that your sales team is efficient. Sellers know customers' preferences and needs completely, so they are a great source of information. One of the most used strategies is suggesting launchings so you should establish which ones encourage the growth of your company better.
3. Attending customers
Gather all the information about your customer service since there you will get the achievements and challenges of the sales area and the other areas that interact with them.
Make sure that sellers attend to your customers perfectly in each interaction they have. You should also remember that their most important characteristics are patience, perseverance, and the ability to create significant bonds with customers through empathy and effective communication.
4. Promoting the company
Work together with the marketing area since there is no better advertising than the one that gets to potential customers voluntarily: inbound marketing.
Moreover, use public relations techniques to represent your company in professional encounters or conferences, congresses and inductions, for example. Sales representatives are experts in the creation and management of sales knowledge that will gain the company's visibility.
Main problems in the Sales area
1. Not establishing sales objectives.
It is one of the most common problems of organizational culture that many companies have to deal with, not just the sales area. If the company and its commercial and sales teams do not know what are their abilities when they sell something, they are going to fail. It is necessary to know how many products you can sell and, then, plan the financial part.
2. Knowing the products and services of the company.
The sales area has to know the products and services of its company. This way, it will be able to anticipate and adapt to any change that may be brought about on the product or service. This would be like when you recommend a product or service without having experienced it yourself.
3. Not knowing your customer.
If the sales area does not know the customers or cannot connect with them, it will very hard for it to sell them its products. This is why it is necessary to segment the audience of our products and services. You need to customize the treatment you give to your customers, what you offer them, the time you devote to them and knowing how to add more value to what we sell.
Knowing how to communicate with your customers is a vital task that companies are used to anticipate. You do not need just to convince them to buy something from you, but you need to learn how to preserve them by providing them with excellent service before, during and after the sale.
4. Lack of integration of the areas in your company with your management system.
A company that does not have its teams or areas connected and communicated can be preventing its sales from increasing. In fact, there are commercial areas that do not even know what the marketing area does and vice-versa.
With a cloud-based ERP software tool, you will have everything in one place and you will be able to use the CRM at the same time that you do marketing automation and have access to order and payment management systems; having everything together working in your company will change your reality. For a company to work properly, every area must be connected with the others and keep constant, fluent communication, especially with the sales team.
5. Having manual processes.
Even though it seems impossible, in this digital automation era there are still some commercial areas that have offline or manual processes. The reticence that has some companies about the use of automated systems makes it difficult to manage the general procedures.
Filling forms and reports over and over again, besides being a tiresome task, can result in a series of fatal errors for the company. To get real-time information, processes must be always online and attainable for everybody and the best way of doing it is having a cloud-based ERP tool.
6. Not monitoring after closing a sale.
The sales area should understand (as well as the company in general) that the sales process does not end when selling a product. If you want to keep your clients and spread out your network, it is important to do a follow-up after you make a sale to know how satisfied your client is with your product or service. Being close to your clients is vital for your company to survive.
7. Rigid administrative systems.
Worst than not having automated systems to keep the record of sales processes is having an inflexible one; that is to say, a system that does not adapt to the real needs of the company. And it is even worse when systems are expensive and their implementation takes a lot of time or when it requires a server. With a cloud-based ERP you will be able to satisfy the needs of your company and if it grows, the system will grow with you; within the ERP, you can find a CRM module.
Cloud-based ERP software is a great ally to every company or organization that cares about the satisfaction of its clients; that is why the sales area should know deeply the system, ask for demos and test the system before hiring it. They should check if it is a flexible, customizable, or scalable system.
8. Hiring not-qualified sellers.
The risk of hiring an unsuitable person to fulfill the aims of the company will increase if that person is from the managing or the commercial team. One of the functions of the managing director is choosing the people who will carry out all the tasks related to the sales processes. It is better to hire adequate people for the position instead of filling the gap and then train them. When a company faces the dilemma of hiring or training, it is willing to lose a large amount of money and time before reaching an acceptable level of competitiveness.
9. Not having a client acquisition plan.
It is easy to deal with your frequent clients because you already know them and you know which is the correct way of treating them and keeping them loyal to you. The big challenge is to attract new clients that you do not know so that they become potential clients. The sales area should have a solid marketing plan able to segment the market, create independent customers and launch good campaigns. Launching a new product to the market and waiting for clients to approach and buy it is like throwing a fish into the sea expecting that its trajectory is linear.
10. Not measuring results.
Every task in the sales area requires monitoring with the aim of implementing the necessary changes. Monitoring results (sales results or marketing results) becomes a vital responsibility of the area. If the commercial area is not capable of measuring the environment of marketing campaigns on which the company spends a lot of money, it will never know if it was successful or not. With this bad practice, capital flights in a company tend to be enormous because nobody can know how many items were sold thanks to a particular campaign.
Main challenges of the Sales Area
1. Aligning the Sales area processes with those from the Marketing area.
In order to align the processes of the marketing and the sales area effectively, it is very important that the former provides all the necessary information to the commercial team so that they can close a sale. While the sales team is in charge of delivering the information obtained from its experiences to the marketing team so that they can acquire new potential clients more easily.
The alignment between the marketing and the sales teams is known as smarketing: it fuses the terms "sales" with "marketing" and has its origin in the inbound philosophy. The advantage of this method is that it allows you to reduce conflicts of interest between the marketing and the sales teams by guaranteeing the effective quality of the leads and the sales opportunities that may arise.
Integrating both areas through a purchase funnel helps you scale processes and increase your income. This way, each team has its specific activities, avoiding misunderstandings and identifying which actions are functioning and which ones are not.
2. Implementing a modern CRM.
Sales teams must be focused on delight and deliver the best service to prospects and clients, forgetting about tedious tasks that involve working with a manual monitoring system. We talk about tasks such as gathering information of the sales processes regularly without having the certainty that that information is reliable since when you work with manual monitoring systems, you will depend on the good faith of people when providing information.
Moreover, since they are not automated processes, there will always exist the possibility of making human errors because of the lacking of precision when entering information manually.
3. After-sale service.
At this point, it is very important to distinguish between attracting new clients and maintaining the current ones in order to establish which is the company's priority, since many organizations still do not see the value of providing a good after-sale service to retain and delight the current clients.
The error of prioritizing the acquisition of new clients is made by the least competitive companies because they do not see the value and the importance of the after-sale service as the new marketing. Creating unforgettable memories in the after-sale service will help you make a real difference from your competitors by making your clients proud of being part of their lives.
4. Earning more income with upselling.
Upselling is a methodology to earn more income from the current clients by motivating clients to buy something else that would make the main purchase more expensive through an improvement or optimization of the customer experience.
Structure of the Sales Area
There are some positions and roles that are key for the proper functioning of the commercial area of a company. These are:
1. Chief Commercial Officer
It is the person in charge of the commercial strategy of the company. Besides being responsible for the commercial management, he/she works together with the Marketing area in order to organize the advertising of products and services. He/She is also in charge of studying price strategies, sales channels, and market conditions.
2. Sales Manager
This person is in charge of the sales management of the company. He/She plans strategies together with the Chief Commercial Officer, trains with the commercial team and establishes the goals that each person has to accomplish.
3. Business Intelligence Analyst
This person is in charge of making an assessment of the businesses of the company. This includes analyzing the projections of the competition and a study of the trends of the market; about the latter, he/she is also responsible for gathering information to support strategies.
4. Sales Executive
The person who is constantly looking for new business opportunities. Another of his/her tasks is qualifying the leads received from the business intelligence analysts and turn new clients into prospects for the company.
Sellers are the commercial executives in charge of closing sales. They are in charge of getting in touch with potential clients and establishing sales strategies to close deals.
6. Commercial Assistant
This is one of the people who provide administrative support to the sales area. This person is in charge of the customer service, records, execution of orders, after-sales service for customers, etc. The organization chart of the commercial area will depend on every company; there may be more or fewer positions depending on the size and needs of the company.
Hunters, Closers y Farmers: the dream team
When designing the organization chart of the commercial area, we can divide the positions into three main categories: hunters, farmers and closers.
They are in charge of the first part of the commercial process. They are known as "hunters" because they carry out the research of new clients and opportunities. Hunters are very important when launching a new product or service to the market. Their focus is on short-term results.
They are the negotiators responsible for closing deals. They are high-qualified professionals that are capable of making conversions because they are very persuasive and their focus is on results. They have a great sense of urgency, motivation and decision-making abilities. Closers work until clients say "yes" to turn leads into clients.
They are focused on creating relationships with clients. They are very empathic professionals that meet the needs of clients, assuring their satisfaction. They can forge long-term bonds and are very effective to work with existing clients and with Sales CRM software tools.
Importance of the Sales Area
This area is important in both an SME or a big company since it is a vital business opportunity for any organization to have a strategy to advertise our products to potential clients. With an active commercial area in our company, we have the opportunity of creating ideas and putting them into practice so that our services reach the people we are interested in. It is about showing our business services to the people that need them.
Many companies have several areas and departments that carry out activities for the company helping it to provide the service that clients need. Despite this, we need to understand the beginning of this process: how companies get the adequate target public and the clients they want today. The sales area is in charge of attracting clients to the company so that it achieves the desired profitability.
All in all, the Sales Area is vital in every company because it is the link between the company and its clients or target audience. It defines strategic commercial goals to generate and nurture leads thanks to the activities carried out by sellers, which respond to those goals designed by the Chief Commercial Officer or the sales manager. The interaction with potential clients can result in new opportunities for closing sales, turning these potential clients into real ones.
The Sales Area is the engine that makes the company work by making it competitive, scalable and profitable in the market. This area together with the Marketing Area can combine efforts and manage leads more effectively and efficiently since Marketing will know how qualified are the leads that it passes onto the Sales area. Moreover, if both areas implement a modern CRM tool to manage those leads, they can not only optimize processes but also the whole company will save time and money in the near and distant future.