Sales Cost and Profitability Overview Sales product Mix Profitability
Knowledge-Base-> Functional Management -> Sales & Distribution -> Sales cost and profitability management
Sales Objectives Clarity
One has to define the measures for sales function, which layout the level of emphasis which needs to be placed on sales bottom line (sales profitability) vs. Sales Revenue. Sales people generally have a grouse that they get different messages from the management in terms on 'top line vs. bottom-line vs. both'. They also say that it's not possible to focus both on bottom-line and top-line at the same time.

One has to define the measures for sales function, which layout the level of emphasis which needs to be placed on sales bottom line (sales profitability) vs. Sales Revenue. Sales people generally have a grouse that they get different messages from the management in terms on 'topline vs. bottomline vs. both'. They also say that it is not possible to focus both on bottom-line and top-line at the same time. A head of sales has a main task of providing that clarity and intent of sales function.

As the sales goals are set, one has to ensure:

  • Sales people are not confused.
  • The goals are not too complex in terms of sales targets across products, product lines.
  • The goals are not too rigid at the detailed level.

Essentially the idea is not to take away the basic sales instinct and freedom from the sales staff. Sales people at the ground need simple and straight goals. They want some level of freedom to sell whatever they can given the type of customer, type of 'moment of sale' and type of opportunity. The other care on has to take is that the goals should not change too often (unless driven by a product launch OR a sales campaign). In most cases (with the exception of high value institutional sales), a sales person needs simple and stable objectives.

 

Sales Cost and Profitability Overview Sales product Mix Profitability


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