Sales force management system

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Sales force management systems are information systems used in marketing and management that help automate some sales and sales force management functions. They are frequently combined with a marketing information system, in which case they are often called Customer Relationship Management (CRM) systems.

Sales Force Automation Systems (SFA), typically a part of a company’s customer relationship management system, is a system that automatically records all the stages in a sales process. SFA includes a contact management system which tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required. This ensures that sales efforts are not duplicated, reducing the risk of irritating customers. SFA also includes a sales lead tracking system, which lists potential customers through paid phone lists, or customers of related products. Other elements of an SFA system can include sales forecasting, order management and product knowledge. More developed SFA systems have features where customers can actually model the product to meet their required needs through online product building systems. This is becoming more and more popular in the automobile industry, where patrons can customize various features such as color and interior features such as leather vs. upholstered seats.

An integral part of any SFA system is company wide integration among different departments. If SFA systems aren’t adopted and properly integrated to all departments, there might be a lack of communication which could result in different departments contacting the same customer for the same purpose. In order to mitigate this risk, SFA must be fully integrated in all departments that deal with customer service management.


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[edit] Advantages to the sales manager

Sales force automation systems can also affect sales management. Here are some examples[1]:

  • The sales manager, rather than gathering all the call sheets from various sales people and tabulating the results, will have the results automatically presented in easy to understand tables, charts, or graphs. This saves time for the manager.
  • Activity reports, information requests, orders booked, and other sales information will be sent to the sales manager more frequently, allowing him/her to respond more directly with advice, product in-stock verifications, and price discount authorizations. This gives management more hands-on control of the sales process if they wish to use it.
  • The sales manager can configure the system so as to automatically analyze the information using sophisticated statistical techniques, and present the results in a user-friendly way. This gives the sales manager information that is more useful in :
    • Providing current and useful sales support materials to their sales staff
    • Providing marketing research data: demographic, psychographic, behavioural, product acceptance, product problems, detecting trends
    • Providing market research data: industry dynamics, new competitors, new products from competitors, new promotional campaigns from competitors, macro-environmental scanning, detecting trends
    • Co-ordinate with other parts of the firm, particularly marketing, production, and finance
    • Identifying your most profitable customers, and your problem customers
    • Tracking the productivity of their sales force by combining a number of performance measures such as: revenue per sales person, revenue per territory, margin by customer segment, margin by customer, number of calls per day, time spent per contact, revenue per call, cost per call, entertainment cost per call, ratio of orders to calls, revenue as a percentage of sales quota, number of new customers per period, number of lost customers per period, cost of customer acquisition as a percentage of expected lifetime value of customer, percentage of goods returned, number of customer complaints, and number of overdue accounts. More complex models like the PAIRS model (by Parasuraman and Day) and the Call Plan model (by Lodish) can also be used.

[edit] Advantages to the marketing manager

It is also claimed to be useful for the marketing manager. It gives the marketing manager information that is useful in :

  • Understanding the economic structure of your industry
  • Identifying segments within your market
  • Identifying your target market
  • Identifying your best customers in place
  • Doing marketing research to develop profiles (demographic, psychographic, and behavioral) of your core customers
  • Understanding your competitors and their products
  • Developing new products
  • Establishing environmental scanning mechanisms to detect opportunities and threats
  • Understanding your company's strengths and weaknesses
  • Auditing your customers' experience of your brand in full
  • Developing marketing strategies for each of your products using the marketing mix variables of price, product, distribution, and promotion
  • Coordinating the sales function with other parts of the promotional mix (such as advertising, sales promotion, public relations, and publicity)
  • Creating a sustainable competitive advantage
  • Understanding where you want your brands to be in the future, and providing an empirical basis for writing marketing plans on a regular basis to help you get there
  • Providing input into feedback systems to help you monitor and adjust the process

[edit] Strategic advantages

Sales force automation systems can also create competitive advantage. Here are some examples[2]:

  • As mentioned above, productivity will increase. Sales staff will use their time more efficiently and more effectively. The sales manager will also become more efficient and more effective. (see above) This increased productivity can create a competitive advantage in three ways: it can reduce costs, it can increase sales revenue, and it can increase market share.
  • Field sales staff will send their information more frequently. Typically information will be sent to management after every sales call (rather than once a week). This provides management with current information, information that they will be able to use while it is still valuable. Management response time will be greatly reduced. The company will become more alert and more agile.
  • These systems could increase customer satisfaction if they are used with wisdom. If the information obtained and analyzed with the system is used to create a product that matches or exceeds customer expectations, and the sales staff use the system to service customers more expertly and diligently, then customers should be satisfied with the company. This will provide a competitive advantage because customer satisfaction leads to increased customer loyalty, reduced customer acquisition costs, reduced price elasticity of demand, and increased profit margins.

[edit] Disadvantages

Detractors claim that sales force management systems are:

  • difficult to work with
  • require additional work inputting data
  • dehumanize a process that should be personal
  • require continuous maintenance, information updating, and system upgrading
  • costly
  • difficult to integrate with other management information systems

[edit] Encouraging use

For all the reasons stated above many organisations have found it difficult to persuade sales people to enter data into the system. For this reason many have questioned the value of the investment. Recent developments have embedded sales process systems that give something back to the seller within the CRM screens. Because these systems help the sales person plan and structure their selling in the most effective way they give a reason to use the CRM.

[edit] Resources

[edit] See also

[edit] References

  1. ^ TouchStar Field Service, Inspection & Maintenance , http://www.touchstargroup.com/s2008/pages/ServiCe.aspx
  2. ^ TouchStar Field Service Automation , http://www.touchstargroup.com/s2008/pages/ServiCe.aspx
  • Haag, Stephen; Maeve Cummings, Donald J. McCubbrey, Alain Pinsonneault, Richard Donovan (2006). Management Information Systems for the Information Age (Third Canadian Edition ed.). Canada: McGraw-Hill Ryerson. pp. 50 & 176–177. ISBN 0-07-095569-7. 
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