Introduction:

A Sales Management Operating System (SMOS) refers to the business process framework of a sales organization. Components of the SMOS include the strategy, operations, and monitoring. An effective Sales Management Operating System dictates the processes and procedures meant to fulfill the long term strategy and short term goals of a sales organization.


Sales Strategy:

Sales strategy refers to the long term policies meant to shape the perception of an organization in the eyes of its customers. Considerations to take into account include the capabilities of products, status of the market, and the core capabilities of the organization.


Sales Planning:

A sale planning process refers to how an organization aligns their existing resources to fulfill their sales strategy. Included in sales planning are the concepts of quota management, territory alignment, and compensation schema which often drive the behaviors of the sales group.


Sales Execution:

Sales execution policies tie closely in to the sales planning process because it often dictates the customer facing behaviors of the sales force. Included in sales execution how an organization chooses to deploy allocated resources into a market, and how to manage them. It dictates performance review communications as well as escalation procedures.


Sales Servicing:

Sales servicing processes and policies have become more and more important as multiple channel sales processes have gained popularity. Servicing includes the processing and returns, warranty repairs, as well as any customer service interactions after the sale.


Monitoring and Reporting:

Sales monitoring and reporting programs are the benchmark by which sales organizations determine whether or not they have achieved their goals. Monitoring programs include quota progression, inventory management, as well as target attainment.


Customer Retention:

Customer retention is the activity an organization takes to reduce the number of customers it loses over time. Though the strategies for customer retention vary greatly, there are commonalities that successful organizations share. Marketing experts point out a strong correlation between the existing customer experience and its ability to attract new customers.1


Example:

Let’s say you work for a company that makes Wi-Fi routers in the US. You are appointed the Project Director for a sales management re-organization. Previously, the sales organization was divided into 8 regions, and you are responsible for reorganizing the sales organization into four regions with a new sales management structure that is reduced by 20%.

You must revisit the sales strategy. Is it in line with your core capabilities? Once a strategy is decided, you must align your sales force to fulfill demand. You must design a management structure that deploys a sales force that is compensated for both revenue and profitability growth. Additionally, as the customer facing part of the organization, they will need to be capable of dealing with customer service issues after the sale as well as customer retention campaigns.

Finally, you must design a sales reporting structure that provides feedback immediate feedback based on the key performance Indicators (KPI’s) that most accurately dictate performance. Ideally, these monitoring processes will feed back into top management and throughout the SMOS so that you can control quality based on customer feedback.


Advantages:

• Enables sales organizations to control performance from top to bottom.

• It aligns strategic vision with sales execution while dictating roles and expectations at different levels of the organization.

• It enables customer feedback directly into the strategic planning process.


Disadvantages:

• Requires capable managers with the appropriate the appropriate training to manage different levels of the sales force.


References:

• [1] Reicheld, Frederick (1996). The Loyalty Effect: The hidden force behind growth, profits and lasting value. Watertown MA.: Business Harvard Review.