Methods to identify success in a sales organisation

Table of content

List of figures

List of abbreviations

1 Introduction
1.1 Executive Summary
1.2 Scope of Work

2 Problem and Research
2.1 Problem Definition
2.2 Relevance and Motivation
2.3 Methodology

3 Basics on sales and controlling
3.1 Sales
3.2 Controlling
3.2.1 Origin
3.2.2 Characteristics
3.3 Sales controlling
3.3.1 Operative sales controlling
3.3.2 Strategic sales controlling

4 Objectives and Tasks of Sales Controlling
4.1 Objectives of Sales Controlling
4.2 Tasks of Sales Controlling

5 Methods of sales controlling
5.1 Distribution cost accounting
5.2 Sales income statement
5.3 Analysis of sales channels
5.4 Management of sales representatives
5.5 Reporting of sales force

6 Conclusion, critical comments and outlook

Bibliography
Literature
Internet
Other

Appendix

ITM Checklist

List of figures

Figure 1 - Functional areas of controlling

Figure 2 – Development of customer contribution margins

Figure 3 – Distribution channel assessment via contribution margins

Figure 4 – Revenue oriented sales planning

Figure 5 – Premium clause systems

Figure 6 – Reporting design of sales force

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

1.1 Executive Summary

Over the past years the company’s environments are getting more and more manifold and complicated. New, flexible forms of sales, E-Commerce and growing IT-know-how as well as an increasing change in customer preferences and requirements on the world market lead to modified tasks of sales representatives and increasing importance of sales organizations within the companies. According to a research of the consultancy firm Mercuri International^[1] most of the interviewed companies forecasted that the expansion of distribution channels, the improvement of existing sales concepts, international sales activities and further sales controlling are the key issues for the future.

1.2 Scope of Work

The assignment “Methods to identify success in a sales organization - sales controlling” starts with the introduction which includes the executive summary and the scope of work that is realized in here.

The second chapter deals with a detailed definition of the problem that causes the relevance of this assignment, the determination of the objectives as well as the methodology that describes the assignment’s structured procedure.

Chapter three is focused on the basics of sales and controlling. At this juncture in particular sales, controlling and sales controlling are being analyzed.

Chapter four is about the objectives and tasks of sales controlling where as chapter five describes the different methods of sales controlling.

Finally, the results of this assignment are summarized; especially whether the set objectives are reached as well as critical comments about the assignment is given in the last chapter.

The purpose of this assignment is to provide further research insight on a topic, which still has not yet reached saturation in terms of analysis and understanding even though there is a voluminous literature on sales controlling.

2 Problem and Research

2.1 Problem Definition

An effective customer relationship management will gain more significance in the future. In this connection the sales and distribution department plays a key role for the economic success of an enterprise as an interface between the enterprises and the customers. The success of an enterprise increasingly depends on its sales and distribution achievement. A condition for the achievement and protection of the set goals is a result-oriented planning, management and control of the sales on basis of important enterprise and fiscal information. These requirements can be met by the implementation of an efficient sales controlling.

2.2 Relevance and Motivation

According to the arising significance of company’s sales and distribution achievement, the implementation of an efficient sales controlling are essential requirements from managerial point of view.

This change requires a stronger orientation of business enterprises towards optimized sales and distribution departments as we well as sales controlling in order to create a lasting added value for the enterprise.

In order to meet these requirements, the primary objective of this assignment is to reveal and underline the importance of well implemented and managed sales controlling for corporate success and to explain methods for the management critically.

Furthermore, within the scope of this elaboration the following questions shall be answered:

- Which objectives are pursued with regard to the implementation of an efficient sales controlling?
- Which tasks does an efficient sales controlling perform?
- Which methods do an efficient sales controlling use?

2.3 Methodology

In general, data researches are clustered into two groups:^[2]

- Secondary Research
- Primary Research

On the one hand, the secondary research is based on already existing literature. The primary research or the so-called field research raises data and information on the market originally - starting point for the data collection is the origin respectively source of facts and opinions.^[3]

Due to time restrictions this assignment is only based on secondary research which is particularly about the arising problems that causes the relevance of that assignment.

Today, new flexible forms of sales, E-Commerce and growing IT-know-how as well as an increasing change in customer preferences and requirements on the world market are the main developments which cause the growing importance of well implemented and managed sales controlling for corporate value creation.

In addition, the objectives of this assignment are defined: Primary, these are the explanations about the significance of sales controlling, the critical analysis about the necessity as well as methods to manage sales controlling.

3 Basics on sales and controlling

3.1 Sales

Against the background of an increasing marketing orientation within the area of distribution, a strict separation of the terms distribution, marketing and sales is no longer adequate.^[4]

Today, the term sale is used nearly synonymously to the terms marketing and distribution. Sales particularly contain the sales of goods.

Sales in the broadest sense goes beyond the distribution of goods (logistics), controlling of the field organization as well as the care of the relations of a manufacturer to the trade and/or in case of direct selling with the end customer.

As already mentioned above, the sales play a key role for the success of a company. With the help of sales strategy fundamentals for profitability, financial stability, revenue increase, and evaluation of the future market as well as earnings potentials are set as equivalent of the customer use.

In view of the increasing dynamics in the markets, it is even more essential to aim at target groups and customer segments. Due to this reason a fast and flexible customer management is to be called as the most important orientation/adjustment of an efficient sale, i.e.:^[5]

- more customer service towards new product- and service bundles
- more supply of service thinking and flexibility, thus more customer proximity
- more promptness in all relevant selling achievements

Today a crucial competition factor is the implementation of good customer management by an excellent sales organization, due to the reason that in many industries the product-accompanying service has often a larger significance/value than the product itself.^[6]

Therefore, the major task of the sales consists of carrying out optimal customer service and maintaining customer contacts so that due to long-term customer relations the market potentials can be developed and/or secured. This presupposes that the sales management has meaningful information, in order to plan and control the goal-oriented sales activities (particularly customer oriented), and related to the attainability of the set business objectives.

Appropriate information can only be supplied by modern controlling instruments, which make it possible to analyze, to evaluate and to arrange long-term business relations accordingly.

Additionally, a aiding reporting system for the customer management is needed, which contains strategic as well as operational success components of the customer development. Moreover the planned customer strategies and investments with the daily work sizes of the customer treatment processes are linked.^[7]

3.2 Controlling

3.2.1 Origin

The first commencements of Controlling are already found towards the end of the last century in the USA, where first controller workplaces were introduced, which were first very strongly connected with financing matters. However, at the time the solution was already in the fore how to solve arising co-ordination and tuning problems with an increasing business size.^[8]

3.2.2 Characteristics

Controlling is often referred to the past. This is mainly due to the understanding that the term in its closest version was only referred to the last phase of the co-ordination -, planning and control process, the control phase. However the extent of controlling goes far beyond this close term version: Controlling is an overall function control concept with the task of result-oriented co-ordination of planning, control and information supply.^[9]

[...]

^[1] Cf. Krah, E.-S. (2000), p. 13.

^[2] Cf. Meffert, H. (2000), p. 145.

^[3] Ibidem.

^[4] Cf. Reichmann, T. (2001), p. 467.

^[5] Cf. Krah, E.-S. (2000), p. 9.

^[6] Cf. Reichmann, T. (2001), p. 468.

^[7] Cf. Wäscher, D. (2000), pp. 11.

^[8] Cf. Weber, J. (2000), p. 648.

^[9] Cf. Horváth & Partner. (2000), pp.1.