Question

Expense management is a lesser known aspect of sales management. Why is it critical and what are the key considerations for expense management from the sales manager’s perspective? Finally, how are selling expenses tied to value creation and customer relationship building?

Answer 1

Answer: Expense management refers to the activities that are carried out for the assessment and management of expenses that are incurred during the process of sales. Sale is a critical activity for any organization and its success decides the profitability of the organization. Hence sales management play a critical and crucial role in making any organization successful or a failure. The sales process itself involves making expenses under different heads. Expense management enables the sales managers to control and manage these expenses. If the sales expenses exceed a certain limit and offset the profits from the sales, the very purpose of sales is lost. Hence expense management enables a sales manager to manage the sales process by managing the expenses. The sales manager need to curtail the sales expenses as just like any other expense they add to the costing and increases the prices of the products. This reduces value creation for the customers and high price offer less vale to the customers. This also affects the relationships with the customers as high prices make the customers adverse to the company.