Sales Management for Virgin Atlantic

Sales Management for Virgin Atlantic

Introduction

Sales management can be defined as the process through which businesses develop their sales force, organize their sales operations, and implement sales methods with the aim of achieving or exceeding their sales targets (Cuevas 2015). Sales management enables businesses to increase their sales and enhance their profitability in the market. It also contributes to business growth. According to Jobber and Lancaster (2019),poor sales management practices can lead to low sales or even business losses. This can, in turn, impede business growth. Using Virgin Atlantic as a case study, this report explains the key principles of sales management and how this varies in response to consumer and business buying behavior. It also examines the sales structure of Virgin Atlantic and the advantages of selling through others. This report also examines how the company manages customer relationships and how it can ensure it remains profitable. Finally, the report provides an evaluation of what I have learnt so far with regards to sales management.  

Virgin Atlantic Company Overview

Virgin Atlantic is a British multinational airline that is headquartered in Crawley England. The airline flies to different destinations across the world including Africa, North America, South America, and Asia. It was founded by Richard Branson. Branson has a reputation for his excellent management skills and exemplary creativity (Virgin Atlantic 2020). When he founded the company, Branson envisioned that the airline was to succeed in the first year or else exit the market. With great commitment from all employees at the time, the airline become profitable within the first year. Virgin Atlantic is known for its good services that reflect on consumers’ needs and expectations.  Virgin operates a three-class cabin configuration: the upper, the premium, and the economy class (Goldstein 2019). It was the first airline to provide individual entertainment to passengers in all the classes (Virgin Atlantic 2020). The airline stays committed to good service delivery and provides a good example in terms of effective sales management.

Principles of Sales Management

One of the key principles of sales management is related to sales planning. Sales planning involve sales forecasting, ensuring demand management, setting sales targets, and developing steps of how to meet the targets (Weinberg 2015). As argued by Tanner et al. (2013), sales planning processes enables businesses to organize activities essential for them to meet their sales or business goals. Sales’ planning is very important to the sales work force at Virgin Atlantic. For one, it is through sales planning that the sales management at the company is able to analyze the current market conditions and business environment. This information is used in the company to set sales goals or targets. A plan on how to meet the targets is developed based on the sales goals (Hair 2010). With the plan in place, the company then executes it and evaluates the execution process with the aim of measuring results. In the absence of sales planning, the management at Virgin Atlantic can make the wrong assumptions about the market (for example, the demand for its services), set unrealistic sales target, and develop an ineffective plan (Business Case Studies 2019). This can in turn affect its ability to increase sales, profits, and ensure growth. Sales planning are also important as it enables businesses to measure success. Monitoring the plan provides the information required for a business to make adjustments should the need arise.

Principles of sales management are also related to methods of selling. A company must develop methods of selling that are appropriate to its business and the target consumers. As stated by Weinberg (2015),failure by a company to select an appropriate method of selling can result in low sales and low business growth. Common methods of selling include traditional selling, creative selling, and consultative selling. In consultative selling, a business works with consumers to develop solutions to their (customer) problems (Schultz & Doerr 2014). The main focus is on the consumer and not the product. In creative selling, the sales personnel utilize well-planned strategies and techniques to attract customers. Virgin Atlantic takes advantage of this approach by stressing how its services are differentiated from the competition to persuade consumers to fly with it as opposed to flying with the competition. Traditional selling, on the other hand, involves an organization selling its goods or services through persuasive communication. Virgin Atlantic uses both business-to-business (B2B) and business-to-consumer (B2C) modes of selling. B2C involves selling products directly to the target consumer while B2B entails selling products to other businesses. Virgin Atlantic sells its air travel services to individual travelers as well as other business (Virgin Atlantic 2017). Businesses that consume Virgin Atlantic services include cargo companies and hotel businesses.

Sales reporting are also essential to effective sales management. Reporting enables a company to determine how its current sales strategies and efforts are affecting its success (Kotler et al. 2019). Information collected from sales reporting can be used to determine areas that require improvements to boost sales. Sales metrics are used in determining how different processes in the sales operations are performing. These are also used to determine whether the sales targets are being met or not. In the event that sales targets are not being met, a company can determine which operations may be hindering the achievement of the same (Weinberg 2015). Virgin Atlantic benefits from sales reporting. By analyzing its sales reports, the company is able to determine its most profitable services. This also enables the company to pinpoint its most profitable consumers. According to Weinberg (2015), such information can be used to develop strategies that will enhance the level of loyalty among such customers. In the same way, sales reporting data is used by sales managers at Virgin Atlantic to identify sales opportunities as well as potential problems that can hinder sales growth. The company can seize the opportunities to expand business. Regarding the potential problems, the company can come up with strategies to address them and enhance its competitiveness. Generally, sales reporting are very essential to the continued growth of Virgin Atlantic.

The above stated principles of sales management vary in response to consumer and business buying behavior. This behavior varies depending on a number of factors including the supply of products, the nature of the products, the price, the quality, and the availability. For example, consumers spend less time thinking when deciding to purchase a low value product as compared to products that are considered to be of high value. As argued by Jobber and Lancaster (2019),low value products are purchased on impulse. Sales planning is less complex when dealing with low value products. Low value services at Virgin Atlantic include its economy class services. The company ensures that such services are packaged attractively to encourage consumers to purchase them as opposed to consuming what is offered by the competition (Business Case Studies 2019). The methods of selling also vary in response to consumers and business buying behaviors. For example, when dealing with consumers who are attracted to products that solve their problems, a company needs to take advantage of the consultative selling approach (Kotler et al. 2019). Virgin Atlantic utilizes this approach. The company works closely with its consumers to determine how it can best enhance their air travel experience. It is keen to establish good customer relationships to understand their needs and develop services that reflect on the same.

Sales Structures

Virgin Atlantic utilizes different sales structures including direct selling and selling through others. One of the sales structures is by geography. Organizing sales people by geography allows them to familiarize themselves with markets in specific geographical locations. This also enables them to build strong relationships with local businesses, to better understand local businesses, and to track target consumers (Jobber & Lancaster 2019). Being a global company, Virgin Atlantic benefits a lot from organizing its sales team based on their geographical location. Another sales structure is by product. Using this structure, the sales team at Virgin Atlantic aligns is salespeople to specific services including those targeted at price sensitive consumers as well as high-end consumers (Weinberg 2015). This sales structure is used to ensure that each sales team develops skills and knowledge on how to meet the needs and expectations of their target customer segments (Jobber & Lancaster 2019). Sales structures can also be based on the market or industry. Companies and organizations offer products or services that are used in different ways depending on their market or industry. Sales teams are organized accordingly to ensure they deliver on a company’s promise to its target consumers.  

Using the different structures, Virgin Atlantic is able to make its services available to its target consumers through direct selling. Direct selling involves the sales of products or services directly to the target consumer without the use intermediaries (Cuevas 2015). An example of direct selling is Virgin Atlantic’s direct reservation systems. Consumers can come directly to the airline’s reservation systems and book their flights. This approach to selling is more appropriate for consumers leaving close to the airline. Customers can also take advantage of Virgin Atlantic’s website to make their bookings. The use of e-booking systems has enabled the company to serve customers across the globe (Virgin Atlantic 2017). Basically, geographic location does not matter. The use of internet booking has been on the rise in the recent past as a result of increased internet use among consumers. Many people find this approach to selling more convenient as they can make reservations and bookings at the comfort of their homes or at work. The airline also sells its services directly to the target consumers through its call centers. This service can also be utilized by the target travelers across the world (Camilleri 2018). All consumer needs to do is to search for the airline’s contact information in their local areas.

Direct selling has a number of advantages. One of the major advantages of direct selling is the fact that a company has more control over how it markets and sells its products to the end-consumer (Jobber & Lancaster 2019). The use of intermediaries can result in poor selling especially if a company’s partners fail to implement effective marketing strategies. Direct selling can also enable a business to reduce costs associated with the use of third parties. In the airline industry, third parties charge airline companies for the services rendered. This can reduce a company’s profits (Jobber & Lancaster 2019). However, to take advantage of these benefits, an airline such as Virgin Atlantic must ensure that its direct selling channels are attractive. For example, when selling tickets through its website, the company must ensure that users have a seamless experience. They should find it easy to navigate the website and buy tickets (Camilleri 2018). The airline companies must also work closely with their consumers to determine how to best improve their direct selling tools to enhance customer experience. The sales management at Virgin Atlantic must also ensure that it provides the commission and incentives for ticket sales, for example, in the form of frequent flyer point (Camilleri 2018).

Indirect selling or selling through others involves making products or services available to consumers through third parties. In the airline industry, common indirect selling channels include the use of consolidators, tour operators, online travel agencies, and corporate travel agencies (Shaw 2016). Consolidators (wholesalers of tickets) purchase tickets directly from airline companies such as Virgin Atlantic at a special price and resell them to end-customers or retail agencies. Tour operators provide holiday services that combine tour components such as car rentals, hotels, and site seeing with air travel to their target consumers (Shaw 2016). Such organizations work closely with airline companies such as Virgin Atlantic to provide end-to-end transport solutions to their consumers. Online travel agencies, on the other hand, function like tour operators. However, their services are provided through the internet platform. These services can be accessed through mobile phones and website applications (Shaw 2016). Corporate travel agencies handle travel arrangements through long-term partnerships with and agency implants. Virgin Atlantic sells its services indirectly to its target consumers using the foregoing indirect channels (Virgin Atlantic 2017). For example, it works with tour operators in different countries across the world. It also uses consolidators to sell tickets to a large customer base. The geographical location of a customer impacts the channel the use to access the airline’s services.

Selling through others has numerous advantages. For one, this strategy can enable a company to into its existing customer base with ease. Building customer trust can be challenging and requires considerable time and resources (Wollan 2013). However, the use of third parties can enable an airline to take advantage of the relationships these have with their loyal customers. Basically, an airline can leverage its partner’s brand recognition while at the same time reaching more customers. Selling through others can also be cost-effective (Wollan 2013). Virgin Atlantic does not have to hire more sales and marketing employees and build its own networks to market its services to the consumer. Its partners usually have all the required resources and procedures in place to offer the right services to the consumer in an efficient manner. As a result, the airline benefits from expense sharing, leverages established logistics, processes, and systems. It is also able to cut on the time and costs required to expand its operations. Moreover, as stated by Weinberg (2015),utilizing established logistics can enable a firm to streamline, scale, and focus its sales efforts on what the resellers cannot provide. Indirect sales can also enable a business to increase the speed of entering a market. Being a global company, Virgin Atlantic benefits in a similar manner especially when expanding to other markets.

Selling through others also has some disadvantages. The use of indirect channels can result in poor customer relationships. Studies have shown a business’ external sales partners may be less passionate about its products as compared to its own internal sales team (Shaw 2016). The risk of conflicts arising as a result of partner working with competition is also high. Consequently, it is extremely imperative for a business to ensure it selects partners who share its commitment to exemplary service delivery. Selling through others can also come at a price. For example, some external partners may want to share a firm’s revenue or offer their services at a price (Shaw 2016). It is essential for an airline such as Virgin Atlantic to be mindful of such expenses to avoid unnecessary costs that can impact negatively on its profits. When entering a new market, it is important for Virgin Atlantic to select partners who share its values and vision regarding how its wishes to enter and develop in the target market. The decision to work with external partners must also be based on a need basis (Shaw 2016). The evaluation of existing channels should inform the decision to use third parties to provide services. Overall, if implemented in the right way and for the right reasons, the approach of selling through others can be very beneficial to a firm (Wollan 2013).

Customer Relationships Management

The airline industry is very competitive. Airline companies such as Virgin Atlantic not only face competition from other airlines but also from other forms of transport such as rail and water transport (Bilotkach 2017). The introduction of the railway electrification system improved the convenience and attractiveness of the rail transport system. Airlines also face competition from water transport which is considered to be the best alternative for cargo transport. However, Virgin Atlantic’s main threat in terms of competition is other airlines. These include, among others, Finnair, Toscana Aeroporti, Indigo, ExpressJet Airlines, Air India, Singapore Airlines, Etihad Airways, Malaysia Airlines, Qantas Airlines, Lufthansa, British Airways, Air France, Emirates, and United Airlines (Owler 2020). The high level of competition among companies in this sector gives consumers more power. They (consumers) can easily switch airlines whenever they feel dissatisfied with the services provided by their current airline of choice. Virgin Atlantic faces these challenges both in its B2B and B2C business categories. As such, it is imperative that it comes up with strategies on how it can not only attract consumers but also build and maintain their trust.  The company can benefit a lot from establishing strong relationships with target consumers.

Building and managing customer relationships is essential to survival of B2C and B2B businesses across all industries including the airline industry. It is through effective customer relationship management that a business can achieve customer loyalty and retention (Raab et al. 2016). Basically, establishing good relationships with customer reduces the risk of a business losing its customers to the competition. Companies operating in very competitive environment must invest more in establishing good relationships with their consumers. Strong customer relationships also promote or encourage repeat purchases. A happy customer looks for opportunities to do more business with a company (Nasir 2015). The total revenue from a single customer is also increased through the development of strong customer relationships. Unhappy customers, on the other hand, may decide to try products or services offered by the competition. According to Jobber and Lancaster (2019), it is usually less expensive to retain existing customers than to attract new ones. Attracting new customers may imply high marketing costs. Dissatisfied customers can also spread discourage others from doing business with a particular company. Looking for new customers also mean that a company has to build new relationships, a process that can be challenging. Strong customer relationships also strengthen a brand’s image. This, in turn, enhances a brand’s ability to attract and retain consumers (Nasir 2015).

Various principles and techniques are associated with effective selling and repeat business. One of the key principles is the fact that selling is about relationships (Cuevas 2015). Competition is a major challenge in all business sectors. Consumers are attracted to companies that build better strong relationships and are able to build rapport, show genuine interest, identify their (customers) needs, build trust, and add value. A product offered by a business should address a customer need or problem. This means that a product should be of some value to the target consumer, failure to which a business may not attract consumers. Value and price also go hand in hand. Consumers may consider a certain product to be expensive. Often, as argued by Tanner et al. (2013),the problem may not be with the price but with the value of the product. A majority of consumers can be willing to purchase an expensive product if the price matches its value. Effective selling also demands effective listening. It is imperative for a business to listen to its target consumers as they air their views and ideas regarding its products and services (Weinberg 2015). Listening to consumers can enable the sales team in a company to determine consumer needs and expectations. Creating products and services that reflect on consumers’ needs enhances consumer satisfaction and this, in turn, increases loyalty.

Virgin Atlantic follows the above stated principles to attract and retain consumers. The airline stays in touch with its consumers and spends considerable time listening to their opinions, ideas, and grievances. Consequently, it is able to provide services that meet or exceed consumers’ expectations (Business Case Studies 2019). Staying in contact with consumers also enables the airline to personalize its services whenever possible. As a global airline, sales managers at Virgin Atlantic understand that consumers’ needs vary from one market to another. Through personalization, the airline is able to offer services that are tailored to its various types of consumers (Virgin Atlantic 2017). The airline also ensures that its services are priced competitively. It understands that consumers are willing to pay for a good value. Virgin Atlantic uses this strategy to attract consumers and to ensure it does not lose them to the competition (Business Case Studies 2019). It always tries to ensure it beats the value provided by the competition in terms of the service as well as the customer service provided. The airline is also always keen to address any grievances raised by consumers. The sales management team shows concern in consumers’ wellbeing. This enables the company to mitigate the risk of losing its loyal customers because of a complaint.

The above stated techniques facilitate customer relationship management at Virgin Atlantic. A business cannot build strong relationships with consumers it knows little or nothing about (Ingram et al. 2015). Interacting with consumers and collecting information from them is key to the development of a good relationships and it is through this that a company can determine their needs and expectations. Consumers are always interested in doing business with businesses that understand their needs and are willing to address them. Knowing the customer can be pointless if a company fails to use this knowledge to provide value to the consumer. Consumers expect their relationship with a company to be of some value. Lack of value can ruin a company’s relationship with its target consumers (Kotler et al. 2019). Providing great value, on the other hand, can enhance the relationship and result in consumers coming back for more and even convincing their families and friends to do business with the company in question. Trust is also essential in building strong customer relationships. Customers are always interested in businesses that show genuine interest in their wellbeing and deliver on their promise (Jobber & Lancaster 2019). Virgin Atlantic has benefited in a similar way. By understanding that customer relationships are built over time and that this process in never ending, the company continuous to look for new ways to strengthen this relationship.

Sales Strategy

A number of strategies can be used to make a company more profitable (Kotler et al. 2019). Recruiting and selecting the right people is first step in the right direction. When hiring people, it is imperative for the recruitment team to focus on selecting individuals with the right skills mix (Kotler et al. 2019). Good salespeople should be driven by passion and be highly motivated. They should also be determined to ensure the achievement of an organization’s sales goals. Attracting and retaining consumers is also essential to making a company more profitable. To attract consumers, salespeople must spend time marketing a company’s products and services to them (Kotler et al. 2019). A company must hire experienced marketers with the ability to create awareness about the brand to prospective consumers. For example, marketers should have the ability to use unique techniques and strategies to advertise a business to the target market (Martin 2015). After winning consumers, it is important that salespeople treat them in a respectable manner to ensure loyalty as customer loyalty plays an integral role in making a business profitable (Jobber & Lancaster 2019). Efficient use of resources is also very important as this helps in cutting unnecessary costs that can reduce a business’ profitability. When marketing products, for example, marketers can be encouraged to use free resources such as social media sites to lower marketing costs.

Developing sales strategies and incorporating account management is also essential in ensuring that a company remains profitable. Developing a sales strategy enables a company to position its products to target consumers in a differentiated and meaningful way. A sales strategy is also used to create a vision and the steps required to achieve it (Jobber & Lancaster 2019). Many companies fail to achieve their sales goals simply because they do not develop a plan or strategy on how to achieve the same. Consequently, the risk of reporting low sales increases. Low sales in turn reduce a firm’s profitability (Cuevas 2015). A sales strategy also enables salespeople to hire the right talent. This is because sales strategies stipulate sales goals and how they can be achieved. Account management is equally important in enhancing the profitability of a company (Kotler et al. 2019). It starts after a customer has consumed or purchased a service from a firm. The main goal is to ensure customers remain loyal to the firm. Account managers seek to prove a firm’s value to prospective clients. They manage customer relationships, identify up-sell opportunities, track account metrics, and strategize to meet consumer needs. As argued by Cuevas (2015),loyal customers increase a company’s sales when they engage in repeat purchases. More sales mean more profits.

Developing sales strategies and incorporating account management fits within the sales structures. Regardless of the sales structures used by a company, it is only through the development of a sales strategy that it can increase its sales (Cravens et al. 2012). For example, when selling through others, it is imperative for a company to develop sales strategies that fit this sales structure. The same is also true for direct sales. However, account management may vary depending on the sales structure employed by a company. When selling through others, it is essential for a company to work closely with its sales partners to build strong relationships with the target consumers and to look for opportunities for repeat sales (Weinberg 2015). A regular review of the sales strategies and account management practices is also important to ensure they are adapted to the ever changing sales environment. There can be times when a company needs to adjust its sales structures to better serve its consumers. Account management practices must also be adapted to the new structures. A company must continue to look for opportunities to prove to its target consumers that doing business with it is worthwhile (Cuevas 2015). It is also important that sales structures facilitate business growth and the generation of profits.

Methods of Finance

Methods of finance can enable a company to build a successful customer portfolio. A company needs to calculate its margins to determine whether its sales strategies are working or not. A high margin can be used as indicator for sales growth. Essentially, failure to calculate the margins can make it hard for the sales team to determine whether the sales goals and objectives are being met (Weinberg 2015). Calculating margins can also enable a company to assess its performance against the competition. This also enables the management in a company to control both direct and indirect sales expenses. A company also needs to determine the payment mechanisms and the terms and conditions associated with the same. It is important that customers are aware of the available payment methods and how method affects them. The company is question also needs to establish payment mechanisms that are convenient to the target consumers (Weinberg 2015). Moreover, a company such as Virgin Atlantic must ensure it provides the resources required by the sales team to achieve the sales goals and objectives. Tracking the overall performance management is equally important. The top managers need to communicate regularly with their employees to ensure everything is going as planned or envisioned.

Calculating margins and determining payment mechanisms gives a company a competitive edge. A company that does not know if it is making a profit or not is doomed to fail. Such a company may assume that it is making profits when it is making losses. According to Cravens et al. (2012),tracking margins can enable a firm to determine areas that need improvement to enhance its profitability. This can also enable it to establish its strong areas and enhance the same to further increase its profitability. Profit margins are also used to determine customer segments that are performing well and those that are underperforming (Ingram et al. 2015). Sometimes, a company can be forced to terminate relationships with underperforming segments to eliminate the risks of losses. Having an understanding of the methods of payment also helps the sales team to utilize strategies that are convenient to the target customers (Hair 2010). In the same way, a company can take advantage of efficient payment mechanisms and avoid unnecessary costs that can impact negatively on its profitability (Cuevas 2015). Virgin Atlantic can benefit from examining the methods of financing. This can help it to make informed decisions on areas of improvement and ways through which it can increase its profits.

What I Have Learnt so Far and Recommendations

I have learnt that, to a greater extent, Virgin Atlantic utilizes the various principles of sales management. It not only takes advantage of the benefits associated with sales planning and sales reporting but also uses different methods of selling to sell its services. I have also learnt that the company has implemented different sales structures to better serve the needs of its customers on the global market. It also sells its services directly to the consumer as well as through others. Consequently, the company benefits from the advantages associated with doing business with others. Virgin Atlantic has also shown great commitment to building strong customer relationships. The sales team works closely with the company’s target customers to determine their needs and expectations. The information collected from the customers is used to create services that meet or exceed consumers’ expectations. The airline also provides after sales services to its consumers. These services are used to determine whether the target customers are satisfied with the airline’s services. Through this process, the company is also able to address any customer grievances associated with its services. Doing this has helped the company to maintain the highest level of loyalty among its consumers.

The airline industry keeps on evolving. Trends such as speedy technological changes, changes in consumers’ needs and expectations, changes in governmental rules and regulations, and economic changes all affect the company’s ability to attract and retain consumers. These changes also impact the airline’s competitiveness and its ability to make profits. It is essential for the sales management team to ensure that the airline’s sales strategies are adapted to the changes. It is essential that the team is flexible to incorporate changes, for example, in the sales structures should the need arise. The sales team in the airline also needs to take advantage of emerging technologies to connect with consumers. According to Behar (2020), doing this can also facilitate service delivery. The internet of things is one area full of opportunities that the airline can utilize to collect data from consumers and to cut on the costs of attracting and retaining them. It is also important for the sales team to be always on the lookout for opportunities to differentiate the Virgin Atlantic services. This will enable the company to give its target consumers the reason to consume its provisions as opposed to what is offered by the competition.

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