MANAGEMENT OF THE SALES FORCE
Applying Leadership Skills to Sales Management
First promotion of many salespeople is to sales manager.
Sales management is the process of planning, implementing, and controlling the
personal selling function.
Duties assigned to a sales manager vary from company to company.
Sales management involves organisation of the sales force, recruitment, training,
supervision, and motivation.
Most successful supervisory-management personnel possess two important dimensions of
leadership: “structure” and “consideration.”
1. Structure characteristics.
Plans ahead on a regular basis, setting reasonable goals, and determining how to
reach them.
Clearly defines expectations and communicates them to employees.
Makes prompt and firm decisions and involves subordinates in making the
important decisions.
Appraises performance of salespeople regularly, provides feedback.
2. Consideration characteristics.
Has regular and effective communication with employees characterized by an
atmosphere of cooperation and understanding.
Genuine interest in each member of the sales force.
Recognizes the accomplishments of salespeople and often offers praise and/or
rewards.
Coaching for peak performance
Coaching is an interpersonal process in which the manager helps the salesperson
improve performance in a specific area.
Coaching objectives include:
Helping salespeople recognize the need for improvement.
Developing the salesperson’s commitment to improve.
A coaching strategy involves four steps:
1. Document performance needs.
2. Win salesperson’s agreement that change is needed.
3. Explore solutions.
4. Obtain salesperson’s commitment to change.
Sales Manager Key Responsibilities:
Frequently, salespeople are given the opportunity to advance to the position of sales
manager and higher management positions that offer greater challenge and increased
economic rewards. Effective organization and management of a sales force is an
important responsibility of the sales manager.
The key responsibilities a sales manager: read accompanying handouts
1. Establish Salesforce objectives
2. Organizing the Salesforce
3. Recruiting and Selecting Salespeople
4. Training Sales Personnel
5. Compensating Sales People
6. Motivating Sales People
7. Assessment of Sales Force Productivity
1. Establish Salesforce objectives
Sales objectives; expected to accomplish within a certain period of time.
Give direction and purpose and act as a standard for evaluation.
Set for total salesforce and each individual salesperson.
Can be €s, units sold, market share to achieve, for individual salespersons, also
include ave. order size, ave. # of sales/time period, and ratio orders/calls.
2. Organizing the Salesforce
1. In-house vs. independent agents (manufacturer's sales agents).
Organise by:
1. Geography (simplest, but not suitable if product(s) are complex or customers
require specialised knowledge)
2. Customer: Different buyers have different needs
3. Product: Specific knowledge re: products is needed
4. Size. Marginal analysis, or determine how many sales calls/year are needed for an
organization to effectively serve its customers and divide this total by the average
# of sales calls that a person makes annually.
3. Recruiting and Selecting Salespeople
Need to establish a set of required qualifications before beginning to recruit.
Prepare a job description that lists specific tasks the salesperson should perform
and analyze traits of the successful salespeople within the organization.
May use assessment centers-intense training environment that places candidates
in realistic problem settings in which they give priorities to their activities, make
and act on decisions.
Recruitment should be a continual activity aimed at reaching the best applicants.
Applicants that most match the demographics of the target market.
Problems that may arise when the wrong person is hired.
1. Lowered productivity for the firm.
2. Loss of regular customers.
3. Potential economic loss for the company.
Suggested sources for new employees:
Candidates within the company.
College and university students.
Trade and newspaper advertisements.
Employment agencies and listings.
The Internet.
Select the best-qualified applicant.
Select applicants who have a high degree of self-motivation and are self-starters. Use of
psychological tests can help identify self-motivators.
Rules for selecting salespeople:
Do look for reliability.
Do seek relationship-building capabilities.
Use criteria other than just test scores.
Do ask character-based questions.
4. Training Sales Personnel
Use formal programs, or Informal on-the-job training. Can be complex or simple.
Aimed at new hires and experienced personnel.
Can be held in the field, educational institutions or company facilities.
Give a new employee a thorough orientation to the business operation before the
person begins working. Include history of the company, philosophy of doing
business, business policies, compensation plan, and so forth.
Initiate a training program that will help the person achieve success.
The size of the firm should not dictate the scope of the training program.
Training should focus on:
1. Knowledge of the product line, company marketing strategies, territory
information, and related areas.
2. Attitude toward the company, the company’s products and services, and
customers to be served.
3. Skill in applying personal selling principles and practices.
5. Compensating Sales People
To attract, motivate and retain sales people, that facilitate and encourage
good treatment of the customers.
Need to understand personalities of sales people. Strive for proper balance
of freedom, income and incentives.
Need to determine the best level of compensation required, and the best
method of calculating it.
Compensation plans combine direct monetary payments and indirect monetary
payments such as paid vacations, pensions, and insurance plans.
The perfect sales force compensation plan does not exist; each plan must be chosen to
suit type of selling job, the firm’s marketing objectives, and type of customer served.
Basic compensation plans include:
Straight commission plan—the only direct monetary compensation comes
from sales; no sales, no income.
Commission plan with a draw provision or guaranteed salary—similar to
straight commission but with more financial security.
Commission with a draw or guaranteed salary plus a bonus—offers more
direct financial security.
Fixed salary plus bonus—fosters company-centeredness and provides
financial security if salary is competitive; bonus incentive motivates.
Straight salary—fosters company-centeredness and provides financial
security.
Variation of basic plan—for example, an award program.
Point Incentive Program (PIP) is used when attempting to achieve a
particular sales objective.
Cash awards or points can be earned to purchase prizes.
Sales objectives achieved with awards program:
(1) Specific product movement.
(2) Percentage sales increase.
(3) Establish new accounts.
(4) Increase sales activity.
Guidelines for developing a good compensation plan.
1. Define sales and marketing objectives in detail.
2. Field test the compensation plan before implementation.
3. Carefully explain compensation plan to sales force.
4. Change compensation plan when marketplace conditions warrant.
6. Motivating Sales People
Sales contests increase sales.
Symbolic awards--plaques, rings etc.
Can also use negative motivational methods for under performers.
Due to burn out--even the best need motivating!! Ongoing process...keep
reps. Hungry
Need a motivational program.
Spend time with reps, personal attention!!
Take interest in them and the sales goals
Internal motivation, an intrinsic reward, occurs when a duty or task is performed.
External motivation is an action taken by another person that involves rewards that
cause a worker to behave in ways to ensure receipt of the award. Findings in the
behavioral sciences tell us that, in some cases, non-financial incentives motivate as much
as money. Usually, intrinsic motivators have a longer effect on employee attitudes than
extrinsic motivators.
Intrinsic motivators include achievement, challenge, responsibility, advancement,
growth, enjoyment of work itself, and involvement.
Extrinsic motivators include contests, prizes, quotas, and money.
It is possible to design reward programs that benefit the employee and the organization if
you follow these guidelines:
1. Design programs that focus on several important aspects of the salesperson’s job.
2. Evaluate your incentive program often to determine what plan has the most impact.
Avoid setting goals that are unrealistic.
Need a systematic approach, must also satisfy non-financial needs:
Job security
Working Conditions
Opportunities to succeed
Guidelines
1. Compensation packet that rewards quality salesmanship and extra effort
2. Recognition of extra effort of sales force
3. Make sure SR feel important
4. Keep SR informed of company activities
5. Make certain reps. believe in the company
6. Goals must be realistic and achievable and changeable
7. Determine what they want and give it to them
6. Assessment of Sales Force Productivity
Controlling and Evaluating Sales force performance - Rely on information from call
reports, customer feedback and invoices. Performance is determined by objectives. May
compare with predetermined performance standards or with other sales people working
under similar conditions.
The goal of measuring performance is to analyze the profitability of the sales volume
brought in by each salesperson.
Measuring sales performance can be somewhat complicated.
Measurements of sales performance include:
Frequency of calls.
Cumulative quarterly, semiannual, or annual results in relation to established
goals.
Common criteria for assessing the productivity of salespeople:
Quantitative criteria related to sales volume, new accounts, profit, and number of
calls made.
Qualitative criteria related to attitude, product knowledge, communication skills,
personal appearance, customer feedback, selling skills, and personal initiative.
