Managing the sales force - >Effective Recruiting >Selecting and training the sales force >Time and territory Management >Sales territories and sales quotas >Compensating sales force >Motivating the sales force >Controlling the sales force >Evaluating the sales force

1. Managing the sales force
Dr. Karpagam
Director – Academics
ISBR Business School
Bangalore

2. Chapter outline
• Effective Recruiting
• Selecting and training the sales force
• Time and territory Management
• Sales territories and sales quotas
• Compensating sales force
• Motivating the sales force
• Controlling the sales force
• Evaluating the sales force

3. Learning outcomes
After reading this chapter, you will be able to
understand
 What is effective recruiting ?
 How to select and train the sales force?
 How to devise sales territories and sales quotas ?
 What are the different compensation methods
available ?
 Why should we motivate the sales people ?
 How to control the sales & evaluate the sales force ?

4. Effective recruitment
• Recruiting and selection of sales personnel varies
from company to company
– Company Size
– Executives’ Personalities
– Departmental Structure
• Sources of Sales Force Recruits
– Sources within the company
– Sources outside the company

5. The recruiting effort
• Seeks Individual with minimum or general education
• Little or no experience
Trade Selling
• High caliber individuals with specialized education
• Equivalent qualification gained through job
experience
Missionary Selling
• High caliber Individuals with scientific or
engineering educationTechnical Selling
• Management looks for individuals with the required
abilities
New Business
Selling

6. Selecting the sales personnel
Reject
Preliminary
Interview
Relativedegree
ofhelpfulness
Expense
Formal Application
Interview(s)
Reference & credit checks
Physical examination
Testing
Employment offer
TimeTime

7. Selection process
• Interview
– Who should be doing the interviewing ?
– How many interviews ?
– Interviewing the spouse
• Interview techniques :
– Patterned interview
– Nondirective interview
– Interaction interview
– Rating scales

8. Types of tests
1. Test of ability :
– How well a person can perform particular tasks with maximum
motivation
– Mental ability ( intelligence test)
– Aptitude test ( special abilities )
2. Test of habitual characteristics :
– Gauge how prospective employees act in their daily work
normally
– Attitude, personality and interest test
3. Achievement Test :
– How much individuals have learned from their experience,
training or education

9. Training the sales force
Aim(s) Content Method(S) Execution Evaluation
Why ? What ? How ?
Who ?
When ?
Where ?
Recycle, Redesign, Modify and so forth

10. Philosophies of sales training
• Two philosophies of sales training
– Conditioned Response
• Behave in a standardized or programmed ways
– Insight Response
• Seeks to develop trainees insight and analytical skills
so that they respond appropriately
• Which philosophy is appropriate ?
– The choice depends upon predominant selling style
• Trade or Missionary – Conditioned response
• Technical or new business – Insight Response

11. Organization for sales training
• The execution step of ACMEE (the first ) requires
four key organizational decisions:
1. Who will be the trainees ?
2. Who will do the training ?
3. When will the training take place
4. Where will the training site be ?

12. Who will be the trainees ?
• Very complex for continuing than initial sales training
• Criteria to select the trainees :
Reward for good process
Punishment for poor
performance
Convenience of trainee and
trainer
Seniority (greater the seniority,
greater the opportunity for
added training)

13. Who will do the training
Initial
sales
training
Continuing
sales
training
Sales
training
staff
Training
the sales
training
Outside
experts

14. When will the training take place ?
• Timing group versus individual training
– Minority view
– Minority view inappropriate when technical selling is
involved
• Timing initial sales training programs :
– Depends upon
• The size of the sales force
• Sales personnel turnover
• Management’s plans for changing sales force size
• Timing continuing sales training programs
– Weaknesses lie in different areas, on the job coaching
– Several people are weak in the same area, use instructional
method

15. Sales Motivation is Critical
• Influenced by Sales Manager
• Even More Important for Salespeople
• Freedom of Supervison
• Lack of Faith in Themselves
• Lack of Faith in Their Brands

16. Motivation Includes
• Drive to Initiate Action on a Task
• Drive to Put Forth Sufficient Effort on a Task
• Persistence to Maintain Effort Over Time

17. Motivation is INTERNAL
• Manager Influences
• Manager Cannot Create
• Can Increase Chances
• But Easier to Destroy

18. Maslow
• You have had this before
• Physiological and Safety/Security Needs are First
– For Good Reason
• What Motivates Changes Over Time (and
Environment)
• Salespeople satisfied by pay are less interested in
higher pay

19. Herzberg
• Dissatisfaction must be removed before motivation
• Perceived Inequity in Pay,
• Company Policy,
• Working Conditions or Relationships kill motivation
• Removing Dissatisfaction Motivation

20. Herzberg #2
• Motivation is associated with:
– Achievement
– Recognition
– Challenging Work
– Advancement

21. Herzberg Useful?
• Have Clear Policies and Procedures
– Don’t have to be equal but must be seen as “fair”
• Pay is not a great motivator – but is a great
demotivator (Do Not Make Salary Info Public)
• Non Pay Factors are Key to Motivation

22. Expectancy Useful?
• Working Stupid Kills Motivation
• If Salesperson Thinks the Goal Cannot Be Reached
they Give Up or Cheat
• The Performance + Goal Link is Essential
• Are The Rewards Even Important to the Individual?

23. Expectancy Useful?
• Working Hard & Smart Are Both Critical
• Skills Training is Vital
• Do Not Ever Over-Promise
• Be Sure Everyone Has the Chance to Succeed
• Give Rewards People Want

24. Compensating sales personnel
• A sales compensation plan properly designed, has
three motivational roles :
1. Provide a living wage
2. Adjust pay level to performance
3. Provide a mechanism for demonstrating the congruency
between attaining company goals and individuals goals

25. Requirements of a good sales plan
1. Provides a living wage
2. Plan fits with the rest of the motivational program
3. The plan is fair
4. Easy to calculate own earnings
5. Adjusts pay to changes in performance
6. Economical to administer
7. Helps in attaining the objectives of the sales
organization

26. Types of compensation plans
Combination of
salary and
variable elements
Straight
commission
Straight salary

27. Straight salary plan
• More common among industrial goods companies
• Used for personnel engaged in trade selling
• Economical to administer, because of simplicity
• Provides freedom from financial uncertainties
• Disadvantages :
1. Do average job than outstanding job
2. Undercompensate productive salesperson and overcompensate
poor performers.

28. Straight commission plan
• Paid according to productivity
• Sales volume is the best productivity measure
• Falls under two category :
– Straight commission with sales personnel paying their own
expenses, advances may or may not be made against earned
commissions
– Straight commission with the company paying expenses,
with or without advances against earned commissions.
• Used in order getting than nonselling duties

29. Cont’d…
• Common in
– Clothing, textile, and shoe industries and in drug and
hardware wholesaling
• Applicable to firms selling intangibles :
– Insurance and investment securities, and manufactures of
furniture, office equipment and business machines.
• Advantages :
– Direct monetary incentive
– Means of cost control

30. Cont’d
• Disadvantages :
– Unless differential commission rates are used, sales
personnel push
• the easiest to sell Low margin items
• Neglect harder to sell high margin items
– Sales person’s efficiency may decline because of income
uncertainties

31. Combination salary and incentive plan
• Straight salary method :
– Lacks a financial means for stimulating the sales force to
greater effort.
• Straight Commission method :
– The executive has weak financial control over nonselling
activities
• Blending – management seeks control and motivation
• Actual results depends on management’s skills in
– Designing and administering plans

32. Use of Bonuses
• Bonuses are different from commissions
– It is an amount paid for accomplishing a specific task
• Commission :
– Varies in amount with sales volume or other commission
base
• Bonuses are
– Paid for reaching a sales quota
– Performing promotional activities
– Obtaining new accounts
– Following up leads

33. Sales territories
• Establishing sales terrioroties facilitates
– matching selling efforts with sales opportunities
• Territorial assignments lend direction to the planning
and control of sales operations
• Realistic sales planning is done on a territory-by-
territory basis
• Sales territory :
– Grouping of customers and prospects assigned to an
individual salesperson

34. Reasons for establishing or revising sales
territories
1. To provide proper market coverage
2. To control selling expenses
3. To assist in evaluating sales personnel
4. To contribute to sales force morale
5. To aid in the coordination of personal selling and
advertising efforts

35. Procedure for setting up or revising sales
territories
Selecting a basic geographical
control unit
Determining sales potential in
control units
Combining control units into
tentative territories
Adjusting for coverage difficulty
and restricting tentative territories

36. Territory shape (tentative territories

37. Sales quota
• Quantitative objectives assigned to sales
organizational units
• Quotas are devices for directing and controlling sales
operations
• In effective systems,
– Management bases quotas on information derived from
sales forecasts
– studies of market and sales potentials
– Cost estimates

38. Objectives in using quotas
To provide quantitative performance standards
To obtain tighter sales and expense control
To motivate desired performance
To use in connection with sales contests

39. • Differences in forecasting and budgeting procedure,
quotas fall into four categories :
1. Sales volume quotas
2. Budget
3. Activity
4. combination
Types of quota and quota-setting
procedures

40. Procedure for setting sales quota
• Sales volume quotas derived from
1. Territorial sales potential
2. Total market estimates
3. Past sales experience alone
4. Executive judgement alone
5. Compensation plan

41. Controlling sales personnel : evaluating and
supervising
Establishing
performance
standards
Recording
performance
Evaluating
performances
against the
standards
Taking action

42. Cont’d…
• Control has both static and dynamic facets
• Depending on the circumstances, management may
decide to take
1. “no action" now
2. Aimed to increase the degree of attainment of objectives
3. To revise the policy or plan or the strategies used in their
implementation to facilitate achievement of objectives
4. To lower or raise the objective standard or criteria for
measuring their degree of attainment.