Hair 1e Irm CH 01

CHAPTER 1
INTRODUCTION TO SALES MANAGEMENT

AND ITS EVOLVING ROLES
00001LEARNING OBJECTIVES
00001After reading this ha!ter" #$% sh$%&d 'e a'&e t$(
10. Summarize the basic responsibilities and evolving roles of sales management.
20. Demonstrate how sales managers can better integrate their roles with marketing management.
30. Identif and prepare for megatrends that will affect our future in sales management.
!0. "valuate the selection criteria for sales management and compare them to our present and
potential #ualifications.
$0. %nalze how the sales manager&s 'ob is e(panding and what it will mean for our career.
0LECTURE OUTLINE
I0. WHAT IS SALES MANAGEMENT?
)ew 'obs are more crucial to the ultimate success of a business than sales management because it
shapes and determines nearl all the firm&s interactions with customers. Sales managers oversee
the sales force*the direct income producers who determine the financial health of their
organizations.
+he %merican ,arketing %ssociation -%,%. defines sales management as /the planning0
direction0 and control of the personal selling activities of a business unit0 including recruiting0
selecting0 training0 e#uipping0 assigning0 routing0 supervising0 paing and motivating as these
tasks appl to the personal sales force.1 +his definition0 however0 fails to capture the fast2paced0
e(panding roles of sales management in satisfing customers and achieving compan ob'ectives.
II0. TYPES, TITLES, AND HIERARCHICAL LEVELS OF SALES MANAGERS
In some organizations0 the sales manager ma be little more than a supervisor of the sales force0 a
kind of /supersalesperson1 who shows the salespeople how best to do their 'obs. In other
organizations0 the sales manager is the marketing manager in all but name.
3ased on the eclectic tasks the perform0 sales managers give themselves various titles0 including
account manager0 problem solver0 channel manager0 business manager0 team leader0 group
pschologist0 resource coordinator0 sales department administrator0 change manager0 director of
income0 contact manager0 staff development specialist0 trainer4coach0 and customer relationship
manager.
+pical position titles and responsibilities of sales managers include5
6ice 7resident of Sales
8ational Sales ,anager
9egional0 Division0 or :one Sales ,anager
Copyright Houghton Mifflin Company. All rights reserved.
2 Chapter 1: INTRODUCTION TO SALES MANAGEMENT AND ITS EVOLVING ROLES
District0 3ranch0 or )ield Sales ,anager
Sales Supervisor
Table 1.1 Sales Management Hierarchies: Titles and Responsibilities
III0. RESPONSIBILITIES AND DUTIES OF SALES MANAGERS
Sales managers plan0 lead0 and control the selling activities of their organizations.
+he continuousl monitor and ad'ust their marketing strategies to various changing
macro!"#ro!m!$ factors -technological0 competitive0 economic0 legal0 cultural0 and ethical.
and the compan&s %$a&'o()r% -emploees0 suppliers0 financial communit0 media0
stockholders0 special interest groups0 governments0 and the general public..
% brief preview is provided below on the responsibilities and duties of sales managers based on
each chapter.
Figure 1.1 Responsibilities and Duties of Sales Managers: A Conceptual Frameor!
%0. T*!$+,F#r%$,C!$-r+ Sa(% Forc Ma!a.m!$
;hapters 1<! will help ou understand the overall roles of sales managers -;hapter 1/ and
salespeople -;hapter !.0 and the need for professional and ethical behavior -;hapter 2.
while building customer relationships and partnerships -;hapter 3..
30. Or.a!#0#!. a!) D"(o1#!. $' Sa(% Forc
10. Sales forecasting and budgeting -;hapter $. supports sales management decisions and
activities0 which are critical to the success of an organization.
S
ales managers must estimate mar!et potential for their industr and sales
potential for their compan before developing a final sales forecast on which to
base operational planning and budgeting for their sales force.
S
ales managers emplo both #uantitative and #ualitative approaches for sales
forecasting.
3
ecause funds are needed to implement an sales plan0 sales budgets are essential.
% sales budget is a financial plan of e(penditures needed to accomplish the
organization&s goals and ob'ectives. It ensures that organizational resources are
allocated in the most efficient and effective wa over the period of the plan.
20. Sales force planning and organizing -;hapter =. provides guidelines and direction for
most other sales decisions and activities.
%s planners0 sales managers must set sales goals and ob'ectives0 establish sales
policies and procedures0 devise sales force strategies and tactics0 and implement
controls to ensure that sales goals and ob'ectives are achieved.
%
s organizers0 sales managers must determine the optimal number of salespeople
to hire and the best wa to structure the sales force -geographicall0 b product0
b customer tpe0 or b some combination of these factors..
30. Time and territory management strategies -;hapter >. help sales managers determine
which accounts their salespeople should call on0 when0 and how often.
Chapter 1: INTRODUCTION TO SALES MANAGEMENT AND ITS EVOLVING ROLES 3
+
o effectivel allocate sales force efforts0 the sales manager must first design sales
territories. % sales territor" is a market segment or group of present and potential
customers who usuall share some common characteristics relevant to purchasing
behavior.
+
erritories should be compared on the basis of sales potential0 which in turn
decides individual sales #uotas -the motivational targets assigned to the sales
force as a whole and to salespeople individuall..
%
fter sales territories have been determined0 management ma design a formal
routing pattern for salespeople to follow in calling on customers.
!0. Recruiting and selecting the sales force -;hapter ?. includes identifing sources of
potential sales recruits0 methods of reaching them0 and strategies for attracting them to
appl for a sales 'ob.
@
nce applicants have been recruited0 the sales manager must devise a sstem for
measuring candidates against predetermined 'ob re#uirements using numerous
tools and techni#ues.
)
inall0 the decision to select or re'ect each applicant must be made.
;0. Ma!a.#!. a!) D#rc$#!. Sa(% Forc E22or$%
10. +raditionall0 training the sales force -;hapter A. has focused mainl on selling
techni#ues. Biven that customers toda are more knowledgeable than ever0
competition is more intense0 and customers are demanding more service0 progressive
companies have broadened and intensified their sales force training. In designing a
training program0 the sales manager must answer several #uestions5
C
ho should receive the trainingD
C
ho should do the trainingD
C
here0 when0 and how should the training be accomplishedD
C
hat should be taughtD
20. Sales force leadership -;hapter 10. ma be thought of as the emotional process of
e(ercising pschological0 social0 and inspirational influence on individual salespeople
and the sales force collectivel toward the achievement of organizational ob'ectives0
goals0 and values.
Supervision0 management0 and leadership are all related but #uite different concepts.
a0. Supervision entails performing tasks that deal with monitoring the dail work
activities of subordinates.
b0. ,anagement is primaril a learned process whereb subordinates are guided b
formall prescribed duties toward achieving organizational goals.
c0. In contrast0 leadership is more of an emotional process that involves the
e(ercising of pschological0 social0 and inspirational influence on salespeople.
S
everal different theories0 concepts0 and approaches to effective sales force
leadership are e(plored.
30. Sales force motivation -;hapter 11. deals with the set of dnamic interpersonal
processes that stimulate the initiation0 direction0 intensit0 and persistence of work2
related behaviors of salespeople toward attaining organizational goals and ob'ectives.
S
everal theories of motivation offer different e(planations for wh salespeople
e(ert high levels of effort under varing circumstances to reach personal and
organizational goals.
C
e analze three tpes of theories -content0 process0 and reinforcement oriented..
D
epending on the situation and the composition of the sales force0 sales managers
will need to e(ercise their individual 'udgments in deciding which motivation
approach applies best.
!0. Sales force compensation -;hapter 12. is widel recognized as the most important and
least ambiguous wa to motivate salesperson performance. It can be viewed as all
monetar paments and benefits used to remunerate and influence the performance of
salespeople.
,
ost companies use three main methods5
a0. Straight salary*a fi(ed amount of mone at fi(ed intervals0 such as weekl or
monthlE
b0. Straight commission*an amount that varies with results0 usuall sales or profits5
and
c0. Combination*a mi( of salar and commission.
F
inancial compensation also should include reimbursement of sales e(penses and
transportation.
$
on%financial incenti&es ma include use of a compan car0 office space0
secretarial help0 and special compan benefits such as life insurance0 a retirement
plan0 and health care.
D0. Co!$ro((#!. a!) E"a(-a$#!. Sa(% Forc Pr2orma!c
10. Sales volume, costs, and profitability analysis -;hapter 13. is essential to assure the
organization&s bottom2line goal of improving profitabilit.
S
ales managers need to analze sales volume0 costs0 and profit relationships b
product lines0 territories0 customers0 and salespersons as well as across sales and
marketing functions.
20. Sales force performance evaluation -;hapter 1!. must be measured and evaluated to
determine commissions and bonuses for salespeople and to make promotion decisions.
+
he overall purpose of performance evaluation0 however0 is to improve
organizational profitabilit b improving sales force productivit.
F
sed b sales managers to take corrective actions to improve performance.
I60. E3PANDING ROLES OF SALES MANAGERS
In 200!0 the board of directors of the %merican ,arketing %ssociation approved a new definition5
/,arketing is an organizational function and a set of processes for creating0 communicating0 and
delivering value to customers and for managing customer relationships in was that benefit the
organization and its stakeholders.1
3ased on this definition0 there are three ma'or implications for sales force management5
%0. Ma!a.#!. C-%$omr R(a$#o!%'#1%
;ontemporar marketing is moving from a transaction2orientation to a customer2
relationship2building orientation. +hus0 c-%$omr r(a$#o!%'#1 ma!a.m!$ -;9,. is the
best wa to earn purchasing loalt0 and loal customers are more profitable than non2loal
customers.
;9, can be defined as /a cross2functional process for achieving a continuing dialogue with
customers0 across all their contact and access points0 with personalized treatment of the most
valued customers0 to increase customer retention and the effectiveness of marketing
initiatives.1
30. Sr"#!. a% C-%$omr Co!%-($a!$%
Sales managers are training salespeople to think longer term b striving to build ongoing
relationships and mutuall profitable partnerships with customers.
Salespeople are being asked to go beond merel selling0 toward serving and a role more
like that of customer consultant and business partner.
Sales managers are responsible for helping their salespeople devise and carr out strategies
for building these profitable long2term relationships with customers.
;0. Ma!a.#!. $' H+4r#) Sa(% Forc
Instead of merel directing the field sales force0 man sales managers now oversee
salespeople across multiple online and offline marketing channels.
+he work with telesalespeople0 telemarketers0 e2commerce salespeople0 direct mailers0
international salespeople0 missionar salespeople0 technical salespeople0 manufacturers&
agents0 and multicultural and international salespeople.
In this era of closer customer relationships and multiple sales channels0 such hbrid sales
forces will be more common0 and sales managers will need to develop the diverse skills to
lead them.
60. WHAT 5UALITIES ARE NEEDED TO BE A SALES MANAGER?
Successful sales managers toda need to be5
"ffective leaders and motivators of people
Bood decision makers
;reative problem solvers
@utstanding communicators
Cilling to work closel with other functional areas of business
;ontinuousl monitoring competitive offerings and strategies
%lert to market opportunities and challenges to take timel actions to enhance sales force
productivit and profitabilit
6I0. INTEGRATING SALES MANAGEMENT AND MAR6ETING MANAGEMENT
Sales management is a specialized set of responsibilities and activities within the larger field of
marketing management. In a broad sense0 sales managers are reall mar!eting managers with the
specific task of managing the sales force.
%0. T' F#() Sa(% Forc a!) Ha)7-ar$r% Mar&$#!. S-11or$ Tam
%n organization&s marketing team usuall consists of two basic groups5 -1. the field sales
force and -2. the head#uarters marketing support team.
+his head#uarters support includes contributions from the following areas5
A)"r$#%#!.. ;oordinates product or service advertising0 usuall through an outside
agenc
Sa(% 1romo$#o!. Develops brochures0 catalogs0 direct2mail pieces0 and special
promotions
Sa(% a#)%. 7repares videos0 podcasts0 product samples or prototpes0 flip charts0
7ower7oint presentations0 and other audio2visual materials for sales presentations
Tra) %'o*%. ;oordinates arrangements for participation in e(hibits and trade shows
Pro)-c$ 1-4(#c#$+. 7repares and distributes news releases to various media about
products and services
Mar&$#!. r%arc'. ;ollects and interprets data about markets0 products0 customers0
sales0 competitors0 and other factors
Mar&$#!. a!) %a(% 1(a!!#!.. %ssists in the preparation of marketing and sales
ob'ectives0 strategies0 and tactics
Forca%$#!.. 7repares sales forecasts and predicts market trends
Pro)-c$ 1(a!!#!. a!) )"(o1m!$. Gelps in planning0 developing0 and testing new
and improved products
Mar&$ )"(o1m!$. 7rovides support for deeper penetration of current markets and
entering new markets
P-4(#c r(a$#o!%. "(plains the actions of the sales force to the compan&s various
stakeholders0 including emploees0 the media0 special interest groups0 suppliers0
government agencies0 legislators0 the financial communit0 compan stockholders0 and
the general public
I!$r!$ comm-!#ca$#o!%. %ssists with online customer service0 website
development0 and customer databases
30. I!$.ra$) Mar&$#!. Comm-!#ca$#o!
+he coordination of promotional elements -advertising0 personal selling0 sales promotion0
direct marketing0 and public relations. and other marketing efforts is called #!$.ra$)
mar&$#!. comm-!#ca$#o! -I,;..
7ersonal selling is the most important and highest2cost component of the promotional mi(
for business2to2business selling. +hus0 sales managers should work closel with other
promotional mi( areas in integrating the firm&s message for its target customers.
6II0. MONITORING AND ADAPTING TO THE MACROENVIRONMENT
Sales managers must respond to the concerns of their compan&s stakeholders*including
emploees0 suppliers0 the financial communit0 media0 stockholders0 special interest groups0
government0 and the general public. In addition0 sales managers must continuousl monitor the
macroenvironment -technolog0 econom0 competition0 political2legal0 and culture. and ad'ust to
these changing domestic and global variables because the can sharpl affect sales.
%0. M.a$r!)% A22c$#!. Sa(% Ma!a.m!$
Sales managers need to be aware of several megatrends to which the must adapt in order to
enhance the effectiveness and efficienc of the sales force. +hree ma'or forces*beha&ioral'
technological0 and managerial*are influencing buer2seller relationships and the wa that
selling is carried out.
Table 1.( Megatrends Affecting Sales Management
10. B'a"#ora( Forc%
3uers& attitudes0 preferences0 and behaviors0 as well as competitors& efforts0 are
changing #uickl0 thus necessitating that sales managers sta fle(ible and able to
modif their selling strategies and approaches. Several behavioral megatrends e(ist.
a0. Mor E81r$ a!) Dma!)#!. B-+r%
% talented new tpe of sales managers is needed to guild relationships with
professional buers0 buing committees0 and consumers who are treating more
purchases like long2term investments.
b0. R#%#!. C-%$omr E81c$a$#o!%
Successful sales managers must not become defensive about their compan&s
products but tr to look at their offerings from the perspective of their most
critical customers.
c0. M#cro,S.m!$a$#o! o2 Dom%$#c Mar&$%
%merica is becoming increasingl multicultural and multilingual. Sales managers
who do not understand this rich mi( of wants and needs will miss reaching
several large0 fast2growing markets.
d0. E81a!)#!. Po*r o2 G#a!$ R$a#(r%
@nl a few retailers toda account for over half of total retail sales. Harge retail
organizations have been and are continuing to gain an increasing share of the
consumer&s dollar. %s these giant retailers have grown bigger and e(ceed the size
and power of the manufacturers that suppl them0 the dictate the buer2seller
relationships within the suppl chain.
e0. Em1o*rm!$ o2 C-%$omr%
Hike salespeople0 customers are also being empowered b the Internet and their
use of computers -whether desktop0 notebook0 hand2held0 or pocket versions.0
multi2function cell phones0 kiosks0 and desktop video conferencing. Cith their
new empowerment0 customers are becoming more knowledgeable0 e(pert0 and
demanding in their purchasing.
f0. 0G(o4a(#0a$#o! o2 Mar&$%
+he economic health of the Fnited States now depends partiall on how well
sales managers do their 'obs as competition from foreign products and services
intensifies.
20. 0Tc'!o(o.#ca( Forc%
+oda&s successful sales managers are those who can make skillful and efficient use of
technolog to increase their efficienc and productivit in serving customers. +hese
include5
a0. Sa(% Forc A-$oma$#o!
%mong the most important of the technological innovations in sales force
automation are5
7
ortable computers
"
lectronic data interchange
6
ideo conferencing
,
ulti2function cell phones and satellite pagers
Chapter 1: INTRODUCTION TO SALES MANAGEMENT AND ITS EVOLVING ROLES
6
oice mail
"
lectronic mail
I
nstant messaging
1! Chapter 1: INTRODUCTION TO SALES MANAGEMENT AND ITS EVOLVING ROLES
b0. V#r$-a( Sa(% O22#c%
;onducting business from home0 automobile0 or virtuall anwhere
c0. E(c$ro!#c Commrc
I
nternet
3
logs
7
odcasting
S
creen2sharing
C
eb"(
I
ntranet
"
(tranet
30. Ma!a.r#a( Forc%
In response to the dnamic behavioral and technological megatrends0 sales managers
are tring various strategies to achieve profitable sales growth and closer customer
relationships.
a0. 0E22or$% $o R)-c S((#!. Co%$%
"mphasis on decreasing the cost of a sales call.
b0. 00S'#2$ $o D#rc$ Mar&$#!. A($r!a$#"%
+o sell to organizational buers0 there are several direct marketing alternatives
that can support or bpass field salespeople. +hese include5
d
irect mail
t
elemarketing
t
eleselling
k
iosks -or /computer salespeople1.
f
acsimile
p
ersonalized email
c0. 00Cr$#2#ca$#o! o2 Sa(%1o1(
3ecause of the public&s negativism toward personal selling0 efforts have been
directed at certifing sales personnel.
;ertification usuall re#uires a salesperson to gain a certain amount of practical
e(perience0 enroll in educational seminars and courses0 pass a sales competenc
e(am0 provide some professional references0 and agree to compl with a code of
conduct.
d0. S'or$a. o2 B-%#!%%,$o,B-%#!%% Sa(%1o1(
)ewer #ualified salespeople available.
e0. D"(o1m!$% #! I!2orma$#o! Ma!a.m!$
6arious software and #uantitative analsis tools are available to help sales managers better
understand and sell to their diverse customers.
6III0.

INFORMATION MANAGEMENT TOOLS
%mong the most widel used information management tools -all discussed in ;hapter 3. are5
%0. Da$a4a% mar&$#!.
30. Da$a *ar'o-%#!.
;0. Da$a m#!#!., a!)
D0. P-%' $c'!o(o.+
II0. HOW WELL ARE SALES MANAGERS PERFORMING?
Some ma'or reasons wh some sales managers ma fail to perform at higher levels are5
%0. I((o.#ca( S(c$#o! o2 Sa(% Ma!a.r%
Illogicall appointing successful salespeople to sales management even though the ma not
have the various skills re#uisite to manage at different sales management levels5 supervisor
abilit at lower levelsE managerial skills at mid2levelE and administrative and leadership
skills at upper levels.
Figure 1.( Sales Management Hierarch": S!ill and Abilit" Re#uirements
30. I!a)7-a$ Sa(% Ma!a.m!$ Tra#!#!.
%lthough man companies spend thousands of dollars to train new salespeople0 man of
these same companies fail to train sales managers ade#uatel. In studies of sales managers
from a cross section of si(teen industries0 fewer than half indicated that their companies
provided an sales management training at all. %s the linchpin between the selling and
buing organizations0 sales managers are too essential to organizational success to be
e(cluded from managerial training.
;0. Lac& o2 a Lo!.,R-! C-%$omr R(a$#o!%'#1 Or#!$a$#o!
Sales managers and salespeople who have a narrow selling orientation tend to focus on
products and the immediate sale*that is0 the emphasize their own needs0 not those of
customers. +o be successful toda necessitates a customer relationship orientation that
focuses on the buer&s needs and development of long2term mutuall beneficial
relationships and partnerships.
D0. I!%-22#c#!$ B(!)#!. o2 Sa(%, Mar&$#!., a!) F#!a!c#a( 6!o*().
)irms toda are looking for versatile0 well2rounded sales managers with strong marketing
and financial knowledge. +o do their 'obs well0 sales managers need profit information b
customer0 product0 territor0 and other market segments. +raining in finance and operations
as well as marketing will help prepare sales managers for promotion to higher management
levels.
I0. DEVELOPING SALES MANAGERS FOR THE NEW MILLENNIUM
+o succeed in the ears ahead0 sales managers will need to focus on50
a0. Developing closer relationships with customers0 both domesticall and internationall0 and
to ac#uire more in2depth understanding of their different businesses and organizational
cultures
b0. +reating salespeople as newl empowered e#uals and partnering with them in achieving
sales0 profitabilit0 and customer satisfaction4loalt goals
c0. %ppling fle(ible motivational skills in working with a multicultural0 hbrid sales force of
telemarketers0 telesellers0 missionar salespeople0 direct marketers0 manufacturers& agents0
field salespeople0 international salespeople0 and others
d0. Jeeping up2to2date on the latest technologies affecting buer2seller relationships
e0. Hearning marketing and financial skills in order to identif potential business opportunities
and recommend competitive strategies
f0. Corking closel with other internal departments as a member of the total corporate team
dedicated to satisfing customers profitabl
g0. ;ontinuall seeking was to e(ceed customer e(pectations and bring added &alue profitabl
to the ongoing buer2seller relationships
h0. ;reating a fle(ible0 learning0 and adapting environment for all members of the sales team
00001)E* TERMS
Sa(% Ma!a.m!$9+he function of planning0 directing0 and controlling the personal selling activities
of a business unit0 including recruiting0 selecting0 training0 e#uipping0 assigning0 routing0 supervising0
paing0 and motivating as these tasks appl to the sales force.
Macro!"#ro!m!$9Hargel uncontrollable factors*such as technolog0 competition0 econom0
laws0 culture0 and ethics*that are continuousl changing and to which sales managers must adapt in
overseeing the sales force.
S$a&'o()r%9;ompan emploees0 suppliers0 the financial communit0 the media0 stockholders0
special interest groups0 governments0 and the general public*all of whom have a stake0 interest0 and
fre#uentl an opinion about sales force activities.
Mar&$#!.9%n organizational function and a set of processes for creating0 communicating0 and
delivering value to customers and for managing customer relationships in was that benefit the
organization and its stakeholders.
C-%$omr R(a$#o!%'#1 Ma!a.m!$ -;9,.9% compan2wide effort to satisf customers across all
/touch1 points and provide personalized treatment of the most valued customers in order to increase
customer retention and profitabilit.
I!$.ra$) Mar&$#!. Comm-!#ca$#o! -I,;.9+he coordination of promotional elements
-advertising0 personal selling0 sales promotion0 public relations0 direct marketing0 and publicit. with
other marketing mi( elements -product0 pricing0 and distribution..
Sa(% Forc A-$oma$#o! -S)%.9+he use of high2tech sales tools b salespeople to work more
effectivel and efficientl.
REVIE+ AND A,,LICATION E-ERCISES
01. )h" and ho do "ou thin! the sales manager*s +ob ill change as e mo&e further into the
tent"%first centur", -./ 01
3ased on the three ma'or categories of sales2related megatrends*beha&ioral' technological0 and
managerial2discussed in the chapter0 to be successful in the new millennium0 sales managers
will need to learn new roles and reinvent some old ones0 such as -1. developing closer
relationships with customers0 both domesticall and internationall0 and more in2depth
understanding of their different businesses and organizational culturesE -2. treating salespeople as
newl empowered e#uals and partnering with them in achieving sales0 profitabilit0 and customer
satisfaction4loalt goalsE -3. appling fle(ible motivational skills in working with a multicultural0
hbrid sales force of telemarketers0 telesellers0 missionar salespeople0 direct marketers0
manufacturers& agents0 field salespeople0 international salespeople0 and othersE -!. keeping up2to2
date on the latest technologies affecting buer2seller relationshipsE -$. learning marketing and
financial skills in order to identif potential business opportunities and recommend competitive
strategiesE -=. working closel with other internal departments as a member of the total corporate
team dedicated to satisfing customers profitablE ->. continuall seeking was to e(ceed
customer e(pectations and bring added &alue profitabl to the ongoing buer2seller relationshipsE
and -?. creating a fle(ible0 learning0 and adapting environment for all members of the sales team.
02. 3)hat domestic and global forces or megatrends are affecting sales managers no and in the
foreseeable future, -./ 41
Several ine(orable forces or megatrends that will continue to dramaticall impact sales
management fall into three ma'or categories*beha&ioral' technological0 and managerial
dimensions.
a0. B'a"#ora( Forc%: %mong the most important megatrends affecting the sales manager&s
'ob are changing behavioral forces0 which are leading to more e(pert and demanding buers0
rising customer e(pectations0 globalization of markets0 empowerment of customers0 and
micro2segmentation of domestic markets. 3ecause customers become increasingl
empowered and their purchasing e(pectations rise0 the are becoming more sophisticated in
their purchasing decisions and intolerant of poor product #ualit or service.
b0. Tc'!o(o.#ca( Forc%. Cith F.S. firms and consumers spending over K!00 billion annuall
on computer hardware0 software0 and technolog services0 sales managers and their
salespeople have their work cut out for them in tring to keep up with the technolog their
prospects and customers are using. Sales managers who make skillful and efficient use of
swiftl developing sales force automation technolog to increase the productivit of their
salespeople in selling to and serving customers are most likel to be successful in the ears
ahead.

Sales managers must adopt innovations that promise to cut costs and increase
efficienc to keep pace with customers. 8o compan can afford to lag behind in adopting
technological advances that can increase its effectiveness and efficienc in profitabl
satisfing customers.
c0. Ma!a.r#a( Forc%. ,anagerial forces are also changing sales organizations0 which are
responding to these megatrends b tring various strategies such as reducing selling costs0
shifting from field selling to direct2marketing alternatives0 hiring and developing specialized
sales personnel to cope with the shortage of business2to2business -323. salespeople0
re#uiring salespeople to obtain professional certification to enhance their credibilit with
customers0 and using the latest developments in information management.
03. 35ou or! for a large machine tool manufacturer and ha&e been recentl" promoted from the
sales force to the position of sales manager in another region. Ho ould "ou ensure a good
or!ing relationship ith "our salespeople and the head#uarters mar!eting staff, -./ 61
+o accomplish marketing goals and ob'ectives0 it is essential that an organization&s marketing
team -the field sales force and the head#uarters marketing team. function effectivel and
efficientl. +he efforts of the two groups will be significantl enhanced b a cooperative
relationship. +he field sales force will benefit from the support and service functions provided b
the head#uarters marketing team. Hikewise0 the head#uarters marketing team will benefit from the
market knowledge and current e(perience of the field sales force.
+o ensure a good working relationship between the two groups0 open lines of communication are
essential. % friendl0 cooperative organization climate must also be established.
Specific steps that could be taken b a new sales manager recentl promoted to the position
include5
a0. Determine the nature of the present working relationship between the two groups.
b0. If unsatisfactor0 work toward the elimination of rivalr and indifference.
c0. 7romote an understanding b head#uarters people of sales force activities -i.e.0 e(plain how
each re#uested service is to be used..
d0. ,onitor the relationshipE adopt a proactive stance.
0!. 3)hat criteria ould "ou propose for progressi&e companies to use in selecting salespeople for
promotion to sales manager, -./ 61
Chen selecting a salesperson for promotion to sales manager0 it is imperative that the candidate
have the credentials and e(hibit the skills to perform the various sales management tasks. +he 'ob
of a sales manager differs significantl from that of a salesperson. +he tasks sales managers
perform include5 building customer relationships and partnershipsE sales forecasting and
budgetingE sales force planning and organizingE devising time and territor management
strategiesE recruiting and selecting the sales forceE training0 leading0 motivating the sales force0
and compensating the sales forceE sales volume0 costs0 and profitabilit analsisE and sales force
performance evaluation. Despite articles b marketing scholars and practitioners who stress that a
supersalesperson does not necessaril make a good sales manager0 the reward for a sales rep who
does an outstanding selling 'ob for a couple of ears or so is still usuall promotion to sales
management. Ironicall0 the ver skills that enable a person to be an e(cellent salesperson ma
inhibit him or her from being a good sales manager. %s sales managers climb the sales
management hierarch0 the skills needed to e(cel on the 'ob change from supervisor skills at
lower levels0 to managerial at mid2levels0 to administrative skills at the upper levels of sales
management. Similarl0 leadership skills increase progressivel. Gowever0 at all levels0
interpersonal skills are critical to serving effectivel as the vital link between the sales force and
higher management.
0$. 3)hat !ind of training ould "ou pro&ide to ne sales managers, )hat about additional training
for more e7perienced sales managers, -./ 1' (' 01
+raining for both new and more e(perienced sales managers should be a continual processE it
should be incorporated into the activities of the entire organization. Sales managers should not be
led into thinking that training can occur at one point in time and be sufficient to last throughout
their careers.
8ewl appointed sales managers especiall can fail to perform at higher levels due to -1. illogical
selection of sales managersE -2. inade#uate sales management training programsE -3. lack of a
long2run customer relationship orientation in handling sales operationsE and -!. insufficient
blending of sales0 marketing0 and financial knowledge
Salespeople who have done an outstanding selling 'ob are usuall selected for promotion to sales
management. +his ma not necessaril be a good decision because supersalespeople ma be ill
prepared to perform effectivel as sales managers*a 'ob that re#uires a ver different skill2set
from that of a salesperson.
;ompounding the problem of poor selection criteria for promotion to sales management is the
inade#uac of sales management training programs. Chile man companies spend thousands of
dollars to train new salespeople0 man of these same companies fail to train sales managers
ade#uatel. %s the linchpin between the selling and buing organizations0 sales managers are too
essential to organizational success to be e(cluded from managerial training. +hus0 developing
effective sales training programs for both new and e(perienced sales managers is an important
part of top management&s duties. )or sales managers who are familiar with compan policies and
product offerings0 training should focus primaril on the development of super&isor"' managerial
and administrati&e skills. +he development of interpersonal and leadership s!ills0 and those skills
and abilities relating to the basic functions of the sales manager&s 'ob0 are of critical importance.
,an sales managers still give little more than lip service to developing long2run customer
relationships0 which is necessar to be successful in the current business environment. Indeed0
man sales managers have a narrow selling orientation and tend to focus on products and the
immediate sale*that is0 the emphasize their own needs0 not those of customers. In contrast0
training on how to develop a customer relationship orientation that focuses on the buer&s needs
and development of long2term mutuall beneficial relationships and partnerships would have to be
incorporated in sales manager training programs.
,arketing and financial knowledge are becoming re#uirements for sales management positions in
progressive companies. Indeed0 man firms look for versatile0 well2rounded sales managers who
not onl understand and can implement overall marketing strategies0 but also those that have
strong financial capabilities. Cith financial skills0 sales managers can evaluate the relative
profitabilit of the product lines being marketed. +o do their 'obs well0 sales managers need profit
information b customer0 product0 territor0 and other market segments. @therwise0 the will tend
to focus on generating the largest sales volume0 which ma be more unprofitable for the compan
than smaller0 more specialized sales.
;ross2disciplinar training is one approach to achieving organizational snergism. 3road
managerial training in several functional areas can greatl increase the value of sales managers to
their companies and help prepare them for promotion to higher management levels.
0=. 38f "ou ere the &ice president of sales or the national sales manager for a large corporation'
hat criteria ould "ou use to e&aluate the performance of subordinate sales managers, -./ 1'
(' 61
+he evaluation of subordinate sales managers should be based primaril on the tasks the are
charged with performing0 such as sales forecasting and budgetingE sales force planning and
organizingE devising time and territor management strategiesE recruiting and selecting the sales
forceE training0 leading0 motivating0 and compensating the sales forceE sales volume0 costs0 and
profitabilit analsisE and sales force performance evaluation. Gowever0 successful sales
managers should also be evaluated on their abilit to build customer relationships and
partnerships0 which lead to recurring sales.
%s sales managers climb the sales management hierarch0 the skills needed to e(cel on the 'ob
change from supervisor skills at lower levels0 to managerial at mid2levels0 to administrative skills
at the upper levels of sales management. +hus0 sales managers should also be evaluated on
super&isor"' managerial and administrati&e skills based on their respective sales management
levels.
"valuating the performance of the sales manager might include several #uantitative criteria0
including5
a0. ;ontribution to profit
b0. 9eturn on assets managed
c0. Sales to costs ratio
d0. ,arket share gains
e0. %chievement of compan marketing goals and ob'ectives
+he above criteria are much preferred to simpl compressing everthing into sales volume goals0
which often stress short2run results0 to the long2run detriment of the organization.
0>. 3)rite a +ob description for the position of sales manager. )hat responsibilities and duties do
"ou consider most important, )h", -./ 11
Sales managers& responsibilities var widel0 so the 'ob description for a specific sales
management position should var accordingl. Depending on the nature of the organization and
the attitude of top management toward the sales function0 the sales manager&s responsibilities and
duties var on a long continuum.
Sales managers are paid to plan0 lead0 and control the personal selling activities of an
organization. In carring out these responsibilities0 sales managers -1. prepare sales plans and
budgetsE -2. set sales force goals and ob'ectivesE -3. estimate demand and forecast salesE -!.
determine the size and structure of the sales force organizationE -$. recruit0 select0 and train
salespeopleE -=. design sales territories0 set sales #uotas0 and define performance standardsE ->.
compensate0 motivate0 and lead the sales forceE -?. conduct sales volume0 cost0 and profit
analsesE -A. evaluate sales force performanceE and -10. monitor the ethical and social conduct of
the sales force. +he most important responsibilit ma be in managing the critical
revenue2generating function0 which ultimatel determines the success or failure of the overall
marketing plan.
0?. 3Describe ho sales managers can use the latest telecommunications technolog" and
de&elopments in information management to more effecti&el" and efficientl" lead and direct the
sales force. -./ 4' 01
Sa(% 2orc a-$oma$#o! -S)%. is the use of high2tech tools that help salespeople work effectivel
and efficientl. Sales managers who make skillful and efficient use of swiftl developing S)%
technolog to increase the productivit of their salespeople are most likel to be successful in the
ears ahead. %mong the important technological innovations for sales management are5
7ortable computers -notebook0 hand2held0 and pocket 7;s.
6oice mail0 e2mail0 and instant messaging
"lectronic data interchange
6ideo conferencing -via desktop0 laptop0 or hand2held computers.
,ulti2function cell phones and satellite pagers
Internet -blogs0 podcasting0 screen sharing0 and Ceb"(.
"(tranets
Intranets
6irtual sales offices
,ore and more sales and sales management activities can be performed outside the traditional
office due to advances in technolog. Cith salespeople spending a great deal of time on the road0
technolog onl benefits them when the can take it with them. 8otebook and hand2held
computers0 pagers0 and cellular phones are giving salespeople more autonom and enhancing their
productivit.
6irtual sales offices are not onl improving the efficienc of the sales force0 but lowering costs as
well. )or e(ample0 firms are using online or Internet2based learning to keep salespeople in the
field and save millions of dollars in training and travel each ear. Salespeople ma use their
notebook 7;s and Internet connection to dial into a one2 or two2hour training session from their
home or hotel. +his training session allows them to participate in a real2time0 full interactive
classroom discussion. Salespeople get the information the need #uickl and convenientl0 and
the satisfaction of staing in the field*a place where the immediatel put their training to the
test. If a compan has several thousand salespeople around the world0 travel costs alone to bring
them together would be in the millions of dollarsL
0A. 3Ho might sales managers use the latest technological de&elopments in information
management to better satisf" and impro&e relationships ith prospects and customers, -./ 4' 01
%s noted in the answer to the previous #uestion0 sales managers can swiftl adopt sales force
automation -S)%. technolog not onl for increasing the productivit of their salespeople0 but
also to help their sales force better serve and satisf their customers and0 in the process0 improve
and develop long2term customer relationships. )or e(ample0 instant messaging is being used b
sales managers to #uer customers as well as inform customers about new product introductions
and special promotions without picking up the phone or logging into e2mail. %dditionall0 sales
managers emplo the latest technological developments for data collection and analsis to serve
their customers. %mong the most widel used of these information management tools are database
marketing0 data warehousing0 data mining0 and push technolog0 which are discussed in ;hapter
3.
010. 3Assume "ou are the national sales manager for a medium%si9e compan". Ho ill "ou impro&e
the selection and preparation process for ne sales managers, /utline a training process'
including topics to co&er' to pro&ide ne sales managers ith the !noledge and s!ills to
succeed. -./ 1' (' 4' 6' 01
3ased on concepts discussed in this chapter0 a logical starting point for improving the selection
and preparation process for new sales managers should begin b screening 'ob applicants for the
skill2set re#uired for this 'ob0 which is #uite different from those needed to be a super salesperson.
)irst and foremost0 it would be important to select the 'ob applicant who displas supervisor0
managerial0 and administrative skills. In addition0 the applicant should have leadership and
interpersonal skills.
+he ma'or tasks of sales management include5 sales forecasting and budgetingE sales force
planning and organizingE devising time and territor management strategiesE recruiting and
selecting the sales forceE training0 leading0 motivating0 and compensating the sales forceE sales
volume0 costs0 and profitabilit analsisE and sales force performance evaluation. +hus0 training
should ideall focus on these central tasks that sales managers perform. Gowever0 the role of the
sales manager has been constantl e(panding. +o be successful toda0 sales managers need to
have a skill2set that goes beond knowledge of the traditional sales management areas identified
above. +his newer0 more contemporar skill2set should include knowledge of customer
relationship management that focuses on delivering value0 as well as a customer relationship
orientation that focuses on the buer&s needs and development of long2term mutuall beneficial
relationships and partnerships. In line with their compan&s ;9, orientation0 contemporar sales
managers direct their salespeople to go beond merel selling and more toward serving as
customer consultants and business partners. +he sales manager should also be adept at managing a
hbrid sales force across multiple online and offline marketing channels. +he should be able to
work with telesalespeople0 telemarketers0 e2commerce salespeople0 direct mailers0 international
salespeople0 missionar salespeople0 technical salespeople0 manufacturers& agents0 and
multicultural and international salespeople. +he sales management training program should also
focus on increasing the understanding of how the success or failure of the overall marketing plan
lies in the abilit to successfull integrate marketing and sales*specificall how the sales and
marketing departments can work together to attain the compan&s goals.
Sales management training programs should also encompass the development of financial skills to
analze profit and costs information b customer0 product0 territor0 and other market segments
instead of merel focusing on sales volume. Cith organizations being trimmed and and
organizational laers reduced0 sales managers should be trained on how to develop empowerment
programs in which salespeople are treated as newl empowered e#uals and partnering with them
in achieving sales0 profitabilit0 and customer satisfaction4loalt goals. %nd finall0 the training
programs should also ensure that sales managers are able to deplo sales force automation
technologies to increase the productivit of their salespeople as well as communicate with a sales
force that works out of virtual sales offices. ;overage of the topics identified above can augment
the sales managers& skill2set0 enabling them to succeed in this highl competitive marketplace.
00001INTERNET E-ERCISE
Fse an Internet search engine -e.g.0 Boogle or MahooL. to find three companies that are marketing sales
management training courses. )or each course0 answer these #uestions5 Chat is the length and cost of
the training courseD Chere is it held*online or offlineD Chat are the credentials of the people doing
the trainingD Chat does the training cover that sounds most interestingD Is the focus of the sales training
323 or business2to2consumer -32;.D Does the training cover customer relationship managementD
Chat does the training promise that&s newD 3ased on the online information0 which of the training
courses would ou choose to attendD "(plain wh.
00001Teahing N$tes
+he intent of this Internet e(ercise is to enhance students& understanding of the importance of sales
management training programs. +his e(ercise will also give them an idea of the content0 format0
location0 and costs of sales management training programs. It will give them e(posure to the topics that
are currentl considered hot in sales management0 such as customer relationship management0 and
building customer relationships and partnerships0 thus reinforcing the concepts discussed in the chapter.
It is an e(periential e(ercise0 so there is no specific answerE students will visit diverse websites and
come up with different answers because sales manager practices var from industr to industr.
00001ROLE.,LA*ING E-ERCISE
00001E/!&aining CRM t$ Ne0 Sa&es!e$!&e
00001S"t#at"$%
Mou&re a relativel new district sales manager for a large consumer products compan on the "ast
;oast. +he firm sells mainl through wholesalers0 but also direct to giant chain retailers like Cal2,art
and +arget. +oda0 as a guest lecturer0 ou&ll talk for an hour to eight newl hired field salespeople who
are taking our compan&s basic sales training program. Mou&ve been asked to talk about the
compan&s customer relationship management -;9,. initiative as it relates to the wa field salespeople
do their 'obs. Mou want to talk with the salespeople in a down2to2earth0 pragmatic wa0 so that the will
grasp what ;9, is0 wh it&s so important to the compan0 and what the can do in their interactions
with prospects and customers to further the compan2wide ;9, initiative.
00001R$&e'(&a) (art"*"pa%t+ a%, A++"-%.e%t+
00001Guest lecturer
District sales manager invited to talk about the compan&s ;9, program and the role of salespeople in
implementing it in their interactions with prospects and customers.
2! Chapter 1: INTRODUCTION TO SALES MANAGEMENT AND ITS EVOLVING ROLES
00001Salespeople
"ight people in their twenties with different backgrounds who are 'ust starting their sales careers0 so
the are likel to have man #uestions about ;9, and their roles.
00001Tea*h"%- N$te+
+he purpose of this role2pla is to reinforce the chapter&s discussion of a new business philosoph*
customer relationship management*which focuses on delivering value0 as well as adopting a customer
relationship orientation that focuses on the buer&s needs and development of long2term mutuall
beneficial relationships and partnerships. In line with their compan&s ;9, orientation0 contemporar
sales managers direct their salespeople to go beond merel selling0 and more toward serving as
customer consultants and business partners.
+his role2pla should give students an appreciation that the are being e(posed to cutting2edge sales
concepts that the need to develop to be successful. +his role2pla can be a long one0 sometimes lasting
a half hour or more0 as it gives students a chance to become participants in the learning process instead
of being passive listeners. +he instructor should let the #uestion2and2answer session continue as long as
important issues are being dealt with.
00001IN.BAS)ET E-ERCISE
00001De1e&$!ing C%st$2er Retenti$n Strategies
!!!!1S"t#at"$%
Mou are a district sales manager for a large consumer products compan that sells its products largel
through wholesalers and directl to a few giant retailers. Mour compan also has an e(tranet where
business customers can order online. +oda0 our compan&s national sales manager sent ou an e2mail
saing that the ;"@ is upset because of poor customer retention rates. Hast ear0 the compan lost over
20 percent of its regular customers through attrition of various kinds. %t the same time0 promotional
costs to attract replacement customers are increasing dramaticall0 causing profit margins to suffer. +he
;"@ has found this loss of customers and declining profits unacceptable0 and he has demanded that all
the compan&s sales managers start focusing more on customer retention. In addition0 he is launching
customer relationship training programs for all compan managers. Harge bonuses will be awarded to
those sales managers and their salespeople who can reduce customer attrition most. Mou have called a
sales meeting for all our salespeople to discuss this new initiative b the ;"@. Chat will ou tell our
sales forceD @utline the points that ou plan to make to them.
!!!!1Tea*h"%- N$te+
+he primar purpose of this e(ercise is to get students to appl the knowledge gained on customer
retention and loalt after reading the chapter. +o make this a fruitful e(ercise0 it is suggested that the
instructor break the class into groups of four to five students. %fter giving them five minutes to discuss
in their groups0 open this e(ercise for class discussion. %s several avenues of discussion should unfold0
the answers provided below ma be a sample of what students ma recommend. It would be wise to
steer the students toward appling the concepts of customer relationship management.
In outline form0 the following points should be covered at the sales meeting5
+o give a sense of urgenc and legitimac0 it would first be important to inform the sales force
that the ;"@ is upset at the low customer retention rates0 specificall the compan lost 20 percent
of its regular customers through attrition of various kinds.
;osts to attract new customers are increasing dramaticall0 causing profit margins to suffer.
%s continuousl selling to current customers costs less0 it is necessar to adopt a new perspective
that will help retain customers. +his relativel new philosoph that helps build customer retention
and customer loalt is known as customer relationship management -;9,..
It would then be necessar to discuss the core tenets of customer relationship management that
focus on delivering value0 as well as the adoption of customer relationship orientation that focuses
on the buer&s needs and development of long2term mutuall beneficial relationships and
partnerships.
In line with the compan&s new orientation toward ;9,0 the sales manager should direct his or
her salespeople to go beond merel selling and more toward serving as customer consultants and
business partners.
00001ET3ICAL DILEMMA
Mou&re the sales manager for a large chemical compan0 and ou have reason to suspect that one of
our top salespeople isn&t alwas plaing b the rules. Mou know that occasionall Nared has taken
friends out to lunch and charged it to the compan. %t other times0 ou&ve caught him conducting
personal business on compan time with compan resources -long2distance telephone calls and
charging car mileage to the compan for personal business and pleasure.. %t the end of last ear0 ou
discovered that Nared had persuaded one of his best customers to order e(tra product #uantities so he
could make his sales #uota for the ear. In mid2Nanuar0 that customer returned the e(cess products for
a full refund.
Mou&ve overlooked these things in the past because of the large sales volume Nared usuall generates in
his sales territor. @ne evening0 though0 on our wa out of the office0 ou overhear a conversation
between Nared and another of our salespeople. Nared comments5 /I personall think it&s oka to
withhold negative information about a product in order to make a big sale0 as long as no one can get
in'ured b using the product. +hings are getting reall tough in our industr*if ou&re going to
survive0 ou&ve got to do whatever it takes to get a saleL1
00001Teahing N$tes
Solutions provided b the instructor to ethical dilemmas such as the one above can be readil
#uestioned because what constitutes an unethical situation to one individual ma be an ethical issue to
another. Gence0 because the answer largel depends on a person&s ethical value sstem0 it is best to
discuss the ethical dilemma as an in2class e(ercise. %fter having students read the ethical dilemma0
open it up for class discussion. +his should get the students activel involved in the learning process.
3ased on the above viewpoints0 it should be noted that0 although answers to the e(ercise are provided0
there are several approaches that can be emploed to handle an administrative4ethical issue.
00001/#e+t"$%
10. As :ared*s sales manager' hat ould "ou do, Should "ou reprimand him' retrain him' or fire
him, )h",
"ven with all the attention on corporate and sales ethics in the popular press0 it ma be best to
continue to adopt the polic of non2interference as long as the top salesperson keeps his record of
high performance. It would be unwise to challenge a top salesperson with small matters such as
making occasional private phone calls or taking a friend out for lunch0 especiall when the
salesperson is contributing large sales volume to the compan.
+he 'ob of a salesperson is selling0 which b definition is a process of persuasion communication.
So it is not surprising to find that some salespeople sometimes withhold certain information about
a product in order to move customers toward the purchase. Chether or not this is a good long2run
selling strateg for a salesperson should be the sub'ect of discussion b the students. It is
important for the instructor to avoid being prematurel 'udgmental in listening to the comments of
the students. It&s far better to let fellow students point out logical or philosophical flaws in the
ethical reasoning0 or lack thereof0 b other students. Cith diverse cultural and e(perience
backgrounds0 each student has his or her own value sstem0 so the value of ethical discussions is
that students hear the various perspectives on given situations or issues.
00001CASES 0
!!!!1CASE 101
S8M;S/$ MACH8$< T//. C/M;A$5: SA.<S MA$A=<M<$T
S<M8$AR
It was a beautiful autumn da in downtown 7hiladelphia as the three recentl appointed sales managers
were en'oing a heart breakfast in the hotel restaurant. Chile sipping their second cup of coffee0 Nerr
Jline0 Brace Ballo0 and 7aul Swenson were discussing the events of the first da in the three2da sales
management seminar that Simpson ,achine +ool ;ompan now re#uires all its new sales managers to
attend.
;rr+ 6(#!: I wonder wh we spent so much time talking about sales force performance this morning.
+he&re making it sound like sales force success is a big mster. %ll that talk about developing long2
term prospects and customer relationships and internal compan support is a lot of ivor tower stuff
that&ll 'ust distract our salespeople and their sales managers. %ll week I&m running around like a deer on
opening da of hunting season 'ust pushing m salespeople to make their sales #uotas. I&ve got a couple
of gus in the office making sales calls b phone on our smaller prospects and customers0 and I don&t
have time to monitor them since I&m out of the office so much. Corking with m people in the field and
helping them make sales presentations and handle customer complaints keeps me from even finding
time to do all the paperwork head#uarters keeps demanding. %nd those automated intranet sales reports
that we&re supposed to prepare each week are no easier to do online than b hand0 like we&ve been
doing for ears. I guess this seminar is supposed to make us more sensitive to our salespeople0
prospects0 and customers0 but I sure don&t have much time to worr about subtle things like role
perceptions and developing long2term customer relationships. In m opinion0 there&s onl one thing that
reall matters0 and it&s spelled ,2@282"2M. Mou make the carrot big enough and an donke will get
the 'ob done. %nd the same goes for customers*ou offer products at lower prices than competitors
do0 and ou&ll get a sale whether ou&ve got a warm and fuzz relationship with the customer or not.
Grac Ga((o: Meah0 I know what ou mean0 Nerr. Seems like the sales training manager is tring to
impress the big boss b bringing in these glib consulting whizzes0 who probabl never carried /the
sales bag01 to tell us in fanc terms what we should be doing and thinking about besides our pressure2
cooker 'obs. I&d like to see them tr running a sales force. It&s a lot easier talking about managing
salespeople than actuall doing it. +oda0 the schedule sas we&re going to discuss /ine(orable
megatrends in the macromarketing environment1*whatever that string of gobbledgook means. ,
people know that I&m the onl megatrend the have to worr about. If I&m happ0 the&re happ. +he
know what the have to do if the want their commissions and bonuses. If the make their #uotas0 I
leave them alone. If the don&t0 then I come down hard on them. ,ost of m salespeople would laugh
in m face if I told them the had to concentrate more on developing long2term relationships with
prospects and customers. I&m not even sure how we would measure itL In five ears0 half or more of m
salespeople will have moved on0 so the&re focused on the short term. Cith salespeople0 ou&re alwas
going to have 20 to 30 percent turnover a ear because a lot of people 'ust can&t cut the mustard in
sales.
Pa-( S*!%o!: I have to admit that I&m learning some things I&m going to tr when I get back to the
office ne(t week. +op management doesn&t allow us to match some of the discounts our competitors are
offering0 so I know we have to learn to sell on some basis other than price. 3 focusing on developing
closer customer relationships and better service0 mabe we can overcome our price disadvantage. I
know a lot of salespeople don&t think long run because the&re opportunists0 but mabe I can find a wa
to reward them for doing a better 'ob in cultivating customer relationships and keeping customers from
leaving us for a competitor&s latest discount offer. 3ut like ou said0 it would be difficult to come up
with a good wa to measure whether the have done a better 'ob or not. I know that I&m probabl going
to be at Simpson for the foreseeable future since m kids are 'ust now entering grade school and I don&t
want to disrupt their lives. So I&ve got to figure out a wa to keep m profitable loal customers.
Simpson&s marketing director told me that the compan loses almost 20 percent of its customers each
ear0 and that it costs about ten times as much to win new customers as to keep our current ones. She
said5 OIf we could cut back 'ust a little on customer defections each ear0 our compan&s profits would
soar and we&d probabl all get big bonuses.&1
,abe these trainers can tell us how to get earl warnings about coming market trends and how to do
this customer relationship management stuff that&s supposed to help us keep profitable loal customers.
%nwa0 I&m willing to listen because I sure don&t have all the answers . . . especiall since I&m so new
to sales management. +hat increase in gasoline prices last ear caught me off guard and ran m selling
e(penses wa over budget. If I&d known in advance about the sharp rise in gas prices0 I would have had
more of m salespeople making telephone calls or sending e2mails to m small customers instead of
driving out to their offices.
Grac Ga((o: Ge0 it&s almost ?500L Ce&d better get over to the seminar room0 so we don&t make a bad
impression b coming in late.
Ca% 1r1ar) 4+ Trr+ Lo, 6!!%a* S$a$ U!#"r%#$+.
00001Teahing N$tes
Benerall0 instructors use cases to discern if students can integrate knowledge that the have learned
from reading the chapter and appl it to handle different administrative situations. +hus0 a more
appropriate wa to analze this case0 which will engender livel class participation0 is to have students
read and prepare for discussion in advance. +his will give students a chance to appl ke concepts in
their responses that could take an number of avenues and still be meaningful and intuitive.
000014%esti$ns
10. >ased on the brief con&ersation among :err" ?line' =race =allo' and ;aul Senson' hat !ind of
sales manager do "ou thin! each of them is, )hat do "ou thin! is the le&el of performance of the
sales force each person heads, Ho do "ou thin! each of them ill benefit from the sales
management training seminar,
Nerr Jline seems to be a sales manager who does not believe in new sales management
philosophies such as developing long2term customer relationships. Ge seems to be too bus
helping salespeople make sales presentations and handling customer complaints instead of doing
his sales manager duties0 which re#uire administrative0 analtical0 motivational0 and leadership
skills. In sum0 Nerr is /old school1 in his thoughts and behavior.
Brace Ballo is ver similar to Nerr Jline and does not seem to believe in new selling
philosophies. 3oth believe in the bottom line5 Ho it*s all about generating sales and meeting
sales #uotas if salespeople ant their commissions and bonuses. 7aul Swenson0 on the other hand
is much more open to learning new and better was of doing his 'ob0 such as how to sell on some
basis other than price. Ge clearl realizes that b focusing on developing closer customer
relationships and better service0 his salespeople can overcome a price disadvantage. Ge is clearl
/new school1 and is alread thinking of finding new was to reward salespersons for doing a
better 'ob in cultivating customer relationships and keeping customers from leaving for a
competitor&s latest discount offer. 7aul thinks long2term about how to keep profitable loal
customers because it costs so much more to win new customers. )urther0 he understands that b
lowering customer defections each ear0 the compan&s profits would soar0 and he and his sales
force would probabl get big bonuses. ;learl0 he does not have all the answers0 so he is looking
forward to attending the seminar and learning about identifing market trends and how customer
relationship management can help keep profitable loal customers.
+he salespeople managed b Nerr Jline could seemingl be dsfunctional and do not know how
to sell and0 hence0 need to be constantl helped in the selling process. It is possible that his
subordinates also do not care about new sales philosophies and concentrate onl on the carrot2
and2stick approach to generating sales.
Brace Ballo&s subordinates probabl are driven b the bottom2line and focus on meeting sales
#uotas. Ger salespeople ma also be 'aded about new sales philosophies and ma concentrate onl
on the short term.
@n the other hand0 the salespeople under the charge of 7aul Swenson could seemingl be a
functional group of people who are similar to their boss and open about learning how new sales
philosophies0 such as customer relationship management0 can help with customer retention and
build customer loalt. Hike 7aul0 the ma well appreciate how new business approaches can
help their compan thrive b building customer relationships and partnerships and thinking long
term.
7aul0 without #uestion0 will significantl benefit from the sales management training seminar
given his openness to learning and embracing new philosophies. Gowever0 if Nerr Jline and
Brace Ballo see the /larger picture1 emerging from the sales management seminar -not
guaranteed because of their negativit.0 it is entirel possible that the0 and their subordinates as
well0 can learn new was of making their organizations and their careers more successful.
20. 8f "ou ere a top e7ecuti&e for a compan"' ho ould "ou select "our ne sales managers, )hat
specific criteria ould "ou use, Ho ould "ou determine hether "our candidates had the
#ualities desired,
In selecting new sales managers0 it would be good that the 'ob applicant have selling knowledge
so he or she can train salespeople on how to become more successful in generating sales. +he 'ob
of a sales manager differs dramaticall from that of a salesperson. +hus0 the ideal characteristics
of a sales manager include screening 'ob applicants for supervisor0 managerial0 and
administrative skills. In addition0 the applicant should have leadership and interpersonal skills.
+he ideal candidate will be one who knows how to perform sales management tasks such as sales
forecasting and budgetingE sales force planning and organizingE devising time and territor
management strategiesE recruiting and selecting the sales forceE training0 leading0 motivating0 and
compensating the sales forceE sales volume0 costs0 and profitabilit analsisE and sales force
performance evaluation. Successful sales managers need to have a skill set that goes beond
knowledge of the traditional sales management areas identified above and should include
knowledge of customer relationship management0 which focuses on delivering value0 as well as a
customer relationship orientation that focuses on the buer&s needs and development of long2term
mutuall beneficial relationships and partnerships. ;ontemporar sales managers direct their
salespeople to go beond merel selling and more toward serving as customer consultants and
business partners. In addition0 the candidate should know how to manage a hbrid sales force
across multiple online and offline marketing channels.
+he newl selected sales manager should also have financial skills to analze profit and costs
information b customer0 product0 territor0 and other market segments instead of merel focusing
on sales volume. +he candidate should know how to develop empowerment programs in which
salespeople are treated as e#uals and partner with them in achieving sales0 profitabilit0 and
customer satisfaction4loalt goals. %nd finall0 the sales manager should be able to deplo sales
force automation technologies to increase the productivit of his or her salespeople as well as in
communicating with a sales force that works out of virtual sales offices.
30. Do "ou thin! that outstanding salespeople nel" appointed to the position of sales manager need
an" special training, 8f so' hat should the training co&er, )h",
@utstanding salespeople newl appointed as sales managers certainl know about successfull
generating sales0 which the can train salespeople under their charge to do. Gowever0 the 'ob of a
sales manager is significantl different from that of a salesperson. +hus0 salespeople newl
appointed as sales managers should definitel be trained to develop the skill set necessar to
become successful sales managers. +he training should cover issues pertaining to sales forecasting
and budgetingE sales force planning and organizingE devising time and territor management
strategiesE recruiting and selecting the sales forceE training0 leading0 motivating0 and compensating
the sales forceE sales volume0 costs0 and profitabilit analsisE and sales force performance
evaluation. +he should have knowledge of customer relationship management0 which focuses on
delivering value0 as well as a customer relationship orientation that focuses on the buer&s needs
and development of long2term mutuall beneficial relationships and partnerships0 and managing a
hbrid sales force across multiple online and offline marketing channels. +raining should also
focus on developing financial skills to analze profit and cost information b customer0 product0
territor0 and other market segments. %dditionall0 the new sales manager should know how to
develop empowerment programs that can achieve sales0 profitabilit0 and customer
satisfaction4loalt goals. Hast0 the sales manager should be able to use sales force automation
technologies for increasing sales force productivit.
!0. Do "ou thin! that sales managers can ha&e much impact on the performance of indi&idual
salespeople, Specificall"' hat might ne sales managers do to increase the performance of their
sales force,
%s leaders of their sales force0 sales managers can have a dramatic impact on their sales force and
individual salespeople. 3 skillfull using various sales management concepts and strategies0
sales managers can do a lot to influence their salespeople b devising effective motivation
strategies and compensation programs as well as training the sales force on the latest business
philosophies and approaches. )urther0 their knowledge of sales forecasting can be used to develop
realistic0 attainable sales #uotas and not set impossible0 unreachable goals.
!!!!1CASE 102
C<$TR/8D C/M;@T<R C/R;/RAT8/$: TH< $<) SA.<S
MA$A=<R
;entroid ;omputer ;orporation is a Dallas2based manufacturer of personal computers0 monitors0
interactive terminals0 disk drives0 and printers. In the past five ears0 ;entroid has e(panded into the
development of a variet of software packages for small businesses. +he firm&s growth in the past three
ears can onl be described as e(plosive*;entroid sales have grown from less than K32 million to
over KA? million. ;entroid distributes its products through office suppl wholesalers and large retailers.
It also has a sales force of fift2two salespeople who call directl on small businesses up and down the
"ast ;oast. ,ost ma'or metropolitan cities have at least one ;entroid salesperson assigned0 and a few
have two. +here are four regional sales managers and one national sales manager.
Si( months ago %lan ;hampion was promoted to regional sales manager for the southeastern region.
%lan grew up in %thens0 Beorgia0 and graduated from the Fniversit of Beorgia. Ge spent two ears
with I3, as a salesperson and then 'oined ;entroid three ears ago. Ge was based in %tlanta and has
consistentl been among the top five salespersons in the compan0 winning sales awards ever ear.
%lan&s region includes Beorgia0 )lorida0 %labama0 ,ississippi0 +ennessee0 8orth ;arolina0 and South
;arolina. %s regional sales manager0 %lan must supervise fourteen salespeople in the seven states. Ge is
also permitted to do some personal selling himself0 but his primar responsibilit is managing the sales
force. Since being promoted to sales manager0 %lan has spent a great deal of time in the field working
with his salespeople. Gis ears of selling computers have given him man innovative ideas0 and he
wants to pass along his insights so that all his salespeople can perform better. %lan tpicall spends two
or three das per month with each salesperson0 showing them how to best approach customers and
negotiate sales.
Since %lan was such a /supersalesperson01 his national sales manager saw little need to train him after
his promotion to sales manager. 3esides0 the compan is so bus handling the rapid sales growth that
little thought has been given to training needs for sales managers. +he firm has been promoting
outstanding salespeople like %lan to sales manager mainl because it knows people like him can teach
the sales force how to sell. In the past few months0 the national sales manager has received a couple of
complaints from salespeople in the southeastern region about %lan&s spending so much time with them.
In fact0 the said that several times0 %lan actuall made the sales presentations to their customers for
them. Some salespeople sa that he is confusing their customers and belittling their efforts.
@ne of the salespeople complained that she now has a credibilit problem with several clients. She
stated0 /Chen we made sales calls together0 he would allow me to take the lead and handle the call as I
normall would. %nd that was fine0 but the perception of the prospects was that %lan was there to
observe and evaluate me. +hree of m most promising clients asked wh %lan was not satisfied with
m performance.1 @ther salespeople offered similar comments and even reported that if %lan
disapproved of their presentation0 he would take over right in the middle so that /it was clear he was
there to teach me a lesson.1 @ne salesperson said that %lan&s manner was so negative that one of her
customers asked5 /Cas our boss here to help ou sell us e#uipment or to put ou in our placeD1
Ca% 1r1ar) 4+ A!)+ Woo), W%$ V#r.#!#a U!#"r%#$+.
00001Teahing N$tes
Benerall0 instructors use cases to discern if students can integrate knowledge that the have learned
from reading the chapter and appl it to handle different administrative situations. +hus0 a more
appropriate wa to analze this case0 which will engender livel class participation0 is to have students
read and prepare for discussion in advance. +his will give students a chance to appl ke concepts in
their responses that could take an number of avenues and still be meaningful and intuitive.
!!!!1/#e+t"$%+
10. Do "ou belie&e Alan is doing a good +ob in his ne sales management position, )h" or h" not,
%lan is not doing a good 'ob in his present position as sales manager. Ge is appling the same
skills that earned him the promotion to sales management0 i.e.0 tring to satisf customers b
personall calling on them to sell and solve their problems. Instead of /managing01 %lan is
/doing.1 Ge is preempting the work of the salespeople0 which is leading to confusion on the part
of customers and resentment among the sales force.
20. Describe the functions Alan should be performing as sales manager. )hat should the
appro7imate allocation of his time be in performing these functions,
%lan should be spending his time determining how to accomplish sales ob'ectives and goals
through his salespeople and sales staff. +he functions he should be performing include5
a0. Setting sales force goals and ob'ectives
b0. Determining the size and structures of the sales organization
c0. 9ecruiting0 selecting0 and training salespeople
d0. 7reparing sales forecasts and allocating sales force efforts
e0. ;ompensating0 motivating0 and leading the sales force
f0. ;onducting sales volume0 cost0 and profit analsis
g0. ,easuring and evaluating sales force performances
Students should be encouraged to e(press their own views about what percentage of the sales
manager&s time ought to be spent on each activit. Differences in opinions should lead to
provocative discussions and important insights for all.
,an sales managers overemphasize selling activities -making calls with salespeople0 personall
selling to their own accounts0 and handling problems with accounts. in allocating their time.
30. Do "ou belie&e that Alan*s beha&ior ill ha&e a long%term negati&e effect on those salespeople
ho ha&e had a problem ith his a" of field super&ision and training, 8f so' hat could Alan do
to moderate the situation, Ho could technolog" be used here,
+he salespeople are aware that %lan&s behavior is counterproductive for them. %lan&s
overinvolvement and criticism will hamper the growth and productivit of his salespeople. %s a
result he ma e(perience a higher than average turnover of salespeople as his staff seek positions
with other companies. Gigher turnover will create a need for %lan to provide more training. It
won&t be long before his region&s sales figures are in 'eopard.
It appears that %lan ma have some good sales suggestions and problem2solving skills. %lan ma
want to share these thoughts in a weekl teleconference with his staff so that his emploees could
learn from his e(perience without his presence in their offices. %lan could also use the Internet to
post common problems and solutions. +he site could be updated dail b an of the managers as a
means of learning from others& e(periences.
!0. As the national sales manager' ho ould "ou handle this problem ith Alan,
+he national sales manager should provide %lan and all newl selected sales managers with
training in the managerial functions0 administrative skills0 and leadership #ualities needed to
perform successfull as sales managers. +op management must accept much of the responsibilit
for the inade#uate preparation of %lan for sales management and his erroneous approach to his
new 'ob.
$0. Do the issues in this case raise an" ethical concerns that the national sales manager should
consider, 8f "es' ho ould "ou suggest handling those concerns,
+here are no ma'or ethical concerns in this case that cannot be easil handled. +he obvious ethical
concern is that %lan has been disparaging and chastising his subordinates0 which can be e(tremel
uncomfortable in front of compan clients. Fpon hearing the complaints0 the national sales
manager might have a word with %lan to discourage his disciplining of his subordinates and
suggest that he could handle the situation a lot better b training the salesperson how do a better
presentation on a one2to2one basis.

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CHAPTER 1

INTRODUCTION TO SALES MANAGEMENT

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