DIRECTING A SALES

FORCE
 DIRECTING SALES FORCE

•MOTIVATING A SALES FORCE

•SALES FORCE COMPENSATION

•LEADERSHIP OF A SALES FORCE

“ALL MOTIVATION IS
SELF-MOTIVATION”
• Motivation is…….. the desire
(on the part of an individual) to
expend effort to fulfill a need
 3 Dimensions of MOTIVATION
• Choice - to Initiate Action on a certain
task ..

2. Intensity – to Expend a certain amount

of effort on that task …

3. Persistence - in expending effort over

a period of time ….
 Importance of Motivation
• Unique Nature of Sales Job

• Individuality of Salespeople

• Diversity in Company Goals

• Changes in Market Environment

Behavioral aspects……
Maslow’s Hierarchy of Needs…
 PHYSIOLOGICAL NEEDS
Fulfilled through:
Food, shelter, clothing, health care.

Managerial Actions:
Provide/offer adequate income
and good benefits package.
 SAFETY NEEDS
Fulfilled through:
Job security, Safety, Income security

• Managerial Actions:
Provide safe work environment, set mutually
agreed-upon performance standards,
communicate job performance
expectations and consequences of failure
to perform
 SOCIAL NEEDS
Fulfilled through:
Affiliation, friendship, acceptance.

• Managerial Actions:
Use team selling, hold social functions,
distribute employee newsletters, hold
sales meetings, mentoring.
 ESTEEM NEEDS
Fulfilled through:
Status, recognition.

• Managerial Actions:
• Recognize sales rep achievements
personally and publicly through title
changes, commendation letters,
promotions
 SELF-ACTUALIZATION NEEDS
Fulfilled through:
Self-development, challenge.

• Managerial Actions:
• Provide/offer advanced training,
assignments to special projects, more
responsibility and authority.
Hertzberg’s Dual-Factor Theory

HYGIENE FACTORS MOTIVATION

FACTORS
• pay • recognition
• company policies • responsibility
• supervision • challenge
conditions • growth
• work opportunities
 EXPECTANCY THEORY
Motivational Conditions
Does better Does more
Are the
YES YES YES
rewards worth performance lead effort lead to GREATER
the effort? to greater rewards? better performance? EFFORT

NO NO NO

The same or less effort

 What motivates your Employees?…
• RANKED BY EMPLOYEES
• Interesting Work
• Appreciation of work done
• Being well-informed
• Job Security
• Compensation
• Growth & promotion
opportunities
• Good working conditions
• Personal loyalty to
employees
• Tactful discipline
• Help with personal problems
• RANKED BY MANAGERS
• Compensation
• Job security
• Growth/Promotion Opptnts
• Good working conditions
• Interesting work
• Personal loyalty to
employees
• Tactful discipline
• Appreciation of work done
• Help with personal
problems
• Being well informed
 ROLE THEORY
Helps Managers understand
that Salespeople often
experience:

• Role Ambiguity

• Role Conflict
 Motivational Mix
FINANCIAL REWARDS NON-FINANCIAL
• Basic Compensation Plan •Recognition-Pins, Trophies, etc
3. Salary •Praise & Encouragement
4. Commissions •Job Enrichment
5. Bonus •Opportunity for Promotion
6. Fringe benefits •Sales Meetings / Conventions
• Sales Contests
OTHER ELEMENTS • Evaluation of Salesperson’s
performance
•Leadership & Supervision
• General Mgt elements:
•Sales Training
3. Organizational Structure
•Sales Mentoring
4. Mgt’s Leadership Style
•Sales Planning elements –
Forecasts, Budgets, Quotas, 5. Channels of communication
Territories 6. Corporate culture
 Causes of Plateau-ing
• No clear career path
• Not managed adequately
• Bored
• Burned out
• Economic needs met
• Discouraged with company
• Overlooked for promotion
• Lack of ability
• Avoiding risk of management job
• Reluctance to be transferred
Sales Force Compensation
 What a Good Sales
Compensation Plan Should Do
Efforts + Control Treat Attract and
Results = activities of customers keep good
Reward sales reps properly people

Motivate the Good sales Economical yet

salesperson compensation plan competitive

Security and Flexible and

Fair Simple stable
incentive
 Steps in designing a
Sales Compensation Plan

Identify Establish level of

Review
plan’s objectives compensation
job description

Develop Pretest &

Decide on
method of install plan
indirect monetary
compensation
compensation
 Building Blocks for a Sales
Compensation Plan

Others

Profit sharing Others

Pension Entertainment

Profit Sharing Moving Expenses Lodging

Company Car

Bonus Insurance Lodging

Salary Commission Paid Vacation Travel

SECURITY INCENTIVES BENEFITS EXPENSES

Method Advantage Disadvantage Best Used

Straight Provides security Direct incentive is For products that require a

salary and stability for easily lost if not lot of presale and/or post-
reps administered sale service
properly
Better for For building long-term
directing and Represents a fixed customer relationships
controlling sales cost
When supervision is
activities
Requires available for new recruits
Ensures proper supervision to
For new territories
treatment of direct, control, and
customers evaluate For missionary sales

Bonus Added incentive Added cost To encourage above-

normal performance of
Can be used for May be seen as
specific activities
specific activities - inequitable if not
flexible administered
properly
 Method Advantage Disadvantage Best Used

Straight Provides a Difficult to direct & When a strong incentive is

commis strong incentive supervise sales needed to attain sales
sion Sales people people For products that require
have more Customers’ best little presale and/or post-sale
freedom interests may be service
Acts as a ignored The sale is one-time
screening Sales peoples Adequate field supervision
method earnings may not available
fluctuate widely Company is in a weak
financial position
Company uses part-time or
independent sales people
Possible Combination
Compensation Plans

COMMISSION

BONUS
SALARY
Leadership of a Sales Force
 Leadership Effectiveness

Personal
characteristics Leadership
style
Leadership
(the leader
behaviors) effectiveness
Managerial
skills
SITUATION
 Two Leadership Styles
• Transactional Leadership
– Those supervisory activities regarding the day-to-
day operation and control of the sales force.

• Transformational Leadership
– Transforms the basic values, beliefs, and attitudes
of followers such that they are willing to perform at
levels above and beyond expectations.
Tools and Techniques of Leadership
• Personal contact
• Sales reports
• Telecommunications
• Printed aids
• Meetings
• Indirect supervisory aids
 Coaching Sales Reps
• Three elements of leadership most often
used to describe coaching
–Verbal feedback
• Praising salespeople when they do well.
–Leading by example
• Coaches are role models; salespeople will
emulate them.
–Mutual trust and respect
• Created through two-way communication
Outcomes of Effective Leadership
•Well-Trained Salespeople
•Trust among Salespeople
•Citizenship Behaviors
•Voluntary behaviors important to the success of the firm
(e.g., when one rep gives encouragement to a fellow,
struggling rep)

•Better Performance
•Sales Force Morale
•A sense of common purpose and a belief among members
that group goals can be attained.
 Job Satisfaction
•Sometimes called individual morale
•An individual salesperson’s emotional and evaluative
feelings toward various dimensions of the job, including
feelings toward…
•Pay
•Promotions
•Job Security
•Benefits
•Co-workers
•The Sales Manager (or Leader)
•Individual salespeople must first each be satisfied with
his or her job in order for high group morale to emerge.
 Problems Encountered in
Leadership
• Poor performance
• Substance abuse
• Cheating on expense accounts
• Engaging in unethical behavior
• Third-party sexual harassment