Sales Management Tasks & Sales Force Management

Whos a sales-person?

 Persons who are employed to sell merchandise in a store or in a designated territory.

ROLE OF SALESPEOPLE
Two-way personal communication More effective than advertising in complex selling situations The sales force plays a major role in most companies The sales force is the interface between the company & customers.

Reps versus Own Sales Force?

Whats a rep?

Representative of an organization Also called sales rep

Can be a retailer, employer of a channel partner

Independent Reps
Advantages
Low fixed costs (commission-based) No need to hire Produce sales quickly Have established relationships

Disadvantages
Sell for several firms Cost more as sales grow Tend to push popular items Only call on best accounts More difficult to control

Company Salespeople
Advantages
Sell only your products Can be directed to specific accounts Can train them to sell by company guidelines Sell full product line

Disadvantages
High fixed costs Takes time to hire Costs more initially Sales grow more slowly

The Personal Selling Process

The Selling Job Seven Tasks

Step 1: Locating and qualifying prospects
Identifying potential customers Tradeshows often provide excellent source Screening leads
Can they use what you are selling? Do they have financial resources?

The Selling Job Seven Tasks

Step 2: Pre-call planning
Good salesperson spends considerable amount of time planning the call Planning includes
Finding information on past sales calls, competition, product & service Whom to contact Customer need analysis

The Selling Job: Seven Tasks

Step 3: The approach
Stage where salesperson meets customer for the first time

Step 4: The presentation

Benefits of product are presented & demonstrated Presentation tailored to needs of prospect (adaptive selling)

The Selling Job: Seven Tasks

Step 5: Answering objections
Be prepared with counterarguments

Step 6: Closure
Ask for the order Average number of calls to close = 4

Step 7: Follow-up
Help ensure customer satisfaction Tasks include
Expediting orders, taking inventories, training client personnel, etc.

SALESFORCE SIZE HOW MANY? Workload method

Calculate total amount of work necessary to serve entire market Nr of salespeople = total workload divided by amount of work average salesperson is expected to handle

SALES FORCE SIZE HOW MANY? The Workload Method

Number of Salespeople =
{(number of existing customers + potential customers) x ideal calling frequency x length of call} _______________________________________________ {selling time available to one salesperson}

HOW MANY SALESPEOPLE Workload method - example

3,000 existing + 2,000 potential clients Called 5 x per year for 2 hrs. (incl. travel) Available selling time per salesperson = 1,000 hrs. Size = (3,000+2,000) x 5 x 2 / 1,000 = 50

Sales Force Turnover

Size influenced by turnover Turnover rate = separations per year / average size of sales force Issue
Customers prefer long-term relationships with suppliers Empty territories mean lost sales High recruiting and training costs

Sales Force Turnover

Remedies
Balancing territories Improve financial incentives Offer non-financial rewards (trips, trophies, recognition awards, etc.)

Sales force Turnover

Problems of low turnover
Salespeople resting on their laurels Overpaid

ORGANIZING THE SALES FORCE

According to: Geographic units Product
Companies having diverse product lines Issue: customer called on by several salespeople

Customer
Customers have unique purchasing requirements

RE- ORGANIZING SALES FORCE

Reorganization necessary as
Companies grow Customers change Industry structure changes

Reorganizing can have negative effects on staff morale & companys profits

RECRUITING AND SELECTING SALESPEOPLE

Careful recruiting can
Increase overall sales force performance Reduce turnover Reduce recruiting & training costs

Recruiting involves
Soliciting applications Screening candidates
Interviews In-field observation References, work history, etc.

Hiring experienced versus inexperienced salespeople

Traits of Successful Salespeople

Enthusiasm Patience Initiative Self-Confidence Job Commitment Customer Orientation Independent SelfMotivated Excellent Listeners Friendly Persistent Attentive Honest Internally Motivated Relationship Oriented Disciplined Hardworking Team Players

MOTIVATING & COMPENSATING SALESPEOPLE Straight Salary

Advantages
More control over wage levels More control over salespeoples activities Easier to divide territories and reassign people More effort on relationshipbuilding & other tasks that do not bring immediate revenues Useful with long selling cycles (e.g., planes, construction)

Disadvantages
No incentives for extra efforts

MOTIVATING SALESPEOPLE Commission Plans

Advantages
Reward accomplishments, not time spent Fair Attract better-qualified applicants

Disadvantages
Little control over salespeople Non-selling tasks neglected Salespeople sell themselves Reluctance to have territories changed or reassigned Fluctuating incomes for salespeople

MOTIVATING SALESPEOPLE
Most companies use combination plans:
Base salary + commission and/or bonus

EVALUATING SALESPEOPLE
Complex
Territories differ Vast array of jobs Host of control measures
Qualitative versus quantitative Input- versus output-based

EVALUATING SALESPEOPLE
Output measures
Orders
Number Size Orders per call (batting average)

Accounts
Active, new, overdue, lost

Sales
To potential To quota Per order

Margin

EVALUATING SALESPEOPLE
Input measures
Sales calls Expenses
Per call Per sale

Time spent on non-selling tasks

So who can be called a good sales-person ?

 A good sales person is one who builds relationships A good sales person does not make promises he/she cant keep A good sales person listens to their customers A good sales person is helpful, even if there is nothing to gain A good sales person take s the initiative or goes the extra mile