Sales Force: Sales Training

Role of Sales Training in Sales Force Socialization

Sales training helps socialize the new hires, providing them with a positive: Initiation to Task
The degree to which a sales trainee feels competent and accepted as a working partner An understanding of what tasks are to be performed, what the priorities of the tasks are, and how time should be allocated among the tasks.

Role Definition

Sales Training as a Crucial Investment

Most organizations see a link between sales training and salesperson productivity U.S. companies spend approximately $7.8 billion annually on training The need for sales training is continual Sales managers play a crucial role in the training process

Managing the Sales Training Process

Assess Sales Training Needs Set Training Objectives Evaluate Training Alternatives Design Sales Training Program Perform Sales Training Conduct Follow-Up and Evaluation Follow-

Assess Training Needs

Determine desired skill set and levels of performance Assess salesperson s actual skill set and levels of performance Analyze gap between desired and actual to determine training needs

Assess Training Needs: Methods

Sales Force Audit Performance Testing Observation Salesforce Survey Customer Survey Job analysis

Typical Sales Training Needs

Sales Techniques:
Salespeople have an ongoing need to learn how to sell

Product Knowledge:
Salespeople must know their product benefits, applications, competitive strengths, and limitations

Common Mistakes Sales Training Addresses

Ineffective listening and questioning Failure to build rapport and trust Poor job of prospecting for new accounts Lack of preplanning of sales calls Reluctance to make cold calls (without an appointment)

Common Mistakes Sales Training Addresses

Lack of sales strategies for different accounts Failure to match call frequency with account potential Spending too much time with old customers

Common Mistakes Sales Training Addresses

Over-controlling the sales call Failure to respond to customers needs with benefits Giving benefits before clarifying customers needs Ineffective handling of negative attitudes Failure to effectively confirm the sale

Typical Sales Training Needs

Customer Knowledge:

Salespeople should know their customer needs, buying motives, buying procedures, and personalities. Salespeople must know competitive offerings in terms of strengths and weaknesses.

Competitive Knowledge:

Typical Sales Training Needs

Time and Territory Management:

Salespeople should learn to maximum work efficiency.

Training Objectives

Increase sales or profits Create positive attitudes and improve salesforce morale Assist in sales force socialization Reduce role conflict and ambiguity

Training Objectives
Introduce new products, markets, and promotional programs Develop salespeople for future management positions Ensure awareness of ethical and legal responsibilities

Training Objectives
Teach administrative procedures Ensure competence in the use of sales and sales support tools Minimize sales force turnover rate Prepare new salespeople for assignment to a sales territory Improve teamwork & cooperative efforts

Evaluate Training Alternatives

Selecting Sales Trainers
Internal External

Selecting Sales Training Locations

Decentralized (e.g., district or regional offices) Centralized (e.g., corporate headquarter)

Evaluate Training Alternatives

Selecting Sales Training Methods
Classroom/Conference Training On-the-job Training (OJT) Mentoring Job rotation

Evaluate Training Alternatives

Selecting Sales Training Methods
Behavioral Simulations Absorption Training

Selecting Sales Training Media

Internet Computer-Based (e.g., CD-ROM) Paper-Based

Design the Sales Training Program

Finalize the Training Program Schedule Training Sessions Make Necessary Travel Arrangements Make Necessary Accommodation Arrangements

Perform Sales Training

As the training is being conducted, the sales manager s primary responsibility is to monitor progress of the trainees and to ensure adequate presentation of the training topics.

Conduct Follow-Up and Evaluation

It is always difficult to measure the effectiveness of sales training. Nevertheless, a reasonable attempt must be made to assess whether current training expenditures are worthwhile and whether future modification is warranted.

Compensation and Motivation of Sales Force

Compensation Plans
To assist the company in meeting its sales projections, To bring the earnings of the sales force to desired levels, To reward individual salespersons in direct proportion to their efforts and performance.

Attitudes towards Compensation Plan

Salespeople Look for Companys Attitude

1. Adequate income for adequate performance. 2. Superior income for superior performance. 3. Incentives for special achievement. 4. A base of fixed-income for security purposes.

1. No conflict, no argument on this point. 2. None here either. 3. All but a few reactionary companies agree. 4. Many companies agree, but some cannot afford a fixed expense such as salary. In certain industries compensation ranges from 100 per cent salary to 100 per cent commission. Company attitude will depend on circumstances peculiar to it. 5. No argument here, but not all companies can afford full range.
Cont. 6. As much to the companys advantage as the salespersons.

5. At least primary fringe benefits. 6. Opportunity for advancement, promotion.

7. A yardstick to measure performance. 8. Equitable treatment to all sales people; pay based on performance no free loaders, no favouritism or exploitation.

7. Equally important for the company to measure performance. 8. Equally important to the employer.

9. A sense of security because 9. Just as important to the company which must of the feeling that he is rely on the morale of its sales force. The sense of respected and regarded as a security and well-being of sales force pay many human being who is important bonuses to an employer. to the company. 10. Flexibility in a plan, sensitivity 10. Equally important to a company. to changing conditions. 11. Simplicity easy to understand.
Cont. 11. The company agrees the simpler the plan, the easier and cheaper to administer it.

Formal Compensation Process

Determine Establish Sales Force Objectives Compensation Objectives, Strategies and Tactics

Determine Compensation Factors

Appraisal and Recycling

Implement Long and Short-term Range Programmes

Measure Individual, Group and Organisational Performance Relate Rewards to Performance Communicate Compensation Policy

Various Modes of Compensating the Sales Force

Salary A straight salary payroll is by far the easiest for employers to handle. Deductions for provident fund, income taxes and other fringe benefits are fixed and the work of accounting is reduced. In many industries, this method of compensation is generally used. There is always an overriding reason for choosing a salary plan. The following industries are using this method       Highly seasonal industries High-tech industries Trade salespeople Route salespeople Missionary and educational salesmen Group selling
Cont.

Strengths of the Salary Compensation Plan 1. For the sales force    2.    Simple to calculate Fixed income Job security Reduces turnover in sales force Increases authority of sales manager in controlling sales force An effective tool in case Group efforts are required Of business that is technical in nature Hiring new staff Of seasonal business
Cont.

For the company

The following are the weaknesses of the Salary Compensation Plan 1. For the sales force   2. Lack of incentive to excel Old sales force/under achievers tend to be overpaid

For the company   Fixed expenses, difficult to cut down expenses Frequent adjustments in salary necessary, yet too many changes are as bad as too few  Requires excellent supervision which is not always available.
Cont.

Straight Commission Paying a commission is a variable expense rather than a fixed one. If sales are made, a commission is paid no sales, no commission. This keeps sales expenses strictly in line. A straight commission pay plan has many advantages. It is desirable for a company suffering from a severe cash shortage since the commission need not be paid until proceeds are received from a sale. Flexible commission rates can be a strong incentive and many organisations are successful because the sales force enjoys a liberal commission schedule.

Cont.

Target Commission A straight commission is paid on sales volume. On a fixed commission base, a fixed percentage of sales volume is paid to the sales force. Other plans call for increase in rate as volume increases. A fixed rate commission is easy to figure and administer. If the rate is 2 per cent, it stays at that percentage whether the salesperson sells goods worth Rs 40,000 or Rs 4,00,000. A progressive commission rate accomplishes a major objective of most companies: it provides a constant incentive to the sales force to do better. The following example explains this:
Up to From Above Sales (Rs) 40,000 40,000 to 1,00,000 1,00,000 Commission Rate 2% 3% 4%

If a salesperson s quota is Rs 80,000, he would earn Rs 2,000 if he achieved that target exactly a composite rate of 2.5 per cent. For example: Smith Kline Beecham is using this method in their worldwide selling.
Cont.

Bonus, Profit Sharing, Fringe Benefits Paying bonus is a method that a company adopts to reward special contribution and as an incentive to superior performance. Profit Sharing Many experts in the field of sales management disapprove extending profit sharing to salespeople. For once, companies agree with them. There may be an argument in favour of such a payment if no bonus plan is established for excellence in sales performance. Fringe Benefits Fringe benefits have become a fascinating subject and an item of considerable expense to organisations. The costs of fringes can be as high as 30 per cent of direct compensation expense depending on what benefits are offered and whether a portion of the expense is shared with the employee.
Cont.

Reimbursement of Expenses      Travel Meals Lodging Entertainment Miscellaneous usually by car or scooter

Proper Sales Compensation Plan    Provide a living wage Have performance Based pay levels Be adjustable to meet companys goals and individual aspirations.

Such a plan not only helps in normal times but also takes care of special needs of a company.

Motivation to the Sales Force

Motivation is the force within us that directs our behaviour.
.

Cont.

Sales Career Stages and Motivation

 Are salespersons motivated by different rewards at different stages of their career? Do salespeople have different career and personal concerns based on career stages? The basic answer to both these questions is Yes .  There are four career stages: exploration, establishment, maintenance and disengagement.

Cont.

Importance of Motivation Theories for Sales Force

i. Nature of Job: A sales representatives job is usually tiring with irregular working hours. They do not often have the authority to do what is necessary to win an account and they sometimes lose large orders that they have worked hard to obtain. ii. Human Nature: Most people operate below capacity in the absence of special incentives, such as financial gain or social recognition. iii. Personal Problems: They are occasionally preoccupied with personal problems, such as sickness in the family, debt, etc. High productivity in a sales force comes about neither naturally nor accidentally. It requires motivation. The problem of motivating sales representatives has been studied by Churchill, Ford & Walker. They propose the following way.
MOTIVATION EFFORT PERFORMANCE REWARDS SATISFACTION

Dimensions of Motivation
Motivation has mainly three dimensions

INTENSITY

PERSISTENCE

DIRECTION

1.

Intensity: It is the magnitude of mental and physical effort put in by a salesperson for his or her activity or goal.

2. 3.

Persistence: It is the extension of effort over time. Direction: It implies that the individual can choose how his or her efforts will be spent.
Cont.

Motivation Can Also be Intrinsic or Extrinsic  Intrinsic motivation means that individuals are motivated internally by a desire to

please themselves or merely by the satisfaction of performing a job.  Extrinsic motivation means that someone else provides the motivation through

methods such as pay, promotion or recognition.

Model of the Motivation Process

The motivation process consists of six steps : 1. 2. 3. 4. 5. 6. Recognise need deficiency Search for ways to satisfy needs Establish goal-directed behaviour Performance Provide rewards or punishment Process needs.
Cont.

The Six Step Motivation Process Recognise need deficiency

Process begins

Needs reassessment SALESPERSON

Search for ways to satisfy needs

Provide punishment or rewards

Establish goal directed behaviour

Performance

Non-financial Factors and their Impact on Sales Force Motivation

        Meetings between Manager and Sales Force Clarity of Job Sales Contests Sales Conferences and Conventions Positive Feedback Reward and Recognition Persuasion Observations and Future Directions