SALES MANAGEMENT

INTRODUCTION
In daily life, a layman deals with different transaction in terms of
selling and purchasing of goods and services. In these transactions
the seller persuades the buyer. Therefore, selling may be defined as
persuading people to satisfy the want they have. The person, who
does this act, is calleda salesman, the result of this actionas sales,
while these activities of the person, are supervised and controlled
by sales-management.
Inthe present scenario salesexecutivesare professionals. They plan,
build and maintain effective organizations and design and utilize
efficient control procedures. The professionals approach
requires thorough analysis, market-efficient qualitative and
quantitative personal-selling strategy. It calls for skilful
application of organizational principles to the conduct of sales
operations.
In addition, the professional approachdemands the ability to install,
operate, and use control procedures appropriate to the firm s
situationandits objectives.
Executives capable of applying the professional approach to
sales management are in highdemand today. The quality of selling
is referred to as salesmanship. In other words, management is
synonymous with leadership. Managers do the same thing in
industry, as ministers do in states and at the centre, i.e., they
have to plan, forecast, direct and control their personnel. Here
success lies in running together, hand in hand. Managers are the
captainsof the army of theirfollowers.
DEFINITION
Originally, the term sales management referredto the directionof
sales force personnel. But, it has gained a significant position in
the today s world. Now, sales management means management of
all marketing activities, including advertising, sales promotion,
marketing research, physical distribution, pricing, and product
merchandising. The American marketers association (AMA s)
definition,takesinto consideration a number of these viewpoints. Its
definitions includes: the planning, direction, and control of the
personnel, selling activities of abusiness unit including recruiting,
selecting, training, assigning, rating, supervising, paying, motivating,
asall these tasksapply to the personnel sales-force.
Further, it may be quoted: it isasocio-scientific process, involving
group-effort inthe pursuit of commongoalsor objectives, whichare pre-
determined. Co-ordinationis its key, though, no doubt, it is a systemof
authority, but the emphasisisonharmony andnot conflict.
Sales-management differsfromotherfieldsof management,
indifferentaspects: the selling operationof abusinessfirmdoesnotexist
in isolation. Thus, simultaneous with the changes taking place in the
business, as well as marketing-orientation, anew concept of sales
management has evolved. The business, is now society-oriented, on
human-welfare aspects. Therefore, sales-management works ina broader
and newer environment, in co-existence with the traditional lines. The
presentemphasisisnow ontotal developmentof humanresources.
BENEFITSOF SELLINGACTIVITIES
There are different benefits of selling activities, which are as
follows:
(1) Benefits to the society: economic growth and maximum
employment are the basics for national development. The
achievement of boththese goals means jobs and incomes for
a nation s labour-force. The number of people, who need
jobs, continues to expand, and also some jobs are being
eliminated, because of the introduction of computers and
abolition of obsolete technology. If jobs are to be made
available for all those, who want and expect them, the
economy must continuously expand its production of goods
and services, which can only be done by adopting sound
government-policies and efficient use of people. Equally
important here is the fact, that an economy needs
individuals, to sell what is produced. Through their
persistent efforts to create and stimulate demand, sales-
people could be said to be the life and blood of a productive
economic-system. The large number of workers, infactories,
andoffices, wouldnot be needed, if someone were not selling
their products.
(2) Benefits to consumers: professional people may not know
every fact of a product, but they, at least know its major
uses, limitations and benefits; so they caneasily serve their
customers, quite effectively. For example, an insurance
agent can analyze the hazards and risks that confront a
client s business or home-situation, examine existing
coverage and offer helpful advice, in order to eliminate the
gapsor overlapsincoverage, inadditionto saving the client s
money. The sales-engineers are qualified to analyze
technical-problems, which may be confronting a particular
organization and they can give the right recommendations
for developing efficient operations. Like-wise, the medical-
representatives may help the busy doctor, by keeping him
abreast of new drugs in the market. The list of sales-people
who canoffer assistance to customers is practically without
end.
(3) Benefits to business firms; their sales-persons and
customers: salespersons are owned by their companies,
while customers are the end-users of the company s
product(s) and/or services, all these people, in the chain of
marketing, stand to benefit by sales-activities. A business
firm can be profitable only if its revenues exceed its costs.
The prime responsibility of the salespersons is to sell the
goods, produced by the organization, at aprofit. The creative
sales-person, tries to penetrate his territory, and adopts
suitable means and techniques of profitable-selling of goods
and/or services. Businessfirms, derive variousotherbenefits
from, non-selling activities of sales-persons. The sales-
person, inthe field, is anideal person, to keepthe company
abreast, or ahead of competition. He, thus, becomes an
important source of field-intelligence by providing important
(andsometimesvery crucial) information, aboutthe nature of
competitive-activities, and also about the changing needs of
customers. The sales-force has the additional responsibility
of serving the needs of customers that buy the film s
product(s). Most firms cannot survive, only on the basis of
one-time sales; repeat-sales are necessary. This is possible
only if the customers are served inaprofessional manner. A
customer-oriented sales-person has to perform such
activities as: providing customers with product-information
and demonstration(s); training customers-employees, in
product-use; providing customers with sales-advice; and
assisting customersinmaintaining inventories .
ELEMENTSOF SALESMANAGEMENT
There are the four basic elements of sales management, discussed
below:
(1) Planning: a business cannot be taken as a chance. Every
salespeople or personconcernedhave to see the future, in
a planned way like what must be done? And who will do it?
The plan must be based on extensive market research, and
the facts must be verified at every stage. The plan should
also be evaluated, after investigating the total-market, for a
particular type of product. Flexibility must be provided by
establishing a specialists production line, to allow for
variation in production. The plan should also be subject to
continued review. The details of the plan should be
discussed, with all the departmental heads, concerned, and
their sub-ordinates, who bear responsibility for fulfilling their
partsof the plan.
(2) Co-ordination: Co-ordinationis all pervasive and permeates
every function of the management-process. For example, ill
planning, departmental-plans are integrated into a master.
Plan, ensuring adequate co-ordination. Similarly, organizing
starts by co-ordination wholly, partially inter-departmental
and inter-personnel matters. Co-ordination also helps in
maximum utilization of human-effort by the exercise of
effective leadership, guidance, motivation, supervision,
communication etc. The control-system also needs co-
ordination. Co-ordination does not have any special
techniques. Nevertheless, there are sound principles, on
whichto developskills. It hasaspecial needto helpthe staff,
to see the total picture and co-ordinate their activities, with
the rest of the team. The sales manager has to encourage
direct personal-contact, withinthe organization, particularly
where there is lateral-leadership. Harmony, and not discord,
shouldbe the guiding mantra. Inaddition, one hasto ensure
free flow of information that is selective to the objectives of
the business. No personal problems, arising from business-
operations are to be ignored, but solved through a free-
exchange of ideas. This is especially true in the case of the
sales-force of any organization.
(3) Controlling: the sales manager has to check regularly, that
the sales activities are moving inthe right directionor not.
He guides, leads, and motivates the subordinates, so as to
achieve the goals planned for the business. He has to take
steps to ensure that the activities of the people conformto
the plans and objectives of the organization. The controlling
systemshouldbe suchthat one canstudy the past, note the
pitfalls and take corrective measures, so that similar
problems may not occur inthe future. The controller has to
ensure that the set targets, budgets and schedules are
attained or followed in letter and spirit. There must be
proceduresto bring to light the failure to attainatarget. The
control-systemhas to (i) prepare sales and market forecasts;
(ii) determine the level of sales-budget; (iii) determine the
sales-quotas for each salesman; (iv) determine, review and
select distribution-channels; (v) organize an efficient sales
force; (vi) establishasystemof sales-reporting; (vii) establish
a system of statistical sales-credit; (viii) establish stock-
control system(s); (ix) review of performance of the sales-
force; and (x) establish periodical testing programmes. In a
big organization, each salesman is assigned a territory (not
so big that it cannot be adequately covered). Eachsalesman
has a target, set for specific period. From the weekly and
monthly sales-reports, the control systemisestablished, that
will prepare records whether a particular salesman is
working efficiently or not.
(4) Motivating: Motivation is essentially a human resource
concept. It aimsto weldtogether distinctive personalitiesinto
an efficient team. For this, knowledge of human psychology
is needed, as a means of understanding behaviour patterns.
This is especially important in the case of the sales-force.
Only motivatedsales-personscanachieve company sgoals.
OBJECTIVESOF SALESMANAGEMENT
Every business firm has certain objectives to achieve. These
objectives may be very explicit and definitive, or they may be implicit or
general. Although, firms have different mixes of objectives, and they do
place differing emphasis, on individual ones, the typical objectives
include (i) profitability, (ii) sales-volume, (iii) market share, (iv) growth,
and (v) corporate-image. While all these objectives are important to a
business firm, the objectives, relating to sales-volume, market share and
profitability, are greatly affected by the effectiveness and efficiency, with
whichthe sales-functionismanaged.
Business firms, have, in fact, found that it is the most effective
management objective of the firm; that must emanate out of its overall
business or corporate objectives. The sales-management objectives of a
business firm, generally relate to the areas of (i) achieving sufficient
sales-volume, (ii) providing sufficient profit, and (iii) experiencing
continuing growth.
Generally, objectives of sales-management have to cover various
sales-functions, in an integrated manner. These objectives are to be
expressed, as faras possible, inmeasurable andquantitative terms,
and
should also be realistic and achievable. Since, there are more thanone
objective, these should be put, on a hierarchical manner (most-
important, down to the least important). To ensure their flawless
realization, they must be congruent, i.e., they must fit together, and not
be inconflict witheachother. For example, suppose youask asalesman
to cut his travelling expenses, and ask himto spend more time, in the
field. To make these two requirements, more meaningful, they must be
linkedwithspecific time-element.
The setting of objectivesshould not be based only onthe judgment
of the top-management. Rather, it should be formulated and finalised,
with the involvement of the sales-force, at the grass-roots level. In
addition, the processof setting of sales-objectivesshouldbegin, only after
the company has conducted benchmark studies, to find out, as to where
it stands interms of product, brand and market-sales and market share
trends(all inmeasurable terms).
SMBO( SALES MANAGEMENT BY OBJECTIVES) APPROACH
Itisanotherapproachto formulate andaccomplishsales-objectives
isthe salesmanagement by objectives(SMBO) technique. It isformulated
combined by sales manager and sales-force (representatives). It aims to
focus on (i) results, within a specified set of objectives and (ii)
participative style of management.
Processof SMBO
The operationalization of SMBO is a process, comprising of the
following steps:
(i) Setting goalsjointlywiththe salesman: Inthisprocessthe
goals for sales-man and sales managers are settled
simultaneously in the organization so that they can built a
close coordinationbetweenthemand lastly they achieve the
mainobjective of the organization.
(ii) Planning strategy to reach the objectives: There has to
be participative style of sales. Management proves to be a boon
to the top-management, in the sense of the close familiarity
of the salesman, withtheir markets. The outcome of the joint
exercise would be the development of astrategy that directs
the salesman to his objectives, following a plan, in the
correct sequence, with the correct timing, and must be
efficient, inthe use of resourcesof time andmoney.
Importance of SMBO
The importance of SMBOfor abusinessfirmisasfollows:
(a) Directing the salesman towards the broader sales and
Marketing objectivesof the Company;
(b) Providing abetter approach, from the view-point of the
salesman; and
(c) Motivating the salesman.
THE SALES ORGANIZATION
The main objective of any business firm is to sell effectively its
goods andservices to the consumer at reasonable prices. So long as the
business undertaking operates on a small-scale; the proprietor can
handle himself, or with the help of a few salesmen, under his direct-
control and supervision. But, as the business grows and expands, the
size of the target market, to be covered to sell large quantities of goods
and services becomes too large to be controlled by the owner of the
business firm, personally. Therefore, these activities arises the need of a
sales-organization.
Effective sales executives insist upon sound organization. They recognize
that the sales organization must achieve both qualitative and quantitative
personal-selling objectives. A sales organization is both an orienting point
for cooperative endevour and a structure of human relationships. The sales
organization is not an end in itself but rather the vehicle by which
individuals achieve given ends. All in all the sales organization is the
vehicle through which the personal selling strategy is implemented. The
sales organization should be adjusted to fit ideally, to anticipate changing
situations. Shifts in marketing, in competition, and in other business factors
call for changes in the sales organization. The ideal sales organization has a
built in adaptability allowing it to respond appropriately in fluid and diverse
marketing environments.
Generally, an organization is a structured-process in which
individualsinteract witheachother for achieving stated-objectives. It isa
social and dynamic system. It emphasizes human-values. It is the job of
management, to integrate andco-ordinate all itsconstituents.
Setting up a sales organization
Not often is a sales organization built entirely fromscratch, since some structure usually exists.
Most problems of sales organization are problems of reorganization- the sales organization
exists and the goal is to make it more effective. It is appropriate never the less for the sales
executive to approach the organizational problem , each time it arises, as though a completely
new organization were being built. There are five main steps in setting up a sales organization.
1. Defining the objectives.
2. Delineating the necessary activities.
3. Grouping activities into jobs or positions .
4. Assigning personnel to position.
5. Providing for coordination and control.
NeedandImportance
The salesorganizationisrequiredfor the following purposes:
(i) To enable the top-management, to devote more time in
policy making for the growthandexpansionof business.
(ii) To divide and fix authority among the sub-ordinates so that
they may not evade work.
(iii) To avoid repetitionof dutiesand functionsso that there may
not be any confusionamong them.
(iv) To locate responsibility of each and every employee so that
they can complete the whole work in stipulated time; if not
thenthe particular personmust be responsible.
(v) To establishthe sales-routine inthe businessunit.
(vi) To stimulate sales-effort.
(vii) To enforce proper supervisionof sales-force.
(viii) To integrate the individual inthe organization.
Business organizations consist of an input, a processing-unit, an
output and a feedback-loop; with its own environment Organization as
an open-ended social and dynamic system. Feedback-loop, provides
control mechanism. Input isdrawnfromthe environment. It givesoutput
to satisfy the needs of environment, which the process itself transfers,
input to output through its operators. In this approach, the main
emphasis is on human-values. Workers are not simply cogs in the
machinery they are social beings first. They are the key players of the
production-system; and the management has to recognize this fact, that
each person is unique. This makes an organization, in the present-day
context, quite complex.
Functionsof Sale Organization
A salesorganizationperformsthe following functions:
(i) Analysis of markets thoroughly, including products and
market research.
(ii) Adoptionof soundanddefensible sales-policy.
(iii) Accurate market or salesforecasting and planning the sales-
campaign, based onrelevant dataor informationsuppliedby
the marketing researchstaff.
(iv) Deciding about prices of the goods and services; terms of
sales and pricing policies to be implemented inthe potential
andexisting markets.
(v) Labelling, Packaging and packing, for the consumer, who
wants a container, whichwill satisfy his desire for attractive
appearance; keeping qualities, utility, quantity, and correct
price andmany other factorsinview.
(vi) Branding or naming the product(s) and/or services to
differentiate them from the competitors and to recognise
easily by the customer.
(vii) Deciding the channels of distribution for easy accessibility
andtimely delivery of the productsandservices.
(viii) Selection, training and control of salesmen, and fixing their
remuneration to run the business operations efficiently and
effectively.
(ix) Allocation of territory, and quota setting for effective Selling
andto fix the responsibility to the concernperson.
(x) Sales-programmes and sales-promotion-activities prepared
so that every sales activity may be completed in a planned
manner
(xi) Arranging for advertising and publicity to inform the
customer about the new products and services and their
multiple uses.
(xii) Order-preparation and office-recording to know the
profitability of the business and to evaluate the performance
of the employees.
(xiii) Preparation of customer s record-card to the customer
loyalty about the products.
(xiv) Scrutiny and recording of reports to compare the other
competitorsandto compare withthe past period.
(xv) Study of statistical-records and reports for comparative
analysesintermsof sales, etc.
(xvi) Maintenance of salesman s records to know their efficiency
andto developthem.
Structure of SalesOrganization
The structure of sales organization differs from company to
company. There may be one very small and simple with only a few
salesmen. At the other extreme, there may be one quite complex, withmany
sub-organizations, based upon divisions, according to territory, product
andmarketing-functions. The structure of the sales-organization, usually
dependsuponthe following factors:
(i) Nature andsize of the firm.
(ii) Methodsof distribution, adoptedby the firm.
(iii) Selling-policiesof the firm.
(iv) Financial conditionsof the firm.
(v) Personality of the salesmanager.
The other dimensionof the sales-organization-structure, is related
To:-
(i) What shall be the statusof the salesmanager?
(ii) What functionsshall hisdepartment perform?
(iii) What shall be the strengthof the department? etc.
These are many issues, which, besides being based onthe factors,
listed inthe procedure shall depend uponthe state of the acceptance of
the modemmarketing concept, withinthe organization, andthe extent to
which, it is found to permeate within it. We have some firms in India,
where the sales manager is the head of total marketing and sales-
operationsof the company; otherswhere the headof the sales-operations
of the company, is a functional director of the company s board of
directors, andresponsible for total sales-operationsof the company.
Further, to carry out the functions of the sales-organization
successfully, the salesdepartment isdividedinto sub-departments. Each
sub-department is put under anofficer, who is responsible to the sales-
manager, who isthe headorchief executive officer(CEO) of the company.
For example, inthe case of a big business firm, these sub-departments
could be (i) market-research, (ii) advertising, (iii) sales-promotion, (iv)
recruitment and training, (v) credit and collection, (vi) sales-office for
receiving the orders and arranging to dispatch goods to their
destinations.
Stepsinestablishing asalesstructure
The following procedure may be adopted to, establish a practical
andviable sales-organizational structure:
(i) Begin with a historical profile of the company s allegiance,
overall organization and top-management philosophy of the
firm.
(ii) Analyze the requirements of the company and the sales-
department, particularly interms of its: size, positioninthe
market, nature of activities, product mix, nature of
customers, state of competition, and sales-people and their
ambitions.
(iii) Appraise the potential of the company, intermsof itsimpact
on the financial, technical, scientific and human resources,
existing currently.
(iv) Analyze the prevailing working-atmosphere and state of
communications, especially from the view-point of
relationship and human-feelings involved in such
relationships.
(v) List the various administrative-details, connected with the
company.
(vi) Prepare a note, relating to the various administrative-details
including aspects like hierarchy, spanof control, etc. onthe
sales-department, and overall organization of the
department.
(vii) Describe the procedures and Processes to be followed for
executing varioustasks.
viii) Based on the above, prepare a draft-structure of the sales-
department, giving job-descriptions of the whole of the
department, andawho swho of the department.
(ix) Examine the structure, fromthe point of view of viability and
practicality.
Inthe light of the complexities and vastness of the above process,
for creating a sales structure, once again, it is important to note that
variousindustries, though being equally efficient, and of the same
category, organize their sales-departments, indifferent ways.
BASIC TYPES OF SALES ORGANIZATIONAL STRUCTURES
Line Sales Organization- this is the oldest and simplest sales organizational structure. It is
widely used in smaller firms and in firms with smaller numbers of selling personnel for instance
in companies that cover a limited geographical area or a narrow product line. The Chain of
command runs down from the top sales executives down through subordinates. All executives
exercise line authority and eachsubordinate is responsible only to one person on the next higher
level. Line of authority runs vertically through the structure and all persons on any one
organizational level are independent of all others on that level.
Line & Staff Sales Organization the line and staff sales department is found in large and
medium sized firms employing substantial numbers of sales personnel, and selling diversified
product line over wide geographical areas. This kind of organization provides the top sales
executive with a group of specialists n experts in dealer and distributor relations, sales analysis,
sales personnel, sales promotion, sales planning, sales training, warehousing etc. This staff helps
to conserve the top sales executives time and frees them from excessively detailed work. They
make it possible for their chiefs to concentrate their efforts where they have the most skill. Staff
sales executives do not have authority to issue orders or directives.
Functional Sales Organization- This type of sales organizationis based upon the premise that
each individual in an organization, executive and employee, should have a few distinct duties as
possible. The principle of specialization is utilized to the fullest extent. Duty assignments and
delegations of authority are made according to function. The coordinating executive is the
director of salesadministrationall executiveson the next level are specialists.
Committee Sales organization the Committee is never the sole basis for organizing a sales
department. It is a method or organizing the executive group for planning and policy formulation
while leaving actual operations, including implementation of plans and policies to individual
executives. Thus many firms have a sales training committee ( comprised of the general sales
manager, his or her assistants, the sales training manager and perhaps representative divisional
or regional sales managers) that meets periodically to draft training plans and formulate sales
training policies.
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3. SALES PROCESS AND CAREERS
preparation for sales task
Steps in the selling process
Characteristics of sales jobs
Types of sales jobs
Success in selling
PREPARATION FOR SALES TASK
This involves preparation for a selling task. It covers a situation where there is little or no
scope for salesperson to bargain with the buyer and where selling may involve a degree
of negotiation between buyer and seller. In many selling situations, buyers and sellers
may negotiate price, timing of delivery, service payment and credit terms and so on.
These are referred to as Sales Negotiations. In others, the salesperson have no scope for
discussion, it is take it or leave. This is usually termed as pure selling.
PREPARATION FOR PURE SELLING AND SALES NEGOTIATIONS
A number of factors can be examined in order to improve the chances of sales
success in both sales negotiations and pure selling.
1. Product knowledge
2. Knowledge of competitors
3. Sales presentation planning
4. Setting sales objectives
5. Understanding buyer behavior
1. Product knowledge and benefits
Knowledge of product features is insufficient for sales success. Since people buy
products for the benefits they offer, successful sales people relate product features
to customer benefits; product features are the means by which benefits are
derived. The way to do this is look at products from the customers point of view.
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It is only by analyzing the products through this way that they will be convincing
in industrial selling, the sales person is called upon to be an adviser or consultant
who is required to provide solutions to problem in some cases this may require a
deep understanding of the nature of customer business so that the salesperson can
be able to appreciate customer problems and suggest the most appropriate
solutions. The sales person must not only know his product benefit but also types
of situation where each would be appropriate.
2. Knowledge of Competitors Products and their benefits
This offers the following benefits:-
i) It allows a salesperson to offset the strength of competitors products
which may be mentioned having many different kinds of skill or
ability; easily able to change to change from one kind of activity to
another.
By potential buyers, against their weakness e.g. a buyer might say,
competitor Xs produts offers cheaper maintenance costs, to which a
salesperson might reply yes, but these costs savings are small
compared to the fuel savings you get with our re.
ii) Industrial Selling Sales Engineers may work with buying organization
in order to solve a technical problem. This may result in, order
specification being drawn up in which sales engineers may have an
influence. It is to the benefit of sales engineers that specification
reflects the strengths and capabilities of their products rather than
competitors. Thus knowledge of competitive strengths and
weaknesses will be an advantage in this situation.
Competitive Information can be sourced from
a) Sales catalogues and price lists.
b) Talking with buyers.
c) Observation e.g prices in Supermarkets.
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This information should be kept in files for quick reference.
3. Sales Presentation Planning
Although versatility, flexibility and the ability to think on ones feet are
desirable attributes there are considerable advantages to presentational
planning.
Advantages of presentational planning
i) The salesperson is less likely to forget important consumer benefits associated
with each product within the range he is planning.
ii) The use of visual aids and demonstrations can be explained into the
presentation at the most appropriate time to reinforce the benefits the
salesperson is communicating.
iii) It builds confidence in the salesperson, particularly the newer less experienced
type that he is well equipped to do the job efficiency and professionally.
iv) Possible objections and questions can be anticipated and persuasive counter-
argument prepared. For example, many price objections can be countered by
reference to higher product quality, greater durability, higher productivity and
lower offsetting life-cycles cost e.g. lower maintenance, fuel or manpower
costs.
4. Setting Sales Objectives
This involves determining what a salesperson wants to accomplish in his visit to a
potential customer.
Examples include:-
- To determine the customer needs.
- To have customer visit the production site.
- To have the customer try the product e.g. fry on an aircraft.
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- To have the customer compare the product versus competitive products in
terms of measurable performance criteria.
- to close the sale.
5. Understanding Buyer Behavior
Many organizational buying decisions are complex, involving many people whose
evaluative criteria may differ, and that the purchasing officer may play a minor
role in deciding which supplier to choose, particularly with very expensive items.
- who makes the decision
- how the decision is made
- who influences
- who uses
- The practical implication of these facts is that careful preparation may be
necessary for industrial sales people, either when selling to new
companies or when selling to existing customers where the nature of the
product is different.
- The salesperson should take time to establish who the key influencers and
decision makers are, the name and position of each key influencer and
decision maker times most suitable for interview, the type of competitive
products previously purchased by the buying organization, and threats to a
successful sale or special opportunities afforded by the situation.
1) Threats include personal prejudices held by key people against the sales person,
his co. and products positive factors include common interests, favorable
experiences with other types of products sold by the salespersons co.
PREPARATION FOR SALES NEGOTIATIONS
In addition to the factors outlined above, a sales negotiator will benefit by paying
attention to the following additional factors during preparation.
i) assessment of the balance
ii)
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i) Assessment of the balance of power
In the sales negotiation, seller and buyer will each be expecting to conclude a deal
which is favorable to themselves. The extent to which each is successful will depend
upon their negotiating skills and the balance of power between the parties. This
balance will be determined by four factors.
a) The number of options available to each party.
If a buyer has only one option to buy from the seller in question then that
seller is in a powerful position. If the seller, in turn, is not dependent on the
buyer, but has many attractive potential customers for his products, then again
he is in a strong position conversely, when a buyer has many potential sources
of supply, and a seller has few potential customers, the buyer should be able to
extract a good deal. Many buyers deliberately contact many supplies in order
to strengthen their bargaining position.
b) The Quality and Quantity of Information held by each party. (Knowledge is
power-Machiavell) if a buyer has access to a sellers cost structure then he is in a
powerful position to negotiate a cheaper price or avoid paying too high a price. If
a seller knows how much a buyer is willing to pay, then his power position is
improved.
c) Need Recognition and Satisfaction
- The greater the salesperson understands of the needs of the buyer and the
more capable he is in satisfying those needs, the stronger will be his
bargaining position.
- In some industrial marketing situation suppliers work with buying
organization to solve technical problems. In this way this sellers
(suppliers) increases their negotiation position.
- The buyer, who believes that his needs can only be satisfied by one
company, will be weak in his negotiating stance.
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d) The Pressures on the Parties
- Where a technical problem is of great importance to the buying
organization, and its sole difficult, any supplier who can solve it will gain
immense bargaining power.
- One the other hand, if there are pressures on the salesperson because of
lower sales returns, then the buyer will be able to extract extremely
favorable terms during negotiations in return for purchasing from him.
- The implications of these determinants of the balance of power are that
before negotiations (and indeed, during them) a sales person will benefit
assessing the relative strength of his power base. This implies that he
needs information.
- If the seller knows the number of companies who are competing for order,
the criteria used by the buying organization when deciding between them,
the degree of pressure on key members of decision making unit and
formula they might use for assessing price acceptability, an accurate
assessment of the power balance should be possible.
This process lessens the chances of pricing too low or giving other
concessions like favorable payments terms.
2. Determination of negotiating objectives
It is prudent for negotiators to set objectives during the preparation stage. This
reduces the likelihood of being swayed by the heat of negotiating battle and
accepting a deal which should have been rejected.
This process is analogous (similar) to buyer at an auction paying more than he can
afford because he allows himself to be swept along by the bidding.
Additionally, when negotiation is conducted by a team, discussion of objectives
helps in coordination and unity.
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Types of Negotiating Objectives
i) Must have objectives (Minimum price), This defines a bargainers minimum
requirements e.g. the minimum price at which a seller is willing to trade. This
determines break even-point.
ii) Would like objectives (maximum price-highest price) These are the
maximum a negotiator can expect to get; e.g. the highest price a seller feels he
can realistically obtain.
This determines the opening positions of buyers and sellers.
The price actually agreed will depend upon the balance of power between the
two parties and their respective negotiating skills.
3. Concession Analysis Analysis of things which either partly can concede in order
to win the negotiation since negotiation implies movement in order to
achieve agreement, it is likely that concessions will made by at least one partly
during the bargaining process.
- Preparation can aid negotiators by analyzing the kinds of concessions
which might be offered to the other side.
Concession analysis involves determining the cost of concessions to the
seller and value of these to the buyer.
- The following are issues which may be examined during concession
analysis:
i) Price
ii) Time of delivery
iii) The product its specification [product specifications]
iv) Payment on dispatch, on receipt, in working order, credit terms.
v) Mode of delivery.
vi) After sales service e.t.c.
The aim of concession analysis is to ensure that nothing which has value
to the buyer is given away freely during negotiation. A skillful negotiator
will attempt trade concessions so that ultimately an agreement which
satisfies both parties is reached.
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4. Proposal Analysis Analysis of likely objections/demon. This involves
estimating the proposals and demands the buyer is likely to make during the
course of negotiation and sellers reaction to them.
This is analogous similar to the anticipation of objection in pure selling. It
helps when a decision have to be made in the heat negotiation.
STEPS IN THE SELLING PROCESS
Personal selling process consists of the following steps:
1. Prospecting and qualifying.
2. Pre-approach.
3. Approach.
4. Presentation and demonstration.
5. Handling objections.
6. Closing.
7. Follow-up.
1. Prospecting and Qualifying
This is concerned with identifying and qualifying potential customers. In prospecting
sales people must obtain leads on people who may have need for the companys products
or service. To turn lead into a prospect, the lead must be qualified in terms of need or
want, ability to buy, authority to buy and eligibility to buy. Other basis of qualifying
includes volume of business, location and possibilities of growth.
a) The need: The lead must have a need or want for the product. It may be a waste of
time attempting to sell a product to somebody who does not need it. However the sales
person can stimulate unrecognized or latent needs by explaining the advantages of the
product.
b) Ability to buy: The lead must have the ability to buy the product. The information on
this can be obtained from their financial statements credit rating bureaus, other customers
and competitors. Where an organization does not have ability to buy there is little use in
pursuing negotiations.
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c) Authority to Buy: Most sales people have wasted many hours talking to some person
with an official sounding title that did not have authority to make purchase decision.
Although the purchasing manager may have the formal authority to buy a piece of
machinery, sometimes the final decision may have to come from managing director. In
organizations, buying decisions are usually made by committees rather than a single
person. At household level the decision to buy a product may also be shared e.g. in
buying an appliance one spouse decides what to be bought and the other decides on
features, model and where to buy it.
d) Eligibility to Buy
The lead must be eligible to buy the product e.g. life insurance sales people know that
there are many people who want to buy life insurance policies but they are ineligible
because they cannot pass a health examination test. Similarly many people would like to
buy at wholesale, but manufacturers would alienate their retailers and wholesalers if they
sold to these people.
NB: When the lead qualifies on all the above four criteria, the individual or firm can be
declared a prospect.
Approaches to locating and qualifying prospects (Sources of leads and prospects)
i) Centers of influence joining various organizations (country clubs, golf
clubs professional organizations) or participating in activities where you can
meet and interact with influential people who may become customers or refer
prospects to you.
ii) Spotters people who seek out leads for sales people and Sometimes paid a
fee. A sales person often persuades ordinary working people (such tax drivers,
police officers, retail clerks and secretaries to provide leads and information
about prospects usually for a fee. They could also be current customers who
provide referrals to potential prospects.
iii) Endless Chain: This involves asking everyone you call, on the names for
potential buyers. It also involves asking testimonials from satisfied customers
or using referrals and recommendations from satisfied customers. Through
this the sales representative can develop an endless chain of leads.
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iv) Observation: Organized observation especially reading local newspapers can
provide sales people with many leads. Local newspapers contain information
on deaths, automobile accidents, fires, new construction, job offerings and
promotions. These items are sources of leads, since they indicate a change in
peoples needs for various products or services. Also by merely driving
around or talking to various people doing everyday activities, sales people can
gather information about possible prospects e.g. if he hears that a certain
company is recruiting he can conclude that they need to purchase a certain
office equipment.
v) Advertising: Effective ads should stimulate interest in your offerings and
encourage potential customers to initiate the contact. When they respond to
ads the organization should respond quickly to their inquiries.
vi) Cold Canvassing: This involves knocking on doors in a promising
neighborhood, or calling people listed in the telephone book or dropping at
offices unannounced or expected.
vii) Internal Records: Obtaining information from company records (e.g.
customer lists for other products) may reveal many potential prospects.
viii) Leads can also come from, Suppliers, Dealers, Non-competing sales people.
Bankers, Directories.
2. Pre-approach planning a sales call
This is the step in the selling process in which the salesperson learns as much as possible
about a prospective customer before making a sales call (sales visits).
This may involve knowing what the buyer needs, who is involved in the buying, its x-
tics, and buying styles.
It also involves setting call objectives which range from
1) Qualifying the prospect
2) Gathering information on prospects and
3) Making an immediate sale.
Another decision is deciding the method of approaching the prospect (lead). It may
involve making a personal visit, phone call, or sending a letter or E-mail.
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The sales person should also decide on the best time to approach the prospect. This is
because prospects may be busy when the sales person wants to approach them. There is
need to book an appointment.
3. Approach
This is the step in the selling process in which the sales person meets and greets the buyer
to get the relationship off to a good start.
It involves the sales persons appearance, opening lines and the follow-up remarks. The
opening lines should be positive such as Mr. Kariuki, I am Mr. Otieno from ABC
Company, my company and I appreciate your willingness to see me. I will do my best to
make this visit profitable and worthwhile for you and your company.
This opening might be followed by some key questions to learn more about customer
needs or by showing a display or sample to attract the buyers attention and curiosity.
4. Presentations and demonstration
Presentation is the step in the selling process in which the sales person tells the products
story to the buyer, showing how the product will make or save money for the buyer.
The sales person describes the product features showing how they benefit the consumer.
The sales person uses need-satisfaction approach where by he starts by identifying
customer needs by allowing the latter to do most of the talking.
This approach calls for good listening and problem solving skills.
Note: The purchasing managers dislike sales people who are pushy, late and unprepared
or disorganized. The qualities they value most include empathy, honesty, dependability
and thoroughness
Sales presentations can be improved with demonstration aids, such as booklets, flip
charts, slides, videotapes and product samples. If buyers can see or handle the product
they will better remember its features and benefits.
5. Handling objections
This is step in the selling process in which the sales person seeks out, clarifies and
overcomes customers objection to buying.
Customers almost always have objections to make a sale. The problem (objection) can
either be logical or psychological and unspoken.
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In handling objections the sales person should use a positive approach to seek out hidden
objections, ask the buyers to clarify any objections, i.e. they should take objections as
opportunities to provide more information and turn objections into reasons for buying.
Sales people need training on how to handle objections.
6. Closing
This is a step in the selling process in which the sales person asks the customer for an
order. This is usually after handling the prospects objections.
To close a sale effectively the sales person should know how to recognize the right
moment to close the sale. They should know how to recognize closing signals from the
buyer including physical actions, comments and actions e.g. the customer might nod
approvingly, ask about prices and credit terms.
The sales person can use one of the following closing techniques.
i) Ask for an order.
ii) Review points of agreement.
iii) Offer to help write up the order.
iv) Ask the buyer whether he wants this model or that one.
v) Note that the buyer will lose out if the order is not placed now.
The sales person may offer the buyer special reasons to close, such as a lower price or an
extra quantity at no charge.
7. Follow-up
This is the last step in the selling process in which the sales person follows up after the
sale to ensure customer satisfaction and repeat business.
This involves organizing follow-up call to ensure that there is proper installation,
instruction and servicing. This visit would reveal any problems, assure the buyer of the
sales persons interest and reduce any buyers concern that might have arisen since the
sale.
NB/ Relationship marketing
The principles of personal selling discussed above are transaction-oriented. Their aim is
to help the salesperson to close a specific sale with the customer. However companies
are not only interested in making the sale but winning and keeping customers.
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Thus most companies are moving away from transactional marketing, which emphasizes
on making a sale. Instead they are practicing relationship marketing, which emphasizes
maintaining profitable long-term relationships with customers by creating superior
customer value and satisfaction.
Companies operating in mature markets and facing stiffer competition are realizing that it
is hard and costly to attract new customers than to keep present customers. Thus, they
aim to build satisfying relationship with customers particularly the most important ones.
Relationship marketing is based on the premise that important accounts need focused and
ongoing attention. Sales people working with key customers must study and understand
their problems. They should call or visit frequently, work with customer to help solve the
customers problems and improve its business and take interest in customers as people.
Characteristics of sales jobs:
(i) Job security:
Sales people are revenue producers and thus enjoying relatively good job security
compared with other occupational groups. Certainty individual jobs security depends on
individual performance, but in general, sales people are usually the least group to be
negatively affected by personnel cutbacks. Competent salespeople have some degree of
job security based on the universality of their basic sales skills. In many cases sales
people are able to successfully move to another employer may be even change industries
because sales skills are largely transferable.
(ii) Advancement opportunities:
As the business world continues to become more competitive the advancement
opportunities for sales people will continue to be on attractive dimension of sales careers.
In Highly competitive markets, individuals and companies that are successful in
determining and meeting customer needs will be rewarded. The sales jobs provide these
opportunities and helps sales rep to advance in careers
(iii) Immediate feedback: sales people received constant, immediate feedback in their
job performance. Usually the results of their efforts can be plainly observed by both
salespeople and their sales manager as a source of motivation and job satisfaction. They
also receive feedback from their customers and this can be stimulating challenging and
productive.
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(iv) Prestige: As the general public learn more about activities and qualifications of
professional salespeople, the image and thus the prestige of selling is improving. They
are seen as knowledgeable, well-trained educated and capable of solving customers
problems.
(v) Job variety: the jobs of salespeople are multifaceted (all-round) and dynamic. In
sales day-to-day variations on the job is the norm. Customer change, new products and
service are developed and competition introduces new demand at a rapid pace. The sales
person is able to do all these
(vi) Independence: sales jobs often allow independence of action. This is frequently a by
product of centralized sales operations in which salespeople hire and work away from
headquarters, therefore working from their homes and making their own plans for
extensive travel. Independence of action and freedom to make decisions are usually
presented as advantages that sales positions have over tightly supervised jobs. This
freedom is under scrutiny from sales managers.
(vii) Compensation: it is generally thought to be a strong advantage of sales career pay is
closely tied to performance especially if commissions and bonuses are part of the pay
package. Top sales people can earn hundred of thousands of shillings annually and
sometimes exceed the managers pay.
Types of personal selling jobs:
(i) Sales support: personnel not usually involved in the direct solicitation of purchase
orders. Their main responsibility is dissemination of information and performance of
other activities designed to stimulate sales. They may include:
(a) Missionary salespeople: there are similarities between religious and sales
missionaries. They spread the word with the purpose of conversion to customer status.
Once converted the customers receive reinforcing messages new information and the
benefit of the missionary activities to strengthen the relationship between buyer and
seller..
(b) Technical support salespeople: they assist in design and specification process
installation of equipment, training of the customers employees and follow up service of a
technical nature.
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(ii) New business: these may include pioneers and order getters. Pioneers are constantly
involved in with new product, new customers or both. Their tasks require creative selling
and the ability to contain the resistance to change that will likely be present in
prospective customers. Order getters actively seek orders usually in a highly competitive
environment. All pioneers are also order getter but not all order getters are pioneers. In
both case they start by selling a single product but are followed by others in the product
line.
(iii) Existing business: the majority of existing business work is done by order-takers.
They are not involved in creative selling. They follow a pioneer salesperson and take
over the account after the pioneer has made the initial sale. Their strength tends to depend
in the services provided by the type of salesperson.
(iv) Inside sales: this refers to non-retail salespeople who remain in their employers
place of business while dealing with customers. They may be passive or active.
(v) Direct to consumer sales: they are the most numerous type. They range from part-
time Often, temporary sale person in a retail store to the highly educated, professionally
trained stockbroker. Selling of service is more challenging.
(vi) Combinations sales job: (type passage)
Qualifications and skill of a successful sales person:
(i) Empathy: the ability to see things as others would see them is extremely crucial for
successful interaction between a buyer and a seller. An empathetic salesperson is
presumably in a better position to tailor the sales presentation to the customer during the
planning stage. They can adopt feedback during presentation.
(ii) Ego drive: an indication of the degree of determination a person has to achieve goals
and overcome obstacles in striving for success is manifested as an inner need to achieving
personal gratification. Sales people must have this drive.
(iii) Ego strength: the degree to which a person is able to achieve an approximation of
inner drive-sales people with high levels of ego strength is likely to be self-assured and
self accepting. Self efficacy (worth) also increases with ego strength.
(iv)Interpersonal communication skills: including listening and questioning are
essential for sales success. To meet customer needs sales person must be able to solicit
opinions, listen effectively and confirm customer needs and concern; they must have
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ability to adopt presentation according to the solution and verbal communication skills
following close behind.
(v) Enthusiasm: this is general enthusiasm attitude and a special enthusiasm for selling.
RECRUITMENT AND SELECTION
INTRODUCTION
Recruitment is a positive process in which a company attracts apool
of talented people, whereas selectionis a negative process through
whichthey screenpeople and finally select desired number of personnel
who are offered appointment. Attracting and selecting new sales
personnel isanimportant aspect of the salesmanager'sjob.
Recruitment is the procedure to obtain a good number of people with
the potential capability of becoming good sales personnel. After
attracting a large number of people, it becomes feasible to select the
individuals, whichfit the needs of the organization.
Appropriate recruiting and selectionpolicies and procedures, and their
skilful execution result in greater overall efficiency of salesdepartment.
Good selectionfitsthe right personto the right job, thereby increasing job
satisfactionand reducing the cost of personnel turnover. In addition
training costs are reduced, either because those hired are more capable of
absorbing training or because they require lessformal training.
RECRUITMENT PROCESS
To ensure the new recruits have the aptitude necessary to be
successful inaparticular type of sales job, certainprocedures should be
followedinthe recruitment process. The stepsinthisprocessare:
(a) Conductingajob analysis
Before acompany cansearchfor aparticular type of salesperson, it
must know something about the sales job to be filled. To aid in the
process, a job analysis should be conducted to identify the duties,
requirements, responsibilities, and conditions involved in the job. A
proper jobanalysisinvolvesfollowing steps:
1. Analyze the environment inwhichthe salespersonisto work.
For example: (a) what is the nature of the competitionfaced
by the salespersoninthis job? (b) what is the nature of the
customers to be contacted, and what kinds of problems do
they have? (c) what degree of knowledge, skill, and potential
isneededfor thisparticular position?
2. Determine the duties and responsibilities that are expected
from the sales-person. In so doing, information should be
obtained from (a) salespeople; (b) customers; (c) the sales
manager; and (d) other marketing executives, including the
advertising manager, marketing services manager,
distribution manager, marketing research director, and
credit manager.
3. Spend time making calls withseveral salespeople, observing
and recording the various tasks of the job as they are
actually performed. This should be done for a variety of
different types of customers and over arepresentative period
of time.
(b) Preparingajob description
The result of aformal job analysis is ajob description. Since ajob
description is used in recruiting, selecting, training, compensating and
evaluating the sales force, the descriptionshouldbe inwriting so that it
canbe referredto frequently. The writtenjobdescriptionlets
prospective jobapplicants, aswell ascurrent salespersonnel, know
exactly what the dutiesandresponsibilitiesof the salespositionare and
onwhatbasisthe new employee will be evaluated.
The jobdescriptionisprobably the most important single tool used
in managing the sales force. It is used not only in hiring but also in
managing and sometimesasabasisfor firing salespeople. It providesthe
sales trainer with a description of the salespeople's duties and enables
him or her to develop training programmes that will help salespeople
performtheir duties better. Job descriptions are also used indeveloping
compensation plans. Often, the type of job determines the type of
compensation plan that will be used. Job descriptions aid managers in
supervision and motivation, and they are used as an official document
that is part of the contract between management and a salesperson's
union. Finally, a job description puts management in a position to
determine whether eachsalespersonhasareasonable workload.
(c) Developingasetof job qualifications
The duties and responsibilities set forth in the job description
shouldbe convertedinto aset of qualificationsthat arecruit shouldhave
in order to perform the sales job satisfactorily. Determining these
qualifications is probably the most difficult aspect of the entire
recruitment process. One reason is that the manager is dealing with
human beings; therefore, a multitude of subjective and very complex
characteristicsare involved. Specific qualificationssuchaseducationand
experience shouldbe includedinthe jobqualification, thus making good
candidates easier to identify. But most firms also try to identify
personality traits that presumably make better salespersons, such as
self-confidence, aggressiveness, etc.
(d) Attractingapool of applicants
The next major step inthe recruitment process is attracting apool
of applicantsfor the salespositionto be filled. All large companieswitha
sales force have a continuous need to identify, locate, and attract
potentially effective salespeople. The candidates recruited become the
reserve pool of salesstaff fromwhichnew salespeople will be chosen. The
quality of this groupwill predict the future successes or problems of the
salesorganization.
SOURCES OF RECRUITMENT
There are many places a sales manager can go to find recruits.
Salesmanagersshouldanalyze eachpotential source to determine which
oneswill produce the best recruitsfor the salespositionto be filled. Once
goodsourcesare identified, salesmanagersshouldmaintainacontinuing
relationship with them, even during periods when no hiring is being
done. Good sources are hard to find, and goodwill must be established
betweenthe firmandthe source to ensure goodrecruitsinthe future.
Some firms will use only one source; others will use several. The
most frequently used sources are persons within the company,
competitors, non-competing companies, educational institutions,
advertisements, andemploymentagencies.
(a) Personswithinthe company
Companies oftenrecruit salespeople fromotherdepartments, such
as production or engineering, and from the non-selling section of the
sales department. The people are already familiar withcompany policies
as well as the technical aspects of the product itself. The chance of
finding goodsalespeople withinthe company shouldbe excellent because
salesmanagersknow the people andare aware of theirsalespotential. In
fact, most firms turnto non-sale personnel withinthe company as their
first source of new salesrecruits.
Hiring people fromwithinthe company canlift morale because a
transfer to sales is often viewed as a promotion. But transferring
outstanding workers fromthe plant or office into the sales department
does not guarantee success. In some cases hostility can arise among
plant and office supervisors, who feel their personnel are being takenby
the salesdepartment.
Recommendations fromthe present sales force and sales executive
usually yield better prospects thanthose of other employees because the
people insalesunderstandthe neededqualifications.
(b) Competitors
Salespeople recruited from a competitor are trained, have
experience of selling similar products to similar markets, and should be
ready to sell almost immediately. But usually apremiummust be paidin
orderto attractthemfromtheirpresentjobs.
Some salesmanagersare reluctant to hire competitors' salespeople
because the practice is sometimes viewed as unethical. But is it? Is it
really any different thanattempting to take a competitor's customers
ormarket share? No. But it is unethical if the salesperson uses
valuable confidential informationincompeting againstthe former
employer.
Recruiting competitors' salespeople may bring other problems.
Althoughthese people are highly trained and know the market and
the product very well. It isoftenhardforthemto unlearnoldpractices.
They may not be compatible withthe new organizationandmanagement.
Also, recruits from a competitors usually are expected to switch
Their customers to the new business; if they are unable to do so, their
newemployer may be disappointed.
The potential for these problemsto arise may be evaluatedwithone
question: why is this personleaving the present employer? A satisfactory
answer to this question frequently clears up many doubts and usually
leads to a valuable employee. The difficulty arises, however, in
determining the real answer. Often, it is almost impossible to assess
accurately why someone is looking foranotherjob. Goodsales managers
mustbe able to evaluate effectively the informationthey get.
(c) Non-competingcompanies
Non-competing firms can provide a good source of trained and
experiencedsalespeople, especially if they are selling similar products or
selling to the same market. Eventhoughsome recruitsmay be unfamiliar
with the recruiting firm's product line, they do have selling experience
andrequire lesstraining.
Companies that are either vendors or customers of the recruiting
firmcanalso be anexcellent source of candidates. Recruits fromthese
sourcesalready have some knowledge of the company fromhaving soldto
or purchased from it; their familiarity reduces the time it will take
to make themproductive employees. Another advantage of recruitsfromthe
sourcesisthat they are already familiar withthe industry.
(d) Educational institutions
Highschools, adult evening classes, business colleges, vocational
schools, juniorcolleges, anduniversitiesare all excellent sourcesof sales
recruits. Large firms usually are successful in recruiting from
universities, but small firms tend to be more successful in recruiting
fromsmall educational institutionsorfromothersources.
While most college graduates lack specific sales experience, they
have the educationandperspective that mostemployersseekinpotential
sales managers. College graduates tend to adapt more easily than
experienced personnel. They have not yet developed any loyalties to a
firmoranindustry.
A major problem in recruiting from college campuses used to be
the unfavourable image of sales. Selling typically wasassociated withjob
insecurity, low status, and lack of creativity, but this situationhas been
changing inrecent years. Collegesgraduatesare beginning to realize that
selling provides challenge and a sense of accomplishment, that it is
complex and exciting, that it allows themto be creative, that it rewards
themwell and indirect proportionto their level of achievement, and that
it provides opportunity for rapid advancement. In short, many students
today know that asalescareer isagooduse of acollege education.
Small firms are less likely to recruit oncollege campuses because
many graduates prefer large, well-known corporations with
training programs and company benefits. College students tend to
avoid small companies because these companies usually employ few
college graduates, and students are afraid that people without college
degreeswill not understandor appreciate their needsandexpectations.
(e) Advertisements
Classified advertisements in newspapers and trade journals are
another source of recruits. National newspapers and various
trade journals are used in recruiting for high-caliber sales and
salesmanagement positions. However, most firms that use
advertising, especially inlocal newspapers, are recruiting forlow-level
salespositions. Many businessesuse advertising only asalastresort.
While advertisements reach a large audience, the caliber of the
average applicant is often second-rate. This places a burden on those
doing the initial screening. The quality of applicants recruited by
advertisements canbe increased by carefully selecting the type of media
anddescribing the jobqualificationsspecifically inthe ad. To be effective,
arecruiting admust attract attentionandhave credibility. The
following elements should be included to ensure an ad's effectiveness:
company name; product; territory; hiring qualifications;
compensation plan, expense plan, andfringe benefits; andthe way to
contactthe employer.
(f) Employmentagencies
Employment agencies are among the best and the worst sources.
Most of the time it depends onthe relationship betweenthe agency and
the sales manager. The agency should be carefully selected, and a good
working relationship must be developed. Sales managers should make
sure thatthe agency clearly understandsboththe jobdescriptionand
the jobqualificationsforthe positionto be filled.
Inrecent yearsagencieshave steadily improvedandexpandedtheir
services. They can provide a highly useful service to sales managers by
screening candidates so that recruiters may spend more time withthose
prospectswho are most highly qualifiedfor the job.
SELECTION PROCESS
The recruiting process furnishes the sales manager witha pool of
applicantsfromwhichto choose. The selectionprocessinvolveschoosing
the candidates who best meet the qualifications and have the greatest
aptitude for the job. There are numerous tools, techniques, and
procedures that can be used in the selection process. Companies
typically use initial screening interviews, application forms, in-depth
interviews, reference checks, physical examinations, and tests as
selectiontools.
None of these should be used alone. Each is designed to collect
different information. While successful selectionof sales applicants does
not necessitate the use of all the toolsand techniques, the more that are
used, the higher the probability of selecting successful salespersonnel.
Selection tools and techniques are only aids to sound executive
judgement. They caneliminate the obviously unqualifiedcandidates and
generally spot the more competent individuals. However, inregard to the
majority or recruits who normally fall between these extremes, the
current tools canonly suggest whichones will be successful insales. As
aresult executive judgement isheavily reliedoninselecting salespeople.
(a) Initial screeninginterviews
The steps inthe selectionprocess vary fromcompany to company,
depending onthe size of the company, the numberof salespeople needed,
andthe importance of the positionto be filled. The purpose of the initial
screening interview is to eliminate, as soonas possible, the undesirable
recruits. Initial screening may start with an application form, an
interview, or some type of test. But no matter whichtool isinitially used,
it should be brief. The shorter it is, the ore it will cut downoncosts. But
it must not be so brief that it screensout goodcandidates.
(b) Applicationforms
Application forms are one of the two most widely used selection
tools (the otheris the personal interview). Anapplicationformis aneasy
means of collecting informationnecessary for determining anapplicant's
qualifications. Information requested on forms usually includes name,
address, position applied for, physical condition, educational
background, work experience, participation in social organizations,
outside interestsandactivities, andpersonal references. Other important
questions onanapplicationformrelate directly to the sales positionfor
whichthe applicationismade. For example:
Why do youwant thisjob?
Why do youwant to change jobs?
What minimumincome do yourequire?
Are youwilling to travel?
Are youwilling to be transferred?
Are youwilling to use your car for business?
What do youwant to be doing five yearsfromnow? Tenyears
fromnow?
Application forms will differ from company to company. On all
forms, however, it is illegal to include questions that are not related to
the job.
Some companies use a weighted application form that has been
developed from the regular application form by analyzing the various
items that help distinguish between good and poor salespeople. If
companies can show that items such as educational level, and years of
selling experience tend to be more related to success than are other
items, thenmore weight (importance) canbe placed ontheminmaking
hiring decisions. Thus, applicants who rate higher than an established
minimum number of points on these items are considered, and those
who fail to reachthe cutoff point are usually rejected.
An important function of application forms is to help sales
managers prepare for personal interviews with candidates for sales
positions. By looking over the applicationformbefore the interview, the
sales manager can get an initial impression of the applicant and can
prepare alistof questionsto askduring the interview.
(c) In-depthinterviews
The interview is the most used of the various tools for selecting
employees. A salespersonisseldomhiredwithoutapersonal interview. In
fact, as many as three orfour interviews are usually conductedwiththe
most desirable candidates. No other selectiontool cantake the place of
getting to know the applicantspersonally.
The personal interview isusedto helpdetermine if apersonisright
for the job. It can bring out personal characteristics that no
otherselectiontool is capable of revealing. The interview also serves as a
two- way channel of communication, whichmeans boththe company
andthe applicantcanaskquestionsandlearnabouteachother.
The questions asked during an interview should be aimed at
finding out certainthings: Isthe candidate qualifiedforthe job?Doesthe
candidate really want the job?Will thissalesjobhelpthe candidate fulfill
personal goals? Will the candidate find this sales position challenging
enough? These questions, like those onthe applicationform, are directed
atexamining the applicant'spastbehaviour, experiences, andmotivation.
Every sales managerwill use adifferent approachinattempting to
elicit useful information. The approach used will depend on the sales
manager'spersonality, training, andworkexperience.
Interviews differ, depending on the number of questions that are
prepared inadvance and the extent to whichthe interviewer guides the
conversation. At one endisthe totally structured, or guided, interview; at
the other end is the informal, unstructured type. In the structured
interview, the recruiter asks each candidate the same set of questions.
These are standardized questions that have been designed to help
determine the applicant's fitness for the sales position, structured
interviews canbe used for initial screening but are not useful inprobing
for in-depthinformation. A structured approachis particularly useful for
inexperienced interviewers. Since it helps and guide the interviewer and
ensures that all factors relevant to the candidate's qualifications are
covered.
At the other end of the continuum is the unstructured interview,
which is informal and non-directed. The goal of the unstructured
interviewing approachisto get the candidate to talkfreely onavariety of
topics. Frequently, the recruiter begins the interview by saying to the
candidate. Tell me about yourself", or by asking questions suchas "Why
didyoudecide to interview without company?"
Several problemsare associated withunstructured interviews. One
is that they do not provide answers to standard questions that can be
compared with other candidates' reponses or with the company's past
experiences. Also, considerable time may be spent on relatively
unimportant topics. However, personnel expertssay thistechnique isthe
best for probing an individual's personality and for gaining insight into
the candidate's attitudes and opinions. To administer and interpret
unstructuredinterviews, interviewersmust be well trained.
Therefore, many firms use a combination of structured and
unstructured approaches, usually referred to as a semi-structured
interview. Insemi-structuredinterviewsthe interviewer hasapreplanned
list of major questions but allows time for interaction and discussion.
This approach is flexible and can be tailored to meet the needs of
different candidatesaswell asdifferent interviewers.
(d) Reference checks
A company cannot be sure it has all the information on an
applicant until references have been thoroughly checked. Reference
checks allows acompany to secure informationnot available fromother
sources. References usually are checked while the application form is
processedandbefore the final interview takesplace.
In general, the quality of reference checks as a selection tool is
questionable. Checking on the names supplied by a candidate is often
seenas a waste of time because it is unlikely that serious problems will
be uncovered. Therefore, many firmstry to talkwithpeople who know the
applicant but were not listed on the application form. For reference
checking to be a useful selection tool, the sales manager must be
resourceful and pursue leads that are not directly given. If only one
significant fact isuncovered, it usually makesthe effort worthwhile.
References fromteachers andformeremployers are generally more
helpful than other types of references. Teachers can usually give an
indication of intelligence, work habits, and personality traits. Former
employers canbe used to find out why the personleft the job and how
well he or she got along with others. Reference checks can uncover
information about an applicant that may alter a salesmanager's
perceptionsof the person'ssalesability.
(e) Physical examinations
Many sales jobs require adegree of physical activity and stamina.
Poorphysical conditioncanonly hinderasalesperson's jobperformance;
therefore, a company should insist ona thoroughmedical examination
for all its sales recruits. The results from the examination should be
interpretedby adoctorwho isfamiliarwiththe demandsof the salesjob,
andthe sales managershouldbe notifiedof the results. Because of their
expense, physical examinations usually are not givenuntil arecruit has
passedmostof the stepsinthe selectionprocess.
(f) Tests
Testsare the most controversial toolsusedinthe selectionprocess.
The needfor applicationforms, reference checks, andpersonal interviews
is seldom disputed, but there are differences of opinion about whether
tests are necessary inthe hiring of salespeople. Questions regarding the
legality of testing have increased the complexity and the controversy
surrounding the use of testsasascreening tool. But researchhasshown
that test profile data can be useful to management in the process of
selecting and classifying sales applicants who are likely to be high
performers.
There are some basic tests used inthe selectionprocess of sales
personnel.
Intelligence tests: These tests measure raw intelligence and
trainability. Recent researchhas indicated that a salesperson's cognitive
ability or intelligence is the best indicator of future job performance.
Thus, although once looked down upon, the intelligence test is slowly
regaining statusasthe most effective tool for selecting salespeople.
Knowledge tests: These tests are designed to measure what the
applicant knowsabout acertainproduct, service, market, andthe like.
Sales aptitude test: These tests measure a person's innate or
acquired social skills and selling know-how as well as tact and
diplomacy.
Vocational interest tests: These tests measure the applicant's
vocational interest, the assumption being that a person is going to be
more effective andstable if he or she hasastrong interest inselling.
Achievement tests: These are tests that seek to determine how much
individuals know about the subject. Few standardized achievements tests
are used by industry, because special job skills require different
knowledge.
Test of habitual characteristics: They include tests of attitude, personality andinterest tests.
Attitude tests are more appropriate as morale measuring techniques than as selectionaids.
Personality tests- these tests attempt to measure the behavioural
traits believed necessary for success in selling, such as assertiveness,
initiative, andextroversion.
SALES TRAINING
INTRODUCTION
For effective operation of selling activities, sale force in terms of
manpower and womanpower is necessary for a business concern. For
attaining predeterminedobjectives; it is imperative that entire
manpowershould be in place. Manpower i.e. in this case salesforce is
one of the most precious resources of a business unit.
It takes a lot of years to build-up and to develop itself for efficient and
effective working. As we know that the effective sales organization is
the antipathy of any competitor. However, it must be emphasized that the
Sales-Force canbe effective only whenthe other ingredients of the
Marketing-Mix: product, price, place andpromotionare equally soundand
intact. To expect sales- people to become more productive; it is hardly fair.
Each ingredient of this Mix has to be emphasized equally so that its
productivity may be improved. Thus, the Sales-Force is the infantry
that has to visit customers, and/or channels of distribution to impart
information andknowledge; actually obtain orders from specific customers,
and ensure that existing customersare happy andsatisfiedwiththe company
anditsservice providedto themapart from, of course, looking for new
prospects.
SALESFORCE TRAINING
Training is very much important for salesforce to ensure that the
contents related to the product are described to the potential customer
and exiting customers efficiently and effectively. Generally, training
meansto trainthe employeesi.e. to improve their productivity to face the
challengescreatedby competition. The art of selling liesinpresenting the
benefits and multi-uses of the product so that the buyer gets the feeling
of satisfactionto hisneeds.
Not only, it isexpectedfromasuccessful salesmanthat he must be
well informed/intelligent in terms of knowledge but also he must be
skilled in the presentation of information/knowledge of himself. A
salesforce training programme, thus, aims at providing the required
knowledge about the products and the effective ways presentationto the
customers in the market. The nature and scale of both these skills
should be specified, in advance, so that the programme so conceived is
directedtowardspredeterminedanddefinite goals.
The Training-Programme may be for the-newly recruited salesmen
aswell asthose already inemployment withthe company to refreshtheir
knowledge. So, the first task for the Sales Manager/Training Manager is
to set objectives for suchtype of training programmes. For this purpose,
the first stepisto identify the gapbetweenthe standardof skillsrequired
andSalesmanscurrent standardinthe organization/company.
The level, they are supposed to achieve can be known easily by
reference to job specifications. Current-levels of skills, in the case of
existing Salesmen, can be determined through observations of their
actual working i.e., their knowledge about Product, Competition, selling-
skills etc. Though, a good Training-Programme should clearly state what
the Traineesare expectedto do, after their Training andthe periodwithin
whichthey should be able to do it. For guidance, the Training Manager,
may include Knowledge-Areas, viz. the Company, its Products, Practices
and Procedures; as well as the Product/Services and their Competition.
The Skill-Areas include (i) Sales-techniques, (ii) Work-Organization, and
(iii) Reporting-System. Depending onthe nature of aCompany, there may
be certainother exclusive, supplementary areas, where Training may also
be needed.
After setting the objectives, the Manager has to think about the
following points:
(i) What shouldbe taught?
(ii) Where shouldit be taught?
(iii) Shouldwho teachit?
(iv) How shouldit be taught? and
(v) What time shouldit be taught at?
In the reply of the first question, i.e., what (i.e., contents of the
course), have been explained already. Regarding the second question of
place, normally there are three alternatives: the companys, factory and
Office, the fields and courses runby outside organisations, e.g., NICEM,
etc. Usually, the best locationfor training inbasics: policies procedures
and processes, knowledge is the place where this type of work is being
actually carried out, e.g. Companys Head Office. Moreover, the basics of
theoretical-training maybe discussed the staff training roomis the best
location. To impart the basic knowledge, the trainees should be assigned
to asenior sales executive. It will be here that the trainee will be able to
appreciate the application of the required kills. And, training may be
integrated with demonstrations and real-life experience in in-plant-
training.
In the response to the question By Whom, it simply means that
the training should be imparted by different senior sales-executives, who
are specialists intheir ownareas. Of course, the overall respol1sibility is
that of the salesmanager/training manager. By delegating the authority,
the sales manager does not wash-off his hands; he just shares his
burden, but retains overall control. Some big companies have their own
training department and human resource development departments. It
pre-supposes enough number of trainees, to justify specialized staff.
Sometimes, companies also have consultants. But this approachhas the
disadvantage of total lack of their knowledge of companysobjectivesand
needs. External courses are also mostly general in nature. However, a
judicial mix of all the three alternatives, so asto serve best the companys
needsisadvised.
The reply of fourthquestiondependsupon, who isteaching? Every
individual has his ownand unique way of teaching/explaining. However,
some basic guidelines may be laid down to serve as instructions of the
training-personnel. Similarly, the last question is at What Time? It is
difficult to precisely lay downthe specific durationof training. Usually, it
may be between 6-8 weeks in mediumto large companies. In between
sessions, there should be adequate breaks. If required, the programme
cango well into the evenings. However, every instructor should avoid too
muchof lectures and rather should concentrate onparticipative-activity,
so that interest inthe course is maintained. Another teaching-approach,
suitable to all companies of any size is meet the manbehind you. Here,
each head of the department talks with the trainees. In doing so, he
makes direct contact and he befriends them. He tries to self his
department to the trainees. During this type of a lecture, the following
points are may be covered: (i) His job-what he does? (ii) Goals-what his
department does presently? (iii) Innovations- what is scheduled for
future? (iv) Needs-what isneededfor hismore effective working? (v) Help-
how salesmen can help in effective working? To sum-up, the initial
training-programme ends with the achievement of basic-objectives laid
down for it. By this time the trainee is expected to have acquired basic
grounding in(i) product-knowledge, (ii) the company and (iii) the desired
level of skills in sales-techniques, and maybe considered to be fit to be
exposed to actual field conditions, i.e., then starts the on-the-job
training. It is here, that he applies the principles enunciated during his
training. It is absolutely necessary that the supervisor looks after each
new entrant; and ensures their proper seasoning. Sometimes, a new
entrant is assigned to an experienced senior salesman, for a couple of
weeks, so that he gets practical training; before-assuming charge of his
independent territory. It is sometimes said, if the trainee has not learnt,
the trainer has not taught. Infact, it is true; because, as we know that
after a series of tests, analysis etc.; a person of below average qualities
cannot get selected for the job. So, unless the training-methods are
devised and planned well inadvance, it would result ina huge waste of
valuable resources of the company. A good training schedule may be
prepared on the basis of ACMEE principle, where A = Aim of the
Training; C = Content of the Training; M = Methodof the Training; E =
Execution of the training-programme, and E = Evaluation. A Training-
Programme should be executed scientifically, and a post-evaluation
shouldbe made after eachkindof Training.
It is vital that training needs be identified by management before any
training is done. Two main factors to be considered are the initial sakles
training programs and the continuing sales training programs. During the
identification of initial training needs, there is need for ana analysis of three
main factors which include, job specifications, trainees background and
experience, sales related marketing policies.
SALESFORCE DEVELOPMENT
It is assumed that the newly trained salesmen charge of his
territory after initial-training freely. But, the sales manager must ensure
the ways for their continuous development. The standards of
performance that the salespeople have learnt during their training must
be properly channelized. It has beennoticed that eventhe seniors, with
good performance-records, need assistance, to give continued good
performance. And it must be remembered that the development is a
continuous process and is the key to make the sales-force really more
and more productive/efficient. Development-processcould be carried out
intwo ways:
(1) Field, i.e., on-the-jobtraining, where sales-executive develops
each individual new-entrant salesman, under his charge,
during hisday-to-day working, and
(2) Through sales-meetings, refresher courses and development
programmes, at the office.
Field- training aims at rendering continuous help to the salesman,
to get over his initial difficulties; and perform better on an on-going-
basis. For this, the sales-executive in-charge hasto follow the points:
(i) Compares his charges field-performance regularly,
(compared withthe set standards) and reasons for variances
are established.
(ii) Weak areas are also identified, and the salesman is
educated, on how to overcome them. The new-entrant
salesmanisencouraged to incorporate offeredsuggestionsin
hiswork.
(iii) The weak areas observed by the sales-executive in-charge,
should be tabulated on corporate basis. This will reveal
general weaknesses of initial training, and would help set
objectives of the refresher course for the future. It will also
helpinimproving the quality of training for future batches.
METHODS OF IMPROVING SALES-FORCE PRODUCTIVITY
Inthe ensuing lines, it is tried to explore afew important areas, in
whichMarketing- . OrientedCompaniescanhelptheir sales- force, to act
andperforminamore productive manner.
(1) Identifyingthe PerfectCustomer
Every time the company must do the task of personal sellings
sales-force. The salesman haste call on prospects and tries to convert
them into customers. One of the drawbacks of asking salespeople to
carryout a number of calls-per-period is the danger that one tends to
concentrate onthe number, rather thanonthe quality of calls. However,
it is more sensible, to target ones effort on a smaller number of better
calls. At this point, they can plan their day in a more effective way, by
allowing more of their time and effort upon A=Excellent or B=Good
Customers; some time on the C=Fair and none on the D=Poor. That
would mean that the Call-rate can be better targeted on promising-
prospects, and little time is wasted on contacts, whichare less likely to
yield results i.e. sales. The preparation 0fahit-list designating levels of
attractiveness to potential-customers, can thus, be a powerful tool to
spur productivity, inthe selling-effort. Inthe case of industrial goods, one
can use the standard industrial classifications (sics), as the basis for
categorisation of customers. This is particularly valuable, if market
research has established which group/class, in the classification, offers
promising-pickings. However, the company may adopt its own basis to
suit its unique aims/objectives and needs. However, some type of
selectivity is essential to run the sales- force, as a tight and effective
force. No two bases need be the same. But bear in mind not to target
those customers, whomyoure competitors are ina far better positionof
penetrating. As a guide/salesperson, for this basis of categories, the
following pointsmust be considered:
(i) Size of the firmand/or itsconsumption-level (sales-volume).
(ii) Segmentsthat serve potential-customers.
(iii) The nature of firms products, techniques and production-
processes.
(iv) The personality of buying-decision-makers and/or their
motivational stimuli (e.g., willing to purchase from .large
firmsor fromsmall firmsonly).
(v) The geographical locationof the customers.
Understandingthe CustomersDecision-MakingUnit
(DMU)
Generally, sales-persondeals witha number of customers. Inthis
process of selling; the main participants are deciders, buyers,
influencers, users, and gatekeepers etc. Eachone of these has a role to
play, sometimessupportive andsometimesbecome barrier. A good sales-
person must understand the way this unit, as a whole, functions, and
the respective roles of each member, thereof. The situation gets further
complicated inthe case of large firms, where there are many membersin
this decision-making unit (DMU). Each one of them is to be
communicated, in one form or the other. However, it is impractical,
inefficient andoftenpositively imprudent, for the sales-personsto contact
themall. It is suggested that he may contact, the less important or less
accessible members of this unit, through companys literature, direct-
mailing, exhibitionsetc. However, it must be ensuredthat:
(i) Every member of the DMU receives the right amount of
informationneither too much, nor too little.
(ii) He has to concentrate on the most important and decisive
membersof thisDMU of the buyer (customer).
(iii) The sales manager may prepare a record about ever] one of
more promising customers, which should include: annual reports and
published accounts; a scrap-book of published material about the firm;
companys literature and product-specifications; organisational details; a
who-is-who of the personnel inthe company; andideally, acomparison
of the firms performance, withthat of its competitors. If this database is
complete and up-to-date, the sales-person would be addressing a
customer about whomhis or her knowledge-level is so high, that a true
relationshipcaneasily be forged.
(iv) The sales manager may also prepare a comprehensive list of
DMUs members, together withthe other sub-departments of marketing,
designing and integrated communication programme etc. Whatever
selling-technique the sales-person adopts, the aimshould be, to target
each member of the DMU, in the most productive and cost-beneficial
way, especially those upon whom they can have maximum impact. In
case the sales-department has a fairly small number of large potential
(key) accounts, we can also prepare an integrated communication
programme with DMU-members of these Companies. It is rather
surprising to note that a large number of firms do not bother to collect
the most elementary information about the client-company, even where
the total catchments market consists of only not more than a couple of
dozencompanies.
(3) Learning fromthe Star Performers
Sales-Force is a heterogenic lot of numerous personalities. That
makes it rather impossible to achieve total homogeneity of behaviour;
attitude; andperformances. There are the high-flyersat one extreme, and
sloggers at the other; the former are enthusiastic, creative and effective;
1he latter may work hard, but results do not come easily to them.
However, by analysing the level of performance of individual sales-people,
one caneasily designate, the toptenpercent asthe stars; the next twenty
percent as good; the next thirty as adequate; and the remaining forty
percent are treated as problemchildren. Once the sales-force has been
categorised into clearly defined Groups, based on their performance
quality, one canaskasimple question:
What does the Star do, which is so very different from that of
others? If one could identify, in some detail, how the Star behaves, in
front of a Customer, the way he (or she) communicates the message,
plans and manages time, uses Sales-Aids etc., one would know how to
develop new training-methods, for the rest of the force. Thus, aninsight
would be gained, into the Selling and Buying-Environment, and this
should help in discovering areas, in which Productivity could be
improved.
(4) Sales-Meetings(Conferences)
Thisisanother, important avenue for the development of the sales-
force. The objectives of such sales-meetings are: (i) training and
development of individuals; (ii) to inform and get the feedback-
information; (iii) to stimulate and motivate, and (iv) to provide acommon
platform for exchange of experience. A sales meeting to be successful,
shouldhave the following in-built ingredients:
(a) Location: It should be held at a place, where any additional
information, can be easily made available. Companys Headquarters;
Head Office of the Sales Manager; or that of the Regional Manager, are
ideally suitable. Adequate arrangement shouldbe made for the seating of
the participants, and proper and business-like atmosphere should be
created.
(b) Audience: The level of intelligence of participants should be
considered. This will help in selecting and assigning the subjects for
discussion, to suitable hands.
(c) Agenda: A proper Agendashould be framed, keeping inview
the needs, for which the Meeting is being held. The agenda should be
made knownto the participantsinadvance.
(d) Periodicity: The sales meeting should have a definite
periodicity. National-level sales-meetings/conferences, are usually an
annual affair. Thisensuresthat the participantsare well prepared.
(e) Activities: There shouldbe proper allocationof work, so that
eachparticipant knowswhat to expect fromwhom. The Convener should
do well to ensure a participative atmosphere in the Meeting. A little
Creativity, on his part, will go a long way, in ensuring success of the
meeting.
(5) Kerb-Side Conferences
These conferencesaimat arandomappraisal of the performance of
asales-man, andisusually done onamonthly basis, taking adayswork
into consideration. It should be ensured that (i) the salesman is not
calling onhisfriendly customersonthat day, and (ii) the presence of the
appraiser, does not influence the sales-persons work-pattern. The
appraiser has to watchthe salesman, during the day and keep a mental
note of his strong and weak areas. After the call(s) is/are over the day,
the appraiser andthe salesmandeferredto aquiet place, where the work
is systematically appraised; and properly recorded and graded, on an
appraisal-form. It is essential that the agreement of the salesman be
obtained to suchanappraisal-form. This will put himina proper frame
of mind, andhe will be receptive to suggestions.
The sequence of this appraisal, could be like this: (i) the appraiser
appreciates the skills that have beenemployed; (ii) the salesmanis now
asked to analyse the call(s), identify the problems not properly tackled,
and reasons thereof; (iii) if the salesmanfails to identify his weak areas,
evenafter questioning, the appraiser tells himabout these, invery clear
terms; (iv) once the deficiencies have been isolated, salesmans
concurrence, onhis weaknessesis obtained; (v) the appraiser, thengives
instructions, onhow to overcome these weaknesses. The salesman, may
insome cases be asked to rehearse these, to reduce the element of any
doubt; (vi) any follow-upactionisthenspecifically pointedout; (vii) before
parting, the appraiser saysafew words of encouragement and concludes
onanote of optimism.
Such kerb-side meetings are very useful for the purpose of
increasing the productivity of employees, but heavily depend on the
ability and skills of the appraiser, to pinpoint deficiencies and offer
remedial measures. However, generalities should be avoided, as the
processisvery expensive.
(6) Refresher Courses
Generally, the refresher courses are held at the companys
headquarters, usually once a year. The course-content is usually based
on the feedback-information from (i) companys activities; (ii) sales-
executives; (iii) market-intelligence; (iv) sales-meetings/conferences etc.,
(v) product-development, (vi) technical areas affecting the company etc.
(since the last conference/meeting). Such courses make the sales-force
adequately prepared, periodically, to face the challenges of competition,
withconfidence.
(7) SalesBulletins
Lastly but not least, training and development is also continued
through sales bulletins. It is a good medium to keep the salesman
educatedabout day-to-day mattersof changes/interests. The information
reacheshimthroughthe bulletins, while the salespeople are at work, and
also whenit is urgently required. No time is lost inwaiting for the next
sales-meeting/conference. However, the language used in he bulletins
should be crisp and to the point, so as to arouse the salesmans interest
andiseasily understoodby the recipient.
COMPENSATION AND MOTIVATION OF
SALES PERSONNEL
INTRODUCTION
Successful sales managers have three primary concerns in
managing the sales force- attracting outstanding salespeople, motivating
themto workbotheffectively andefficiently, andholding onto goodsales
people. Among the most important tools for accomplishing these three
objectivesisthe organization scompensationplan. The salesforce of any
company needs to be compensated adequately to keep its morale high
and to enable it to contribute to its maximum. A sales force is the
representative of the company s philosophy and business principles. The
building and maintenance of sales force is possible through proper
compensationplan.
Motivation is derived from the Latin term movere meaning to
move . Motivation stimulates the movement of an individual. It can be
defined as a dynamic process set in motion by creating or arousing
internal needs that activate goal-directed efforts and determine their
intensity and persistence. In simple words motivation is goal-directed
behaviour, underlying whichare certainneeds or desires. It is generally
regarded as the process of getting people to work towards the
achievement of an objective. Sales force cannot be controlled,
administeredinthe way factory workerscanbe monitored. The salesforce
is required to be self starters, highly ambitions, result oriented and go-
getters. Thus, the salesforce has to be kept highly motivated and
committed.
REQUIREMENTS OF A GOOD SALES COMPENSATION
PLAN
A goodsalescompensationplanmeetssevenrequirements. First, it
provides a living wage, preferably in the form of a secure income.
Individuals worried about money matters do not concentrate on doing
their jobs well. Second, the plan fits with the rest of the motivational
program-it does not conflict withother motivational factors, suchas the
intangible feeling of belonging to the sales team. Third, the planis fair-it
doesnot penalize salespersonnel because of factorsbeyondtheir control-
within the limits of seniority and other special circumstances, sales
personnel receive equal pay for equal performance. Fourth, it is easy for
sales personnel to understand- they are able to calculate their own
earnings. Fifth, the plan adjusts pay to changes in performance. Sixth,
the planiseconomical to administer. Seventh, the planhelpsinattaining
the objectivesof the salesorganization.
DEVISING A SALES COMPENSATION PLAN
Whether contemplating major or minor changes or drafting a
completely new sales compensationplan, the sales executive approaches
the project systematically. Good compensation plans are built on solid
foundations. A systematic approach assures that no essential step is
overlooked.
The first step is to re-examine the nature of the sales job. Up-to-
date writtenjob descriptions are the logical place to start. Other aspects
of company operations are considered in relation to their impact upon
the sales job. Sales department objectivesare analyzed for their effect on
the salesperson s job. The impact of sales-related marketing policies is
determined. Distributionpolicies, credit policies, price policies, andother
policies affect the salesperson s job. Current and proposed advertising
and sales promotional programs assist in clarifying the nature of the
salesperson sgoals, duties, andactivities.
Most large companies, and many smaller ones, use job evaluation
systemto determine the relative value of individual jobs. Job evaluation
procedure isnot scientific; it isanorderly approachbasedonjudgement.
It focuses on the jobs, without considering the ability or personality of
individualswho do the work. Itspurpose isto arrive at fair compensation
relationshipsamong jobs.
Traditionally, sales executives have opposed using formal job
evaluations to determine the compensation levels of sales personnel.
They contend that compensation levels for sales personnel are more
closely related to external supply-and-demand factors thanto conditions
inside the company.
Because compensation levels for sales personnel are related to
external supply-and-demand factors, it is important to consider
prevailing compensation patterns in the community and industry.
Management needs answers to four questions- (1) What compensation
systemsare being used? (2) What isthe average compensationfor similar
positions? (3) How are other companies doing with their plans? and (4)
What are the pros and cons of departing from industry or community
patterns?
A programme for setting compensationof sales personnel is sound
only if it considers the relation of external compensation practices to
those of the company. Effective sales executives maintain constant
vigilance against the possibility that the pay of sales personnel will get
out of line withthat paidfor similar jobsinthe community or industry.
Management must determine the amount of compensation
salespersonshouldreceive. Althoughthe compensationlevel might be set
through individual bargaining, or on an arbitrary judgement basis,
neither expedient is recommended. Management should ascertain
whether the caliber of the present sales force measures up to what the
company wouldlike to have. Management weightsthe worthof individual
persons through estimating the sales and profit that would be lost if
particular salespeople resigned. Another consideration is the
compensationamount the company canaffordto pay.
A salescompensationplanhasasmany asfour basic elements: (1)
a fixed element, either a salary or a drawing account, to provide some
stability of income; (2) a variable element (for example, a commission,
bonus, or profit-sharing arrangement), to serve as an incentive; (3) an
element covering the fringe or plus factor, such as paid vacations,
sickness and accident benefits, life insurance, pensions, and the like;
and (4) anelement providing for reimbursement of expenses or payment
of expense allowances. Not every company includes all four elements.
Management selectsthe combinationof elementsthat best fitsthe selling
situation.
Management should consult the present sales personnel.
Management should encourage sales personnel to articulate their likes
and dislikes about the current plan and to suggest changes in it.
Criticisms and suggestions are appraised relative to the plan or plans
under consideration.
For clarificationand to eliminate inconsistencies the tentative plan
is put in writing. Then it is pre-tested. The amount of testing required
depends uponhow muchthe new plan differs fromthe one in use. The
greater the difference, the more thorough is the testing. Pretests of
compensation plans are almost always mathematical and usually
computerized.
The planisthenrevisedto eliminate trouble spotsor deficiencies. If
alternationsare extensive, the revised plangoes throughfurther pretests
andperhapsanother pilot test.
At the time the new plan is implemented, it is explained to sales
personnel. Management should convince them of its basic fairness and
logic. The sales personnel are made to understand what management
hopes to accomplish through the new plan and how this is to be done.
Details of changes from the old plan, and their significance require
explanation. Provisions for follow-up are made. Fromperiodic checkups,
needfor further adjustment isdetected. Periodic checksprovide evidence
of the plan s accomplishments, and they uncover weaknesses needing
correction.
TYPES OF COMPENSATION PLANS
Straight-salary plan
This is the simplest compensation plan. The salespeople receive fixed sum
of money at regular intervals (usually every week or every month),
representing total payments for their services. Such plans are most common
among industrial goodscompaniesthan among consumer goods companies.
The advantage of using straight-salary plan is that it provides strong
financial control over sales personnel and management can direct their
activities along the most productive lines. The main attraction of the
straight-line plan to sales personnel is that stability of income provides
freedom from financial uncertainties inherent in other plans. The
disadvantage of using this method is the fact that there is no direct
monetary incentive and therefore many sales people do only average rather
than an outstanding job.
Straight-Commission plan
This is whereby the individual sales person is paid according to their
productivity. Here, the sales volume is believed to be the best productivity
measure, which is a questionable assumption. Straight commission plan has
two broad classifications which include:-
Straight commission with sales personnel paying their own expenses, whereby advances
may or may not be made against earned commissions.
Straight commission with the company paying expenses, with or without advances
against earned commissions.
The straight commission has several advantages which include, the fact that it provides
maximum direct monetary incentive for the sales person to strive for high-level volume, the star
salesperson is paidmore than he or she would be under most salary plans and low producers are
not likely to be overcompensated. Straight commission plan is also characterized by great
flexibility by revising commission rates applying to different products. However the straight
commission weakness is that it provides little financial control over sales peoples activities. The
sales people re also careless about transmitting their reports and also neglect follow up leads,
they resist reduction of the size of the sales territories, and consider individual accounts privately
owned.
Combination of Salary and incentive Plan (salaryplus Commission)
Most of the sales compensation plans are combinations of salary and commission. Most
developed as attempts to capture the advantages and offset the disadvantages of both the salary
and commission systems. The combination has benefits which include, sales personnel having
both the security of stable incomes and the stimulus of direct financial incentive. The
management has both financial control over sales activities and the apparatus to motivate sales
efforts. The combination also has disadvantages which include; clerical costs are higher than for
either salary or a commission system.
Use of Bonuses
Bonuses are different from Commissions a bonus is an amount paid for accomplishing a
specific sales task. A commission varies in amount with sales volume or other commission base.
Bonuses are paid for reaching a sales quota, performing promotional activities, obtaining new
accounts, following up leads, setting up displays or carrying out other assigned tasks. The bonus
in other words is an additional financial reward to the salesperson for achieving results beyond a
pre -determinedminimum. Bonuses never appear alone, they always appear with one of the main
sales compensation methods.
Fringe Benefits
Like monetary compensation, they are not motivating factors. In the Maslow hierarchy fringe
benefits contribute to fulfillment of safety and security needs although others contribute to the
fulfillment of esteem and other higher-order needs. Fringe benefits are given to all employees
and do not vary with job performance but they prevent job dissatisfaction.
TYPES OF COMPENSATION
Direct: The direct compensationpackage for asalesmanismore or
less the same inall companies. However, a company employing technical
personas salesmanfor selling, say, industrial or electronic products may
offer a high basic salary. Sometimes, when the product is in the
introductory stage the functionof the salesmanis to create new markets
and make customersunderstand how to use the product as in the case of
a new consumer durable product like vacuumcleanersof anew electronics
productsusedby certain industries; the basic salary of the salesman may
be on the higher side. The direct compensation package of a salesperson
thusconsists of the basic pay plus allowances covering all travel and
entertainment expenses etc. Incase, the salesmanhas to stay overnight
his boarding and lodging allowances are also provided for. The basic
salary and other allowances are revised from time to time. They also
increase withpromotionof the salesman.
Indirect: It consistsof financial aswell asnon-financial incentives.
Financial incentives
(i) Salaryplus commissiononsales above a certainamount-
Herein, the salesman receives direct salary and a
commission in addition to it. Every salesman is assigned a
fixed quota. The commission is awarded on achievement of
the targeted quota. A fixed percentage of sales achieved over
and above the target is also set. This type of compensation
scheme ensures a direct salary as well as an in-built
motivationsystemthroughincentives.
(ii) Salary plus share in profits- This is not a very prevalent
method. It is generally suggested for a company selling high
value items with high profit margins. The incentive here is
based on profits earned. The selling expenses to sell a
product may also be large and this is incorporated in the
profit sharing scheme asit actsasacontrol mechanism. Also
salespeople working to obtaincontracts are generally givena
share inprofitsrather thanawardedondirect sales.
Non-financial incentives
(a) Training programme- Most companies offer training
programmes for their salesmen. On an average a salesman
has to undergo a training course every one or two years.
These programmes enable interaction between salesmen of
different territories as well as provide them with latest
developments in the field. These training programmes are
viewedasanindirect benefit by the salesmen.
(b) Awards, recognitions and prizes- In addition to training
programmes the award ceremonies for outstanding
achievements in sales are held in exotic locations like hill
stations or five-star hotels. The awards are presented
through foreign dignitaries or important people in the field,
thus providing the salesman with the much needed
recognition.
FACTORS INFLUENCING COMPENSATION
Although the basic structure of a compensation plan may be
similar across the companies, some factors do predominantly shape the
structure of the company scompensationplan.
The relationwithproductlife cycle
The amount of selling effort is directly related with the stage at
which a product is in its life cycle. The compensation structure is a
function of selling effort. When the product is in the introductory stage
the company needsadynamic salesforce whichcanestablishthe product
in the desired market. The salesforce must be enterprising, willing to
travel, take criticismeasily, have a good knowledge of the product, have
good communication skills and last but not the least, have tremendous
stamina to work. To keep such a salesforce motivated, adequate
compensationisthe basic need.
In the growth stage, the motivation of the salesforce has to be
sustained to exploit all the opportunities available in the market. They
have to approachthe market withrenewed vigour. At this point indirect
compensationschemeswhichare incentive linkedplay animportant role.
Whenthe product has firmly established itself, the salesforce also needs
a break from the monotony. Other indirect benefits like training
programmes in good environmental locations; foreign trips for training
and understanding markets; promotions to much responsible positions
are the requirementsat thisstage.
When the product is in the decline stage some fresh incentive
schemes may be introduced in the compensation scheme to generate
fresh interest in the product. The number of people involved with the
product hasalso to increase marginally.
Compensationrelatedwithdemographic characteristic
The compensation package preferred by the salespeople depends
upontheir demographic characteristics also. Their age and size of family
or number of dependents play animportant part inthe preference for a
basic salary and/or incentives. However, this cannot be generalized and
dependslargely onthe individual.
Role of selling in marketing strategy of the company, and
competitor s practices are other important factors influencing
compensation.
DIMENSIONS OF SALES MOTIVATION
Motivational effort is generally thought to include three
dimensions- intensity, persistence, and choice. Intensity refers to the
amount of effort the salesperson expends on a given task; persistence
refers to how long the salesperson will continue to put forth effort; and
choice refers to the salesperson s choice of specific actions to accomplish
job-related tasks. For example, a salesperson may decide to focus on a
particular customer (choice). He may increase the number of calls he
makes on this customer (intensity) until he gets the first order
(persistence). The choice of aspecific actionmay affect the intensity and
persistence. Likewise, intensity and persistence may affect the choice of
specific actions.
The sales job consists of a large variety of complex and diverse
tasks. Because of this, it is important that the sales person s efforts be
channeled in a direction consistent with the company s strategic plan.
Therefore, the directionof the salesperson s effort is as important as the
intensity andpersistence of that effort.
IMPORTANCE OF MOTIVATION
The nature of the sales job, the individuality of salespeople, the
diversity of company goals, and the continuing changes in the
marketplace make motivating sales persons a particularly difficult and
important task.
Unique nature of the sales job- Salespeople experience a
wonderful sense of exhilaration when they make a sale. But they must
also frequently deal withthe frustrationand rejectionof not making the
sale. Evenvery good sales person does not make every sale. Also, while
many customers are gracious, courteous, and thoughtful in their
dealings with salespeople, some are rude, demanding, and even
threatening.
Salespeople spend alarge amount of time by themselves calling on
customersand travelling betweenaccounts. Thismeans that most of the
time they are away fromany kind of support fromtheir peers or leaders,
and they often feel isolated and detached from their companies.
Consequently, they usually require more motivation than is needed for
other jobsto reachthe performance level management desires.
Individualityof salespeople- Salespeople have their ownpersonal
goals, problems, strengths, and weaknesses. Each sales person may
respond differently to a given motivating force. Ideally, the company
should develop a separate motivational package for each sales person;
but a totally tailor-made approach poses major practical problems. In
reality, management must develop a motivational mix that appeals to a
whole groupbut also hasthe flexibility to appeal to the varying individual
needs.
A related point is that the sales people themselves may not know
why they react as they do to agivenmotivator, or they may be unwilling
to admit what these reasonsare. For example, asalespersonmay engage
in a certain selling task because it satisfies his ego, rather than admit
this, however, he will say that he is motivated by a desire to serve his
customers.
Diversityincompanygoals- A company usually hasmany diverse
sales goals, and these goals may evenconflict witheachother. One goal
may be to correct animbalanced inventory and another may be to have
the sales force to missionary selling to strengthen long-term customer
relations. These two goals conflict somewhat and require different
motivating forces. With diverse goals such as these, developing an
effective combinationof motivatorsisdifficult.
Changes in market environment- Changes in the market
environment can make it difficult for management to develop the right
mix of sales force motivational methods. What motivates sales people
today may not work next month because of changes in market
conditions. Conversely, sales executives can face motivational problems
whenmarket conditions remainstable for anextended period of time. In
thissituation, the same motivatorsmay lose their effectiveness.
MOTIVATION THEORIES
Researchers in the behavioral sciences have shown that all
human activity is directed toward satisfying certain needs and reaching
certain goals. How sales-people behave on the job is directly related to
their individual needs and goals. Thus, some individuals will behave
differently and will be more successful because of different motivational
patterns. Many people feel that individual motivationis dependent upon
whether or not salespersons find something inthe job that is personally
motivating for them. Therefore, the job of the sales manager must be
redefined, with greater emphasis placed upon understanding and
accepting the idea of how motivation works. The sales manager is
responsible not only for motivating the sales force per se but also for
counseling each salesperson individually to find the source of that
person sself-motivation.
MaslowsNeedTheory
Maslow s well-knowntheory contends that people are motivated by
a hierarchy of psychological growth needs. Relative gratification of the
needs at one level activates the next-higher order of needs. The
hierarchy-of-needs theory implies that salespeople come to their jobs
already motivated and that they only need the opportunity to respond to
the challenges of higher-order needs. The following Exhibit presents the
order of priority of the needs individuals seek to fulfill and the needs
salesmanagersmust consider.
EXHIBIT: HIERARCHY OF HUMAN NEEDSANDTHEIR IMPLICATIONS
FOR SALESMANAGERS
MaslowsHierarchy
Self-actualizationneeds
SalespersonsNeeds
Self-development
Creativity
Self-fulfillment
SalesManagersTask
Provide greater freedom,
self-development workshop
E
s
t
e
e
m
n
e
e
d
s
Social needs
Safety needs
Physiological needs
RecognitionStatus
Social interaction
Friendship
Acceptance among peers
andsuperiors
Freedomfromworry about
security of jobs, incomes,
medical expenses, etc.
Food, shelter, overall
health, etc.
Provide greater job
responsibilities, promotion
opportunities, public
recognitionfor
achievements
Maintainclose
relationshipswithsales
force
Salesmeetings
Newsletters, memoranda,
etc.
Provide abalancedpackage
of fringe benefits
Be aware of general health
andliving conditionsof
salesforce
Sales managers applying need theory should keep inmind its two
major premises:
The greater the deprivation of a given need, the greater its
importance andstrength.
Gratification of needs at one level in the hierarchy activates
needsat the next-higher level.
Sales managers must keep track of the level of needs most
important to each salesperson, fromthe beginning trainee to the senior
sales representative. Before salespeople become stagnated at one level,
they must be given opportunities to activate and satisfy higher-level
needs if they are to be successfully motivated toward superior
performances. Since various salespeople are at different need levels at
any one time, sales managers have to retain their sensitivity to the
evolving needs of individual sales personthroughclose personal contact
witheachmember of the salesforce.
Motivator-Hygiene Theory: Herzberg s classic research studies
found two types of factors associated with the satisfaction or
dissatisfactionof employees. Sourcesof satisfactionare calledmotivators
because they are necessary to stimulate individuals to superior efforts.
They relate to the nature or content of the job itself and include
responsibility, achievement, recognition, and opportunities for growth
and advancement. Sources of dissatisfaction are called hygiene factors
because they are necessary to keepemployee performance fromdropping
or becoming unhealthy. They comprise the environment, include salary,
company policies and administration, supervision, and working
conditions.
According to Herzberg s theories, to improve productivity, sales
managers must maintain hygiene factors (pleasant work environment)
while providing motivators (job enrichment) for the sales force. Here are
some examplesof jobenrichment:
Give salespeople a complete natural unit of workresponsibilityand
accountability (e.g. specific customer category assignments in a
designatedarea).
Grant greater authority and job freedom to the salespeople in
accomplishing assignments (e.g., let salespeople schedule their time in
their ownunique way aslong asorganizational goalsare met).
Introduce salespeople to new and more difficult tasks and to
challenges not previously handled (e.g., opening new accounts, selling a
new product category, or being assignedalarge national account).
Assign salespeople specific or specialized tasks enabling them to
becomeexperts(e.g., training new salespeople onhow to close asale).
Send periodic reports and communications directly to the
salesperson instead of forwarding everything viathe sales supervisor. (Of
course, the supervisor must be informed about what information the
salespeople are receiving).
Achievement Theory: Researchby McClelland and his associates
confirmed that some people have higher achievement needs thanothers;
they labeled such persons achievement oriented. Children who are
givengreater responsibilitiesandtrustedfromyouthto do thingsontheir
own are more likely to have achievement-oriented profiles. Achievement-
oriented people readily accept individual responsibility, seek challenging
tasks, andare willing to take risksdoing asksthat may serve asstepping
stones to future rewards. These individuals receive more satisfaction
fromaccomplishing goalsandmore frustrationfromfailure or unfinished
tasks than the average person. Any achievement-related step on the
success path may include rewards (positive incentives) or threats
(negative incentives). A path is contingent if the individual feels that
immediate success is required in order to have the opportunity to
continue toward further successes and that immediate failure causes
loss of the opportunity to continue onthe path. If immediate success or
failure has no effect on the opportunity to continue on the path toward
future successor failure, the pathisnoncontingent.
Sales managers need to identify the achievement-motivated
salespeople and then give them personal responsibility for solving
definable problemsor achieving certaingoals. Frequent, specific feedback
is also essential so that these sales-people can know whether they are
successful or not. Managers may have to temper negative feedback
because achievement-motivated people may resign if they feel that they
are going to be unsuccessful. Finally, competition among such
salespeople can become cut-throat and damaging to the organization
unlesscarefully monitoredandcontrolled.
Contrasted with these achievement-oriented individuals, affiliative
people are not ascompetitive nor are they asanxiousabout uncompleted
tasks; they require only general feedback regarding goal achievement.
Affiliative typeslike to workingroupsandwant to be acceptedby others.
They are lessself-centered, usually helpbindthe grouptogether, andare
lessable to tolerate traveling jobsinvolving long periodsof solitude.
Although salespeople generally exhibit traits of both task
achievement and group affiliation, it is up to the sales manager to learn
the dominant needs of individual salespeople in order to devise specific
strategiesfor motivating them.
Inequity theory: According to the inequity theory of motivation,
people compare their relative work contributions and rewards withthose
of other individuals insimilar situations. As positive-thinking minister
andauthor Robert Schuller says: Many people hear throughtheir peers,
not their ears. Inequity is experienced when a person feels either
under rewarded or over rewarded for his or her contribution relative to
that of others. The stronger the feeling of inequity, the stronger the drive
to reduce tension. Althoughindividuals may respond in unique ways to
inequity, most people who feel underpaid or under rewarded, relative to
others making similar contributions, tend to decrease their work efforts:
people who feel overpaid tend to increase their efforts. People may also
reduce their inequity tensions by distorting their perceptions of their
rewards and contributions versus those of others. Finally, individuals
may leave a perceived inequitable situation by quitting the job or
changing the comparisongroup.
According to inequity theory, it is important that sales managers
learn how individual sales representatives feel about the equity of their
contributions and rewards compared with those of others. If inequity is
perceived by some of the salespeople, the salesmanager needs to correct
the situation if inequity really does exist or help the salespeople reduce
tensions by altering their perceptions of the comparisongroup s relative
contributionsandrewards.
Role clarity: Donnelly and Ivancevich contend that one of the
most important needsof salespeople isrole clarity, or aconcept of exactly
what their job entails. Because salespeople often lack sufficient job
knowledge, must deal across departmental boundaries, and are
challenged by complex problems requiring innovative solutions, precisely
defined goals and clear role expectations canbe motivational. Empirical
research with salespeople correlates increased role clarity with greater
jobinterest, more opportunity for jobinnovation, lessworktension, more
job satisfaction, and a lower propensity to leave. Salespeople usually
want andneedmore informationabout what isexpectedof themandhow
they will be evaluated.
Clearly written job descriptions and management-by-objectives
(MBO) conferences that set precise goals (mutually agreed upon by the
salespersonand sales manager) canhave important motivational effects
and stimulate job satisfaction. Clarifying the role expectations for
salespeople by individualizing achievement plants and providing a
continuous flow of helpful informationwill consume significant amounts
of sales management time. But this seems to be one of the least
complicated, least expensive, and surest ways of obtaining higher sales
force productivity.
MOTIVATIONAL TOOLS
The simple motivational tools of early years suchas only financial
benefits prove to be a poor method of motivation beyond physiological
and safety needs satisfaction on account of the unique aspects of a
salesperson s job. The non-financial incentives, become an important
component of motivation. Some of the factors that make a special mark
onsalesforce motivationare discussedbelow.
1. Meetingbetweenmanager and salesforce- These are highly
regarded by sales managers in the motivation of their sales
teams. This provides opportunity to managers to meet their
salesforce in the field, at head office and at the sales
meetings/conventions. This provides a number of
opportunitiesfor improving motivation. These meetingsallow
the sales manager to understand the personality, needs and
problemsof eachsalesperson.
2. Clarity of job- Clarity of job and what is expected fromthe
salesperson is a great motivator. The objectives when duly
quantified and well defined, properly connected and linked
with the reward and recognition serve as source of
motivationto the salesperson.
3. Sales targets or quotas- If a sales target or quota is to be
effective inmotivating a salesperson, it must be regarded as
fair and attainable and yet offer achallenge to him. Because
the salespersonshould regard the quotaas fair, it is usually
sensible to allow him to participate in the setting of the
quota.
4. Sales contest- The sales contest is an important tool to
motivate salesperson. The purpose of the salescontest varies
widely. It may encourage ahigher level of salesingeneral, to
increase the sales of aslow-moving product or to reward the
generation of new customers. It provides an incentive to
show better performance and secure more satisfactory
results.
5. Sales conventions and conferences- These are the devices
of group motivation. They provide opportunities for
salesperson to participate, gain social satisfaction and
express their views on matters directly affecting their work.
They promote teamwork, dissolve social barriers, inspire and
raise salesperson s morale. Most of the companies in India
are now-a-days adopting this method to motivate their
salesforce.
6. Positive affect- The positive affect method is also an
important techniques for motivating the salesforce to their
best. The proper applicationof praise, positive feedback, and
human warmth and understanding can impel others to
perform up to their capabilities. This must be done in a
genuine way andnot be perceivedasovertly-self serving.
7. Leadership style of the manager- Leadership style of the
manager plays an important role in motivating the
salesperson. Inspirational leadership, which refers to
influence through referent power. Identification or
charismatic charm is an important tool in the motivational
strategy of the management.
8. Freedomto work- In order to perform the onerous duties
and responsibilities, the salesperson must be given a
reasonable amount of freedomand discretion in performing
their job. Discretion and freedom may be accomplished by
allowing salespersonto develop their owncall patterns, more
control over the types of promotional packages that are
offeredto their customersetc. Freedomor autonomy satisfies
the psychological needs and is like power pay (which is a
reward), making the jobof salespersonmore important inthe
organization.
9. Reward and recognition- Although sales quotas, sales
contests, conventions and conferences have positive carry
over effects, these are short lived techniques of motivating
salesmen. On the other hand reward and recognition on
salesperson accomplishments are more enduring and
relatively economic methods of motivation. Some of the ways
to extend recognition and honour to salesperson include
conferment upon the title of salesman of the month/year.
Congratulationtelegramsfrommembersof topmanagement,
sales trophies, offering membership of social clubs, mention
incompany newsletter, certificate etc.
10. Persuasion- One of the more common and recommended
forms of inducing high levels of motivation is through
persuasion. In this situation, managers use rational
arguments to convince salesperson that it is in their own
best interests to act in preferred way. Persuasion has the
advantage of getting people to conclude that their actions
were performedout of their ownfree will. Thisleadsto higher
levels of self direction than reward or coercive modes of
influence where one perceives he or she acts more as a
functionor external compulsionthaninternal volition.
1
PERSONAL SELLING
Setting Personal-Selling Objectives
Types of personal selling objectives
The qualitative personal selling objectives are long term and concern the
contributions management expects personal selling to make in achieving
long-term company objectives. These objectives generally are carried over
from one periods promotional program to the next. Depending upon
company objectives and the promotional mix, personal selling may be
assigned such qualitative objectives as:-
1. To do the entire selling job (as when there are no other elements in
the promotional mix).
2. To service existing accounts (that is, to maintain contacts with
present customers, take orders, and so forth).
3. To search out and obtain new customers.
4. To secure and maintain customers cooperation in stocking and
promoting the product line.
5. To keep customers informed on changes in the product line and other
aspects of marketing strategy.
6. To assist customers in selling the product line (as through
missionary selling ).
7. To provide technical advice and assistance to customers (as with
complicated products and where products are especially designed to
fit buyers specifications).
8. To assist with (or handle) the training of middlemens sales
personnel.
9. To provide advice and assistance to middlemen on management
problems.
2
10.To collect and report market information of interest and use to
company management.
The basic considerations in setting qualitative personal selling objectives
are decisions on sales policies and personal selling strategies and their role
in the total promotional program. After this role is defined, qualitative
long-term personal-selling objectives are set. In turn, the qualitative
personal selling objectives become the major determinants of the
qualitative personal-selling objectives.
The quantitative objectives assigned to personal selling are short term and
are adjusted from one promotional period to another. The sales volume
objective-the dollar or unit sales volume management sets as the target for
the promotional period-is the key quantitative objective. All other
quantitative personal-selling objectives derive from or are related to the
sales volume objective. Thus, discussion here focuses upon the setting of
sales volume objectives. Setting the sales volume objectives influences the
setting of other quantitative personal selling objectives, among them the
following:
1. To capture and retain a certain market share
2. To obtain sales volume in ways that contribute to profitability (for
example, by selling the optimum mix of company products)
3. To obtain some number of new accounts of given types
4. To keep personal-selling expenses within set limits
5. To secure targeted percentages of certain accounts business.
SOME IMPORTANT TERMS
Market potential
A market potential is an estimate of the maximum possible sales
opportunities present in a particular market segment and open to all sellers
3
of a good or service during a stated future period. Thus, an estimate of the
maximum number of low-priced pocket cameras that might be sold in San
Mateo County, California, during the calendar year 1987 by all sellers
competing for this market would represent the 1987 San Mateo County
market potential for low-priced pocket cameras. A market potential
indicates how much a particular product can be sold to a particular market
segment over some future period, assuming the application of appropriate
marketing periods.
Sales potential
A sales potential is the estimate of the maximum sales opportunities
present in a particular market segment open to a specified company selling
a good or service during a stated future period. To illustrate, an estimate of
the number of low-priced pocket cameras that might be sold in San Mateo
County, California, during the calendar year 1987 by the Eastman Kodak
company would be the 1987 San Mateo county sales potential for Eastman
Kodak low-price pocket cameras. A sales potential represents sales
opportunities available to a particular manufacturer, such as to Eastman
Kodak company, while a market potential indicates sales opportunities
available to an entire industry.
Sales forecast
A sales forecast is an estimate of sales, in dollars or physical units, in a
future period under a particular marketing program and an assumed set of
economic and other factors outside the unit for which the forecast is made.
A sales forecast may be for a single product or an entire product line. It
maybe for a manufacturers entire marketing area or for any subdivision of
it. Such forecasts are short-term, or operating, sales forecasts rather than
long-range sales forecasts, which are used for planning production capacity
and for long-run financial planning. Long-range sales forecasts, although of
4
interest, are so tentative that sales planners give them only passing
attention. It is the short-term or operating, sales forecast that is important
to the sales executive. Keep in mind then, that an operating sales forecast is
a prediction of how much of a companys particular product (or product
line) can be sold during a future period under a given marketing program
and an assumed set of outside factors.
ANALYSING MARKET POTENTIAL
Market identification
The first step in analyzing a products market potential is to identify its
market.
Market identification requires finding out
1. Who buys the product?
2. Who uses it?
3. Who are the prospective buyers and/or users
Some companies find answers to these questions in their internal records,
but most companies especially those that use long marketing channels
must use field research to obtain meaningful answers. In consumer-goods
marketing, buyers, users and prospects are identified and classified
according to such characteristics as age, sex, education, income, and social
class. In industrial-goods marketing, buyers, users and prospects are
identified and classified by size of firm, geographical location, type of
industry and the like.
Marketing identification studies reveal the characteristics that differentiate
the market segments making up the products market potential. Frequently
they undercover the unexploited market segment whose patronage might
be obtained through redirecting personal-selling effort or changing
5
promotional strategy. Sometimes, market identification studies provide, as
a side result, customer data on such factors as purchase frequency,
searching time expanded, unit of purchase, and seasonal buying habits.
When assembled and analyzed, these data help in estimating market
potential.
SALES POTENTIAL AND SALES FORECASTING
Sales potential as defined earlier, are quantitative estimates of the
maximum possible sales opportunities present in particular market
segments open to a specified company selling a good or service during a
stated future period. They are derived from market potentials after
analyses of historical market share relationships and adjustment for
changes in competitors selling strategies and practices.
A firms sales potential and its sales forecasts are not usually identical-in
most instances; the sales potential is larger than the sales forecast. There are
several reasons for this: some companies do not have sufficient production
capacity to capitalize on the full sales potential; other firms have not yet
developed distributive networks capable of reaching every potential
customer; others do not attempt to realize their total sales potential because
of limited financial resources; and still others, being more profit oriented
than sales oriented, seek to maximize profitable sales and not possible
sales. The estimates for sales potential indicates how much a company
could sell if it had all the necessary resources and desired to use them. The
sales forecast is a related but different estimate-it indicates how much a
company with a given amount of resources can sell if it implements a
particular marketing program.
SALES FORECASTING METHODS
6
A sales forecasting method is a procedure for estimating how much of a
given product (or product line) can be sold if a given marketing program is
implemented. No sales forecasting method is foolproof-each is subject to
some error. Some methods are unsophisticated, such as the jury of
executive opinion or the poll of sales force opinion. Others involve the
application of sophisticated statistical techniques, as regression analysis or
econometric model building and simulation. Two sales forecasting
methods may be either sophisticated or unsophisticated, depending upon
how they are used the projection of past sales and the survey of
customers buying plan.
Well-managed companies do not rely upon a single sales forecasting
method but use several. If different methods produce roughly the same
sales forecasts, then more confidence is placed in the results. But if different
methods produce greatly different sales forecasts, then the sales situation
merits further study.
Jury of executive opinion
There are two steps in this method; (1) high-ranking executives estimate
probable sales, and (2) an average estimate is calculated. The assumption is
that the executives are well informed about the industry outlook and the
companys market position, capabilities, and explain their rationales.
Companies using the jury of executive opinion method do so for one or
more of reasons;
1. This is a quick and easy way to turn out a forecast.
2. This is a way to pool the experience and judgment of well-
informed people.
3. This may be the only feasible approach if the company is so
young that it has not yet accumulated the experience to use other
forecasting methods.
7
4. This method may be used when adequate sales and market
statistics missing, or when these figures have not yet been put into
the form required for more sophisticated forecasting methods.
The jury of executive opinion method has weaknesses. Their
findings are based primarily on opinion, and factual evidence to
support the forecast is often sketchy. This approach adds to the
work load of key executive, requiring them to spend time that they
would otherwise devote to their areas of main responsibility, and a
forecast made by this method is difficult to break down into
estimates of probable sales by products, by time intervals, by
markets, by customers, and so on.
The Delphi technique
Several years ago researchers at the rand corporation developed a
technique for predicting the future that is called the Delphi technique. This
is a version of the jury of executives opinion method in which those giving
opinions are selected for their expertise. The panel of experts responds to
a sequence of questionnaires in which the responses to one questionnaire
are used to produce the next questionnaire. Thus, information available to
some and not to other experts is disseminated to all, enabling all to base
their final forecast on all available information. Some contend that this
technique eliminates the bandwagon effect of majority opinion.
INDIVIDUALIZING SELLING STRATEGIES TO CUSTOMERS.
The acid test of the appropriateess of personal-selling strategy comes when
particular salespeople interact with particular customers. From the
composite off all such interaction evolves the companys achievement of its
personal-selling objectives. Management makes its first key decision on
personal-selling strategy when it determines the size of the company sales
8
force. But after this decisions are implemented-after the desired number of
the desired kind of sales personnel have been recruited, and assigned to the
field-each sales person must individualize his or her own dealings with
each customer. The job, when boiled down to its essential, is to influence
customer behavior in ways that both benefit the customer and contribute to
the achievement of the companys personal-selling objectives.
Regardless of whether the salespersons major role is that of order getter
or order taker and regardless of the basic selling style, the extent of the
sales persons success depends on the outcome of interactions with the
customers. Each time the sales person comes into contact with a customer,
the sales person says certain things, does certain things, and behaves and
reacts to the customers behavior should, and generally does, vary from
one sales call to the next.
The nature of the variation in the sales persons approach to each
customer,Of course, is a matter of selling skill. This skill is a function of
both how good the sales parsons preplanning of each sales call has been
and performance on the call itself. In doing the preplanning, the skilled
salesperson analyzes a great deal of information about the customer and
the nature of its business. What are its key objectives and problems? Who
in the customers organization makes and influences buying decisions,
and the like? What rival sales personnel from what companies compete for
the accounts order, and what are they like?
After analyzing this and similar items of information, the skilled
salesperson set definite goals to accomplish on each call. Next, the skilled
salesperson plots the selling strategy to use on each successive call in an
effort to achieve these definite goals, that is, what the salesperson plans to
do and when. Then the salesperson makes the scheduled sales calls. If all
goes according to plan, the salesperson achieves the goal set for each call,
9
and thus the salesperson contributes to the achievement of the companys
overall personal-selling objectives.
While the individual member of the sales force ultimately determine the
success or failure of the companys overall personal-selling strategy, sales
management has the important responsibility for helping them develop
and improve their selling skills. How effectively salespeople perform their
assignment tasks, in other words, is closely related to sales managements
effectiveness in providing them with instruction on sales techniques.
SALES FORCE MANAGEMENT
Sales force management is a specialized type of personnel management.
Whether personnel management focuses upon sales, production, or office
workers, the same set of problems needs considering, but each problem
varies in nature and importance. It is impractical, for instance, to exercise
close and constant supervision over sales personnel-at least not in the sense
that one can supervise production and office workers. Furthermore, sales
personnel work away from their coworkers and immediate superiors, so it
difficult to develop a spirit of identity with and loyalty to the company and
to weld them into a unified team.
Sales personnel of necessity are giving freer rein than are production or
office workers. To a considerable degree, they are relied upon as
individuals to plan and control their own activities. Most sales personnel
visit the home office only infrequently, and centralized direction of their
activities is mainly by phone and mail. The salespersons job provides
limited opportunity for face-to-face contact and supervision, so sales
personnel often are referred to as account administrators or territory
managers.
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Other unique conditions surround the selling job. Often the salesperson
is away from home and family for extended periods. Selling success [or
failure] depends upon prospects and customers actions and reactions;
disheartening order turndowns and rebuffs from customers require the
salesperson to repress normal responses and to suppress a natural
tendency to become discouraged. The psychological effects of these
conditions accentuate the need for sales management to pay continual
attention to motivational factors.
The steps in sales force management are the same as those in general
personnel management. Sales force management work, as shown in figure
10.1, starts with job analysis-determining the job objectives, the component
duties and responsibilities, performance criteria, and reporting
relationships. The output of job analysis is the written job description that
is used in deriving the necessary qualifications [job specifications] of the
employee. Qualified job applicants must be found, and this requires
decision on recruiting sources and methods. From the supply of applicants,
those meeting the job specifications are selected. After hiring, applicants
undergo initial training and throughout their entire careers with the
company- receive continuing training through diverse delivery systems.
Compensation plan are designed to provide appropriate levels and
methods of compensation.
PART THREE SALES FORCE MANAGEMENT
When the salesperson is assigned to the field, other personnel activities
come into play. The salesperson is motivated to plan and make productive
use of working time. To improve the effectiveness of sales calls,
salespersons are counseled on working habits and methods. Controlling
sales personnel requires analysis of selling records and evaluations of sales
performance.
11
Sales force management activities mesh into a system. Faulty execution
of any activity results in complications for other activities. If recruiting and
selecting are sloppy, training tasks are magnified, supervision problems
become greater, motivating and controlling salespersons is more difficult,
and the turnover of sales personnel is accelerated. If training is inadequate,
potentially good people fail to reach high productivity, the compensation
system does not work as planned, supervision is ineffective, and there is
excessive personnel turnover. Similar bundles of difficulty arise in cases
of ineffective performance of other activities in the sales force management
system.
Economies of effective sales force management
There are economies in effective sales force management. Assume that
company X has ten salespersons, each making five calls out of five result in
sales and that the average sale amount to $500. If through more effective
management, each salesperson increases the number of calls to six per day,
the companys daily total becomes sixty [an increase of ten], and eight
more sales per day are made {8 x $500= $4,000}. This is equivalent to adding
two new salespeople at the old call rate. If sales personnel are paid wholly,
or partially, on a commission basic, their incomes are now higher and
morale should be improved. Furthermore, because some selling cost per
call should be reduced.
There are two types of expenses of maintaining a sales force: fixed
and variable. The fixed expenses are identical for all sales personnel
regardless of their productivity, while the variable expenses are highest for
the least productive sales personnel. Fixed expenses include sales salaries,
travelling, equipment {autos, sales folios, sales manuals, and so forth),
and advertising used to assist the sales force. Variable expenses include
12
sales commissions, training, motivating, supervising, and controlling
these expenses are lower per unit of product sold for productive
salespersons than for unproductive salespersons. In order wards, when a
company incurs variable expenses for maintaining its sales force, it receives
its highest return from the most productive sales personnel. Total expenses
per unit of product sold vary inversely with the productivity of the
salesperson.
Rate of sales personnel turnover
The rate of sales personnel turnover is a measure of the quality of sales
force management. This is the ratio of separations per 100 salespeople. For
example, accompany employing a sales force of 250 persons and having
twenty separations during the year has a rate of turnover of 8 percent.
The turnover rate influences the total expenses of sales force
management. Coasts of recruiting, advertising, fees to employment
agencies and so forth often run to more than $500 per recruit.
Interviewing coasts are high, because interview several applicants for
each selection. If an interview by an executive takes two hours, an
executives time is worth $25 per hour, and thirty people are considered for
each vacancy, total interviewing costs amount to $1,500 per person hired.
The costs of travel and time used for preparatory and follow up training
easily run $10,000 per person.
Some expenses are not readily calculated. For example, new recruits do
not produce as much as experienced sales personnel, and the ratio of
selling expenses to sales for a new person is likely to be excessive for at
least the first year. A conservative estimate of the excess is $3,500 per new
salesperson during the first year, and in some companies this excess is
higher because it takes longer for a salesperson to get fully into stride.
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The expenses of sales personnel turnover can account for a significant
drain on profits. In a company with a sales force of 400 and an annual
turnover rate of 25 percent, if the costs of replacing a single salesperson
come to $10,000, the annual costs of turnover total $1 million _and this is
only out-of-pocket cost. Other costs are increased expenses for supervision
and motivation, lost business, decline in customer goodwill from mistakes
of inexperienced salespersons, and miscellaneous expenses associated with
taking on people who do not succeed. Few accounting systems measure the
impact on profit of
1
DEVELOPING SALES TEAM
Recruitment and selection.
Orientation.
Training.
RECRUITMENT AND SELECTION
IMPORTANCE OF SELECTION
In attempting to recruit and select a new sales representative, the Sales Manager finds
himself in an unaccustomed (unfamiliar) role. Instead of being a seller he, for once, takes
on the role of the buyer. It is important that this role be carried out effectively because
future success of the sales force depends upon the infusion of high caliber sales
personnel.
According to Lancaster and Jobber (1991) there are a number of factors (facts) that
emphasize the importance of effective selection.
(i) There is wide variability in the sales effectiveness of Salespeople
The quality of the sales representatives, which sales managers recruit, can have a
substantial effect on sales turnover. Therefore there is need to recruit and select effective
salespeople.
ii) Sales people are very costly
The cost of employing salespeople is not just salary and commission. Most companies
provide cars if travel is required and travel expenses are paid by the company. Training is
also another part of expenses incurred by companies in order to import special skills on
sales people. No company will want to incur all of these costs in order to employ a poor
performer.
iii) Other important determinants of success, like training and motivation, are heavily
dependent on the nature character and qualities of the recruit.
Although sales effectiveness can be improved by training it is limited by innate ability.
Like other activities where skills are required, such as cricket, soccer and athletics the
ultimate achievement in selling is highly associated with personal x-tics.
Similarly, Motivational techniques may stimulate the salesperson to achieve higher sales
only to some extent. A lot will be dependent on inborn motivation of the salesperson
himself to complete a difficult sale or visit another prospect instead of returning home.
2
Studies have found out that fewer than seven out of ten of salespeople the Sales
Managers recruits are unsatisfactory. It is as a result of this problem that Sales
Manager is advised to approach recruitment and selection in professional
manner.
- There are a number of stages in the recruitment and selection process. An
understanding of each stage and correct procedures to be followed will maximize
the chances of selecting the right applicant.
i) Preparation of the job description and personnel specification.
ii) Identification of sources of recruitment and methods of communication.
iii) Designing an effective application form and preparing a short-list.
iv) Interviewing..
v) Placement and inductions
i) PREPARATION OF JOB DESCRIPTION AND SPECIFICATION
The preparation of an accurate job description should not be difficult for a Sales
Manager. This is because he/she has intimate knowledge of what is required having been
a sales person himself or herself and having been out in the field with salespeople during
training and evaluation exercises.
Job Description, Generally Covers the Following Factors
i) The title of the job e.g. sale executive, sales representative.
ii) Duties and responsibilities the tasks that will be expected of the new recruit
e.g. selling, after-sales service, information feedback and the range of
products/market/type of customer the salesperson will serve.
iii) To whom he will report.
iv) Technical requirements e.g. the degree to which the salesperson needs to
understand the technical aspects of the products he is to sell.
v) Location and geographical area to be covered.
vi) Degree of autonomy-the degree to which the salesperson will be able to
control his own work programme.
The job description once prepared will act as the blueprint for the personnel specification
which outlines the type of applicant the company is seeking. The technical requirements
3
of the job, for example, and the nature of the customers which the salesperson will meet,
will be factors, which influence the level of education and possibly, the age of the
required recruit.
The preparation of the personnel specification is more difficult for Sales Manager than
that of the job description. The following questions must be answered.
i) Must the recruit have selling experience?
ii) Should such experience be within the markets that the company serves?
iii) Should he be within a certain age range?
iv) Is it essential that the salesperson hold certain technical qualification?
These conditions reduce the number of possible applicants who qualify.
Another aspect of the personnel specification is the determination of qualities looked for
in the new salesperson. This is much more vague concept than the level of technical
qualifications, age, or previous experience. The qualities themselves may depend on the
nature of the job, the personal prejudices of the Sales Manager (golden rule of thumb Is
that many Managers favor people who are like themselves) or be based on more
objective research which has been collected on attributes associated with successful
salesperson. (E.g. common Skills, personality, determination, intelligence, motivation
etc). In summary, a personnel specification may contain all or some of the following
factors:
i) Physical requirements e.g. speech, appearance.
ii) Attainments e.g. standard of education and qualifications, experience and
successes.
iii) Aptitudes and qualities e.g. ability to communicate, self-
iv) Disposition e.g. maturity, sense of responsibility.
v) Interests e.g. degree to which interests are social, active, inactive interests.
vi) Personal circumstances e.g. married, single etc. The factors chosen to define
the personnel specification will be used as criteria of selection in the interview
itself.
4
ii). IDENTIFICATION OF SOURCES OF RECRUITMENT AND
METHODS OF COMMUNICATION
A. SOURCES
There are six main sources of recruitment.
i) From inside the companys own staff.
ii) From outside Recruitment agencies e.g. employment bureaus,
iii) From outside Educational establishments.
iv) From outside Competitors.
v) From outside Other industries (which are not competitors)
vi) From outside Unemployed.
1. Companys Own Staff
Advantages
- The candidate will know the company and its products.
- The company will also know the candidate much more intimately than an
outsider.
Disadvantages
- There is no guarantee that the candidate has selling ability.
- It limits infusion of fresh culture and ability.
2. Recruitment agencies
Recruitment agencies provide lists of potential recruits for a fee. It is in the long-term
interests of the agencies to provide only strong candidates. Examples Employment
bureaus, consultant organizations (Price water house coppers).
3. Recruitment Agencies
The Sales Manager can also recruit straight from the higher education institutions. The
advantages of recruiting from Universities and polytechnics are that the candidate is
likely to be intelligent and may possess the required technical qualifications.
5
4. Competitors
The advantage of this source is that the salesperson knows the market and its customers,
and the ability of the salesperson may be known to the recruiting company, thus reducing
the risk.
5Other Industries and Unemployed
Both of these categories may provide applicants with sales experience. Obviously careful
screening will need to take place in order to assess sales ability.
b. COMMUNICATION: (Personal Contact, advertisement)
Although some sales positions are filled as a result of personal contact, the bulk of
recruitment uses advertisement as the major communication tool.
- It is advisable to be aware of a number of principles, which can improve the
communication effectiveness of advertisements.
- One method of achieving impact is size. The advertiser should consider selecting
a large size that will have impact.
- Another thing to consider is the position of advert in the newspaper. A position
should be selected that has impact.
- The other component of impact is the content of the advertisement, of which the
headline is the most important ingredient. where it does not attract attention then
it is very unlikely that it will be read. The sales Manager should put himself in
the hands of prospective employees (think of what would attract him if he were
potential recruit.
- Where the imagination is low and funds are high, it is worth considering
employing a recruitment-advertising specialist who will produce the
advertisement (advise media).
- It is important to ensure that all of the major attractions (not just features) of the
job are included in the advertisement. This is necessary to attract applicants,
which is the objective of the exercise.
6
iii) DESIGNING AN EFFECTIVE APPLICATION FORM AND
PREPARING A SHORT-LIST
- The application form is a quick and inexpensive method of screening out
application in order to produce a short-list of candidates for interview.
- The questions on the form should enable the sales manager to check if the
applicant is qualified vis--vis the personnel qualification.
- Besides giving factual information, the application form also reveals defects such
as the inability to spell, poor grammar or carelessness in following instructions.
Four categories of information are usual on application forms:
i) Personal
- Name.
- Address or telephone number.
- Sex.
- Marital status.
- Children number.
- Date of birth and age.
ii) Education
- Schools: Primary/Secondary/High School.
- Further and higher education: Institutions, Courses taken.
- Qualifications.
- Specialized training e.g. apprenticeships, sales training.
- Membership of professional bodies e.g. MSK.
iii) Employment History
- Companies worked for.
- Dates of employment.
- Positions, duties and responsibilities held.
- Military service.
iv) Other Interests
- Sports.
7
- Hobbies.
- Membership of societies/clubs.
Such an application form will achieve a number of purposes:
i) To give a common basis for drawing up a short-list.
ii) To provide a foundation of knowledge which can be used as starting point for
the interview.
iii) To aid in the post-interview decision-making stage.
iv) THE INTERVIEW
- The job specification will be used as a tool of evaluating each of the short listed
candidates. In reality other, more personal considerations will also play a part in
the decision e.g. a candidate that the sales manager believes would be difficult to
work with or might be a troublemaker is unlikely to be employed. Therefore, the
decision will be based upon a combination of formal criteria and more personal
factors, which the sales manager is unable or unwilling to state at the personnel
specification stage.
- The overall objective of interviewing is to enable the interviewers to form a clear
and valid impression of the strengths and weaknesses of the candidates in terms of
the selection criteria. (Personnel specification) In order to do this each applicant
should be encouraged to talk freely and openly about himself.
- However, at the same time the interviewer(s) must exercise a degree of control so
that the candidates does not talk too much about one or two issues leaving
insufficient time for equally important factors (possibly where the candidate is
weaker) to be adequately discussed.
The interviewing setting
Interviewing setting will have a direct bearing on the outcome of the interview. The
following are some of the settings that are not good:
i) A room where the sales manager is likely to be interrupted by colleagues or
telephone calls. If such a room has to be used, visitors and telephone calls
should be barred.
8
ii) A very large room with just two or three people occupying it may not have
intimacy required to obtain a free, natural discussion.
iii) A large desk situated between candidate and interviewer, particularly if
littered with filling trays and desk calendars. This can have psychological
effect of distancing the two parties involved creating too formal an
atmosphere and inhibiting rapport.
A mere relaxed, informal setting away from the managers work desk is
likely to enable the interviewee to relax more easily.
Conducting the interview
- Besides creating the right atmosphere through proper selection of the interviewing
setting, the interviewers themselves can do much to establish rapport.
- What happens at the beginning of the interview is crucial to subsequent events.
The objective at this stage is to set the candidate at ease. This is because
candidates are usually anxious because of several reasons. For example, she may
feel embarrassed or worried about exposing her weaknesses. May feel
inadequately and lack confidence or may be worried about rejection. The anxiety
may be compounded by the fact that she has never seen the interviewers before
and thus may be uncertain about how aggressive, degree or pressure that will be
applied and type of questions they are likely to ask.
- The Sales Manager should reduce anxiety and establish rapport through the
following ways:
i) One of the interviewers (preferably the sales Manager) should bring the
candidate into the room, rather than the candidate being sent through a
secretary or junior employee. This reduces status differential and hence
encourages rapport.
ii) Open the conversation with few-to-answer questions, which although not
directly pertinent to the job, allow the candidate to talk to the interviewers and
gain confidence.
iii) The questions early in the interview should be if possible, open-ended rather
than close-ended-open ended questions allow the applicant scope for talking at
9
some length on the topic e.g. can you tell me about your experiences selling
pharmaceuticals.
Close-ended questions invite a short answers e.g. can you tell me how long
you worked for bechams? Closed-ended may imply that the applicant is
uncommunicative, when really the problem lies with the interviewer. (His
questions do not invite much talking).
iv) Interviewers should appear relaxed and [adopt a] be friendly, [easy manner].
v) They should be courteous and appear interested in what the applicant says.
- After establishing rapport and reducing anxiety, the interviewer will wish to
encourage the candidate to talk about himself, his experiences, attitudes, behavior
and expectations.
- In order to do this interviewer not only needs to develop the art of being a good
listener but also needs to develop skills in Making People talk.
Supplementary selection aids
i) Psychological Tests
Although success at the interview is always a determinant of selection, some firms
employ supplementary techniques to provide a valid measure of potential. Psychological
tests is one of the supplementary aids used when using these tests, care should be taken
and trained psychologist is usually needed to administer and interpret the results.
Weaknesses of Psychological Tests:
i) It is easy to cheat
The applicant, having an idea of the type of person who is likely to be successful at
selling, does not truly answer but fakes the test in order to give correct Picture. For
example, in response to a question such as who is of more value to society the
practical man or the thinker he answers the practical man no matter his true
convictions may be.
ii) Many tests measure interests rather than sales ability
The Sales Manager knows the interests of his successful salespeople and uses tests to
discover potential new recruits who exhibit similar interests patterns. The assumption
here is that sales success can be predicted by the type of interests, which a person has.
10
This is unlikely as discovering a new Mara Dona by measuring the interests of young
footballers.
iii) Tests have been used to identify individual personality traits which may not be
associated with sales success.
Factors such as how sociable, dominant friendly and loyal a person is, have been
measured in order to predict sales success. While some of these factors may be useful
attributes for a salesperson to possess, they have failed to distinguish between high and
low performing sales personnel.
5. Role playing
This is another aid in the selection of the salespeople. It is used in order to gauge the
selling potential of candidates.
1. EmploymentTests: To test the knowledge, skills and ability of candidates different
types of tests are used. The following are various kinds of employment tests given to
candidates.
i) General written tests: Candidate intelligence can be tested by giving tests in
Language, general knowledge etc.
ii) Proficiency tests: To test skills and talent e.g. speeding.
iii) Psychological tests: Objective is to test mental alertness, maturity, interest and
Aptitude.
2. Checking of references
Candidates are generally asked to mention the names of two or three persons who can be
contacted to give additional information about the candidates. Referees may be previous
employers, college authorities, lecturers etc.
3. Medical Examination
To ensure that the person be appointed enjoys good health in order to perform the job
effectively; he has to appear for medical examination. The standards of physical fitness
will depend on the nature of the job.
4. On-job-test and selection
Under this process, the applicant is placed on the job and his skill and capability
tested. Line supervisors give these tests.
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Closing the Interview:
Interviewer needs to close the interview when sufficient information has been obtained.
Usually the candidate is [forewarned] [or] advised of this by the interviewer. For
example by saying ok, weve asked you about yourself, are there any questions you
would like to ask me (us). At the end of this session, the interviewer explains when the
decision will be made and how it will be communicated to the candidate and then thanks
him for attending the interview.
They both stand and shake hands and the candidate is [shown the door] i.e. escorted to
the door.
v). PLACEMENTS AND INDUCTION (ORIENTATION)
Induction Introducing the employee to the organization. This is concerned with
making the selected employee to familiarize with the organization and the work he was
recruited to perform. This is the final stage when the candidate gets appointment letter
and joins the organization. The candidate is introduced to the environment and social set
up of the organization. He is given information about company history, major operations,
structure of the organization, functions of various departments, general policies, rules and
regulation, wages or salaries, hours of work, overtime, promotional prospects, safety,
discipline, grievance settling procedure, recreational facilities company products, clients,
dealers and so on. Basically the candidate should be given all the information that is
necessary for efficient and effective performance of his work. Specifically the recruited
employee should be introduced to
1. Company top management and other staff.
2. Code of Conduct.
3. Company markets.
4. How the company products are produced.
5. Company distributors, Bankers, Lawyers, auditors etc.
6. Company activities and clubs.
7. Competitors and their products.
Induction programme should be well planned and have timetabled i.e. time and activities
to be performed.
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TRAINING
Training is the process of acquiring knowledge and skills through formal or informal
ways. This is concerned with improving of skills or employees i.e. both new and old.
Producing the best available product or service is not enough, it has to be sold. If
companies are to survive they must attach the utmost importance to training their
employees sales force.
Top management must be totally committed to training by (through) sufficient resources
for this exercise. They must invest also appreciate and accept that benefits for training
may not be immediate, they take time to show. For training to succeed the employee must
accept there is a problem with his performance, otherwise he is unlikely to attempt to
solve the problem i.e. appreciate the role of training in improving work performance.
Performance: Training builds a reference frame within which learning can occur and
provides opportunity to practice skills with feedback, which is necessary to identify the
strengths and weaknesses of performance.
COMPONENTS OF TRAINING PROGRAMME [AREAS OF TRAINING]
A training programme will attempt to cover a combination of knowledge and skill
development. Five components can be identified:-
i) The company objectives, policies and organization structure
ii) Its products description of the product is made.
iii) Its competitors and their products.
iv) Selling procedures and techniques.
v) Work organization and report preparation for sales people.
The first three components are essentially communicating the required level of
knowledge to the salesperson.
i) The first component will probably include brief history of the company, how
it has grown and where it intends to go in future. The way in which the
company is organized will be described and the relationship between sales and
marketing function (including advertising, and ME) will be described so that
the salesperson has an appreciation of the support he is receiving from
13
ii) The second component, product knowledge will include a description of how
products are made and implications for product quality and reliability the
features of the product and the benefits they [provide] confer on the consumer.
iii) Competitors and their competitors products will be identified and analyzed in
order to spotlights differences between them and companys products.
Some training programs particularly within the industrial selling area is
essential here.
iv) Selling procedures and techniques. This component involves an examination
of personal selling skills (skills required in Opening, Need Problem
Identification, Presentation and Demonstration, Dealing with objections,
Negotiation and Closing the Sale) and will include Practical Sessions where
trainees develop skills through role-playing exercises.
v) The final component of the programme i.e. work organization and report
writing will endeavor to establish good habits among the trainees areas
which, because of day-to-day pressures may be neglected. The importance of
these activities on a salespersons performance and hence earnings will be
stressed.
TRAINING METHODS
1. The Lecture:
- This method is useful in giving information and providing a frame of reference to
aid the learning process.
- The lecture should be supported by the use of visual aids e.g. professionally
produced overhead transparencies, charts etc.
- Trainees should be encouraged to participate so that communication is not just
one-way. This is because discussions stimulates interests and allows
misunderstanding to be identified and dealt with.
2. FILMS [audio-visual training]
- These are a useful supplement to the lecture in giving information and showing
how a skill should be performed.
14
- They add an extra dimension to a lecture by demonstrating how the principles can
be applied in a selling situation.
- In terms of the stages of learning skills, lecture and films show the trainee what he
is required to do but he will lack the experience to put theory into practice
successfully.
3. ROLE PLAYING [Dramatize the Selling Process]
- This learning method moves the trainee into the stage of being consciously able to
perform a skill.
Advantages
i) It allows the trainee to learn by his own successes and failures in a buyer-
seller situation.
ii) Feedback is provided by other group members, the sales trainer and by audio-
visual means.
iii) Seeing oneself perform is an enlightening and rewarding experience and can
demonstrate to the trainee points raised by other members. It allows the
trainee to recognize his problems and accept them.
Disadvantages (CRITICISM)
i) Trainees may not take it seriously because by its nature it is not realistic.
ii) It assists in teaching inexperienced employee the basic skills of doing the
work in a less threatening environment than real situation.
Role playing can be used to develop each set of skills required in the selling process in a
series of exercises which gradually build up to a full sales interview.
CONCLUSION: The degree of success achieved by role-playing is heavily dependent
upon the skills of the sales trainer.
4. CASE STUDIES
- These are appropriate for developing analytical skills. Trainees are asked to
analyze situations, identify problems and opportunities and make
recommendations for dealing with them.
- Case studies for example can be used in setting call objectives e.g. a history of
buyer-seller relationship is given and the trainee is asked to develop a set of
sensible objectives for his next visit.
15
5. In-the-Field-Training [on-the-job]
- It is essential that initial training given to trainees is reinforced by the on-the-job
training.
- The experience gained by real-life selling situations plus the evaluation and
feedback given by his Sales Manager makes the salesperson move to the final
stage of learning skills-process i.e. unconsciously able.
- The salesperson does the right things automatically, just like a driver can co-
ordinate a set of skills necessary to drive a car without consciously thinking.
- Field training is designed to improve the performance of the experienced as well
as the new salesperson. In order to do this the Sales Manager needs to:
i) Analyze each salespersons performance.
ii) Identify strengths and weaknesses.
iii) Gain an agreement with the salesperson that a weakness exist.
iv) Teach the sales person how to overcome the weaknesses i.e. training.
v) Monitor progress to check that an improvement has been realized.
Methods of Evaluating Effectiveness Training Course I.E. Criteria Used To
Evaluate Training Course
i) Change in sales volume (units) 57%.
ii) Change in sales value (Ksh/=) 43%.
iii) Change in sales volume per call 30%.
iv) Change in sales value per call 30%.
v) Number of new account gained 42%.
vi) Number of old account lost 18%.
vii) Order/call rate 30%.
viii) Order taken/target 38%.
ix) Coverage of the territory 42%.
x) Length of time representatives spends with customer 15%.
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xi) Length of time representatives stays with company 18%.
xii) Ability shown during field visits (by sales manager)- 78%.
xiii) Questionnaire at end of course 50%.
xiv) Questionnaire at sometime in future 33%.
The above results of a study conducted by Standord-Bewley and Jobber (1989) on
methods used to evaluate training among a sample of companies in service, consumer
and industrial sectors.
TRAINING SALES MANAGERS
The Sales Managers require the following skills in order to perform their jobs
effectively.
i) Teaching skills.
ii) Analytical skills.
iii) Ability to motivate others.
iv) Communication skills.
v) Ability to organize and plan.
- Not all these skills are required to sell successfully. It is therefore not surprising
that top salespeople do not always make the best sales managers.
- However it is possible to train sales managers to analyze and evaluate
salespeople, identify motivational problems, suggest remedies, design appropriate
compensation schemes, and training others in selling techniques.
CONCLUSION:
- In training salespeople, a mixture of lectures discussion, films, role-playing and
case studies is often used to develop managerial skills.
Evaluation of effectiveness of training courses
- Change in performance.
- Questionnaire method i.e. Questionnaire at the end of the course or sometime in
future.
- Ability in performing the task.
- Length of time the employee stay with the company.
SALES MANAGEMENT AND PERSONAL SELLING
The process of marketing and selling
Meaning of marketing
The word marketing has been defined in different ways by several authors and scholars.
The following are some of the definitions which have been given;
1. American Marketing Association A.M.A. (1964)
Marketing is the performance of business activities that direct the flow of goods and
services from producers to consumers or users.
2. Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders. A.M.A.
(2004)
3. A social definition of marketing shows the role marketing plays in the society.
Hence Marketing is defined as A societal process by which individuals and groups
obtain what they need and want through creating, offering, and freely exchanging
products and services of value with others.
4. Stanton William J. (7
th
Edition 1984)
i) Marketing is the creation and the delivery of a standard of living. It involves:
Finding out what consumers want.
Then planning and developing a product or service that will satisfy
these wants.
And then determining the best way to price, promote and distribute
the products or services.
ii) That marketing is a total system of business activities designed to plan, price,
promote and distribute want-satisfying goods and services to present and
potential customers.
2. Kotler Philip (1997)
Marketing is a social and a managerial process by which individuals and groups
obtain what they need and want through creating, offering and exchanging
products of value with others.
Other meanings
Marketing is the bridge between production and consumption.
Marketing forms the vital link between peoples needs and means of satisfying
them.
Marketing is an activity that satisfies human needs through exchange processes.
Marketing is merely a civilized form of welfare in which battles are won with
words, ideas and disciplined thinking.
The above definitions have several implications.
1. Marketing is a managerial process - a systems definition.
2. The entire systems of business activities must be market oriented or customer
oriented. Customers needs and wants must be recognized and satisfied effectively.
3. Marketing, as the definitions suggests, is a dynamic process a total integrated
process rather than a fragmented assortment of institutions or functions. Marketing
is not any one activity, nor is it exactly the sum of several; rather, it is the result of
the interaction of many activities.
4. The marketing program starts with the product idea and does not end until the
customers needs and wants are completely satisfied. This may be some time after
the sales are made.
5. Customers must be satisfied in order for a company to make repeat business. This
implies that the success of a firm is not profitability parse but profitability through
customer satisfaction.
6. Marketing is not limited to business. Whenever you are trying to:
Persuade somebody to do something.
Donate to the Red Cross
Save energy
Vote for your candidate
Reform from littering the streets of Nairobi,
You are engaging in business. Marketing has a broad societal meaning. Modern
business marketing activities are, to a large extent, a consequence of societal
marketing.
THE CORE CONCEPTS OF MARKETING
From the foregoing definitions, it is evident that the definition of marketing rests on the
following important aspects of the market place and Consumer needs.
i) Needs, wants and demands.
ii) Products
iii) Utility, values and satisfaction.
iv) Exchange, transactions and relationships.
v) Markets.
vi) Marketing and marketers.
Needs
wants and
demands
Needs, Wants and demands.
The study of marketing begins with the understanding of human needs and wants.
Needs
A human need is a state of felt deprivation of some basic satisfaction. People acquire food,
shelter, clothing, safety, belonging, e.t.c. for survival.
These needs are not created by the society for marketers.
They exist in their very texture of human biology and conditions.
Wants
Are desires for specific satisfiers of these deeper needs.
While peoples needs are fewer, their wants are many.
Exchange,
transactions
and
relationships
Products
Utility, Value
and Satisfaction
Markets
Marketing and
Marketers
Demands
Are wants for specific products that are backed up by an ability and willingness to buy
them.
Wants become demands when backed up by the purchasing power.
Marketers influence demands.
They try to influence demand by making the product attractive, affordable and
easily available.
Product
1. People satisfy their needs and wants with products.
A product is anything that can be offered to someone to satisfy a need or want.
Products may take different forms, e.g.
Physical products
Persons as service providers
Places vacation places
Activities Physical exercise.
Organizations
Ideas
Utility, Value and Satisfaction
Utility.
Utility answers the question How do consumers choose among alternative products
(Product choice set) in order to satisfy his/her needs and wants?
Utility is the overall estimate of a products capacity to satisfy a consumers needs or
wants. This is the basis on which consumers choose particular products from product
choice sets.
Value.
Value is equated with price. A product is said to be of better value if it is more in terms of
its price. Marketers should provide value to customers.
Satisfaction.
Occurs when a product conforms to a consumers needs.
Exchange, Transactions and Relationships.
Exchange.
Marketing emerges when people decide to satisfy their needs and wants through
exchange. Exchange is one of the four ways that people can acquire products they need.
Other ways include:
Self production
Inheritance
Begging
Stealing.
Meaning
1. Exchange is the act of obtaining a desired product from someone by offering
something in return.
2. Exchange is the defining concept underlying the discipline of marketing.
3. For exchange to take place, five conditions must be satisfactory.
There has to be at least two parties to the exchange
Each party has something that might be of value to the other party
Each party is capable of communication and delivery
Each party is free to accept or reject the offer.
Each party believes it is appropriate or desirable to deal with the other party.
4. If these conditions exist, there is a potential for exchange.
5. Whether exchange actually takes place, depends upon whether the two parties can
agree on the terms of exchange that will leave them both better off than before the
exchange.
6. Exchange must be seen as a continuous process rather than an event.
7. Two parties are seen to be engaging in exchange if they are negotiating and moving
towards an agreement
Transaction
If an agreement is reached, we say that a transaction has taken place.
A transaction consists of a trade of values between two parties.
It involves several dimensions:-
At least two things of value
Agreed upon conditions
A time of agreement
A place of agreement
Usually a legal system arises to support or enforce compliance on the part of the
transactions.
Markets.
The concept of exchange leads to the concept of markets.
A market consists of all the potential customers sharing a particular need or want
who might be willing and be able to engage in exchange to satisfy that need or
want.
The size of the market therefore depends on the number of persons who exhibit the
need; have resources that interest others and are willing to offer these resources in
exchange for what they want.
Sellers constitute the industry and
Buyers constitute the market.
A market is a set of all actual and potential buyers of a product or a service.
Marketing and Marketers.
Marketing consists of human activities taking place in relation to markets.
Marketing means working with marketers to actualize potential exchanges for the purpose
of satisfying human needs.
Marketing refers to managing markets to bring about exchanges and relationships for the
purpose of creating value and satisfying needs and wants.
A marketer is someone seeking a resource from someone else and is willing to offer
something of value for exchange. The marketer can therefore be the buyer or the seller.
THE MARKETING PROCESS
In the first four steps, companies work to understand consumers, create customer value
and build strong customer relationships. In the final step, companies reap the rewards of
creating superior customer value. By creating value for customers, they in turn capture
value from consumers in the form of sales, profits, and long term customer equity.
MARKETING MANAGEMENT PHILOSOPHIES
Introduction
Marketers need guidance regarding their conduct in the market place. This is because
conflicts are bound to arise between the needs of the society, customers and the company.
These guidance are known as the marketing principles, rules, concepts or philosophies.
There are five competing concepts that govern the operations of companies/ organizations,
include;
1. The production concept
2. The product concept
3. The selling concept
4. The marketing concept and
5. The societal marketing concept.
1. THE PRODUCTION CONCEPT
This concept holds that consumers will favor those products that are widely available and
low in cost. Management focuses on high production efficiency and wider distribution
coverage.
This concept makes sense under the following circumstances;
1. When the product is a basic necessity
2. The customers are low income earners
3. When the production costs are high and have to be brought down through high
production efficiency
4. When the market is highly price sensitive.
5. When demand for the product exceeds the supply and some other means have to be
used to allocate the products to the customers.
Examples of companies guided by this concept include,
i. City Council primary schools
ii. Unilever- for its basic foodstuff
iii. City Council health services.
This concept ensures product availability to the consumers. However, product quality is
compromised.
2. THE PRODUCT CONCEPT
The product concept holds that consumers favor those products that offer the most
quality, performance, and features. Marketers assume that consumers will buy those
Products of high quality and shun those products of inferior quality.
Management focuses on producing high quality products and improves on them over
time.
This concept may apply under the following conditions;
i. When the market is not price sensitive
ii. In the case of conspicuous goods
iii. Where the customers are well-off financially.
The concept has been criticized on the following grounds:
The idea of a good product is defined from the companys end but not the
consumers. The concept thus leads to marketing myopia [short-sightedness].
There is undue concentration on the product rather than the needs of the consumer.
A company may end up producing goods that may not have demand.
The concept ignores the needs of the society
Examples of firms practicing this concept are;
Those selling jewelry,
Private schools and
Private hospitals
3. THE SELLING CONCEPT
This concept holds that consumers, if left alone, will ordinarily not buy a lot of a
companys products. The organization must therefore undertake aggressive selling and
promotion effort. That is, a company must focus on hard selling. Under hard selling,
consumers are not willing to buy such products easily.
Examples of products sold under this concept are;
Life insurance policies
Political campaigns
Fund raisings
New products
Encyclopedias
Funeral plots
Coffins.
The concept may work under the following circumstances;
i. Where the company is operating under excess capacity and wishes to fully utilize its
resources with no regard to the products demand
ii. Where the product is new in the market
iii. Where the firm has adequate machinery for effective promotion
iv. where the products are obsolete or are slow moving
The selling concept has some limitations. Namely:
i. Consumers may be forced to buy products that they do not have real need for
ii. It is an expensive concept as it requires a lot of resources, both human and financial.
4. THE MARKETING CONCEPT
The marketing concept holds that the key to achieving organizational goals lies in
determining the needs and wants of the target market and delivering the desired
satisfaction more effectively and efficiently than competitors. This concept has been
expressed in many colorful ways;
Find needs and meet them
The customer is always right
The customer is the king
At Your service.
Your problem is our business
Have it Your way
You are the Boss, e.t.c.
The concept rests on five main pillars;
1. Market focus
The company must define the boundaries of its market. It should know those customers
that are members of their market. This can be done through a process known as
segmentation.
2. Customer focus
The company should determine the needs and wants of the customers from the customers
point of view but not the companys. Customers needs must be identified and satisfied as
this result into customer loyalty which is a source of Co goodwill.
3. Integrated or coordinated marketing
When all company Departments work together to achieve the consumers interest, the
result is integrated marketing
It takes place at two levels;
1. The Marketing function:
The various marketing functions advertising, marketing research, sales, branding, e.t.c. must
work together. They must be well coordinated from the customers point of view.
2. Company-wide orientation:
Marketing must be embraced by other departments. They must think customer. Marketing
is not a department but much of a company-wide orientation. Teamwork must be fostered
among all departments. This requires the practice of internal as well as external marketing.
Whereas the latter is directed at people outside the firm, the former is the task of hiring,
training and motivating employees to serve customers well. Managers must consider
customers as the true profit centers hence adopt a modern organizational chart.
4. Profitability
The ultimate purpose of the marketing concept is to help organizations achieve their
objectives. In the case of private firms, the major one is profit. However, they should aim
for profits through customer satisfaction.
5. Competition
The concept recognizes the existence of competition. However a Co should offer superior
customer value. It should serve customers better than competitors.
Circumstances under which the marketing concept may be practiced by companies
Most companies do not embrace the marketing concept until driven to it by circumstances
Various events forcing companies to adopt the marketing concept includes:-
1. Sales decline: - when sales fall, companies panic and look for ways of increasing
sales.
2. Slow growth in sales forces some companies to search for new markets. They realize
they need marketing skills to identify new opportunities.
Changing buying patterns
3. Most companies operate in markets characterized by rapidly customer ways such
companies need more marketing know-how if they are to track buyers changing
values.
4. Increasing competition.
Complacent companies may suddenly be attacked by powerful competitors, e.g.
Kenya Breweries
5. Increased market expenditures.
Reasons to embrace the marketing concept
Marketers arguments:
1. The company assets have little value without the existence of customers.
2. The key company task therefore is to attract and retain customers.
3. Customers are attracted through competitive superior offerings and retained
through satisfaction.
4. Marketings task is to develop a superior offering and deliver customer satisfaction.
Societal Marketing Concept
Some people have questioned whether the marketing concept is an appropriate philosophy
in the age of:
Environmental deterioration
Resource shortages
Explosive population growth.
World hunger and poverty
Neglected social services. i.e. are companies that do the excellent job of satisfying
customer needs necessarily getting in the best long-run interest of consumers and
society?
The marketing concept sidesteps the potential conflicts among consumers
1. Wants
2. Interests and
3. Long-run societal welfare
The societal marketing concept holds that
Organizations task is to determine the needs, wants and interests of the target markets
and to deliver the desired satisfactions, more effectively and efficiently than competitors in
a way that preserves or enhances the consumers and the societys well being.
The societal marketing concept calls upon marketers to build Social and Ethical
considerations into their marketing practices. They must balance the conflict criteria of
Company profits Consumer needs and Public interests.
ROLE OF MARKETING IN SOCIETY
a) Creating value for customers
The marketing department starts by researching consumer needs, wants and managing
marketing information to gain a full understanding of the market place.
Good marketing companies know they cannot serve all customers in every way and need
to focus their resources on the customers they can serve best and most profitably.
b) Championing More Ethics and Social Responsibility
Marketers are reasoning their relationships with social values and responsibilities. With
the worldwide consumerism and environmentalism movements, todays markets are being
called upon to take greater responsibility for social and environmental impact of their
actions. More forward looking companies are readily accepting their responsibilities to the
world around them .They take socially responsible actions as opportunities to do well by
doing well.
c) Growth of not for-- Profit Marketing
In recent years, marketing has become a major part of the strategies of many not-for-profit
organizations such as colleges, hospitals, museums and even churches. Churches facing
competition and shrinking numbers, have increasingly borrowed marketing tools and
tactics from companies selling worldlier goods. Many are tailoring their core product-
religion-to needs of specific demographic groups.
Similarly private colleges facing declining enrollment and rising costs are using marketing
to compete for students and funds.
d) Creation of new Lifestyles in the New Digital Age
Using todays vastly more powerful computers, marketers are able to create detailed
database and use them to target customers with offer designed to meet in their specific
needs and buying patterns. Technology together with marketing has brought a new
communication and advertising tools-ranging from cell phones, CD ROMS and interactive
TV to video kiosks at airports and shopping malls. Through e-commerce, customers can
learn about, design, order and pay for products and services-without leaving home. This
has brought about a culture of convenience, express delivery and home deliveries.
THE SELLING PROCESS
Prospecting
and
qualifying
Closing
Pre-
approach
Handling
objections
Approach
Presentation
And
demonstration
Follow-up
Prospecting and Qualifying
This is the first step in the selling process which involves, identifying qualified potential
customers, identify good ones and screen out poor ones. Approaching the right potential
customers is crucial for selling success.
Pre-approach and Approach
Pre-approach
To learn as much as possible about a prospective customer or business/
organization before making a sales call.
Set call objectives, decide on the best approach and timing.
Approach
Approach is the step in which a salesperson meets and greets the buyer to get
the relationship off to a good start. This step involves the salespersons
appearance, opening lines, and the follow up remarks.
Presentation and Demonstration
Prepared sales presentation
A memorized presentation.
Not adapted to each individual customer.
During presentation, the salesperson tells the product story to the buyer, presenting
customer benefits and showing how the product solves the customers problems.
Handling Objections
Customers always have objections during the presentation or when asked to place
an order. The problem can be logical or psychological, and objections are often
unspoken. In handling objections, the sales person should use a positive approach,
seek out hidden objections and ask the buyer to clarify them and take the objections
as opportunities to provide more information and turn the objections into reasons
for buying.
Closing
After handling the prospects objections, the salesperson tries to close the sale. Some sales
people do not handle closing well. They may lack confidence, feel guilty about asking for
the order or fail to recognize the right moment of closing the sale. One of the closing
techniques a salesperson can use is to ask for the orders, review points of agreement, help
to write up the order, and ask for instance which model the buyer wants. The salesperson
may offer the buyer special reasons to close such as lower prices, or an extra quantity at no
charge.
Follow up
This is the last step in the selling process which is necessary if the sales person wants to
ensure customer satisfaction and repeat business. Right after closing the salesperson
should complete any details on the delivery time, purchase terms and other matters. The
sales person should then schedule a follow up call when the initial order is received, so as
to make sure there is proper installation, instruction and servicing.
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PERSONAL SELLING
INTRODUCTION
Sales management, personal selling and salesmanship are all related. Sales
management directs the personal selling effort, which in turn, is implemented largely
through salesmanship. The term personal selling and salesmanship are often used
without distinction. However, there are vital differences between two terms. Personal
selling is a broader concept than salesmanship. Salesmanship is one of the aspects
of personal selling. Salesmanship is one of the skills used in personal selling, it is not all
of it. Salesmanship is the art of successfully persuading prospects or customers to buy
products or services from which they can derive suitable benefits, thereby increasing
their total satisfaction. Salesmanship is seller initiated effort that provides prospective
buyers with information, and motivates them to make favourable decisions concerning
the sellers products or services. Personal Selling is a highly distinctive form of
promotion. It is basically a two way communication involving not only individual but
social behaviour also. It aims at bringing the right products to the right customers. It
takes several forms including calls by companys sales representative, assistance by a
sales clerk, an informal invitation from one company executive to another. It is
employed for the purpose of creating product awareness, stimulating interest,
developing brand preference, negotiating price etc.
The increase in complexity of products has increased the importance of personal selling.
Manufacturers of highly technical products such as computers, electronic typewriters,
digital phones, microwave kitchen appliances, remote control equipments etc. depend
more heavily on personal selling than do grocery or toiletry products
manufacturers. Ever growing competition from domestic and foreign sources have
also increased the importance of sales persons in the marketing effort of a firm. In
personal selling, companys sales persons are often referred to as sales representative,
salesman or sales girl, they remain on the companys payroll or work on commission
basis or both to push the product in the market by positively motivating the prospective
customer through oral presentation or demonstrating the product in question.
Consumers want all sorts of goods and services but inertia may keep them from buying.
Sales efforts stimulate the consumption process by reducing peoples inherent
reluctance to make purchase decision. In fact sales person act as catalyst in the market
place. When the nature of the product is such that the buyer needs special information
in order to use it properly, sales representative acts as a consultant to consumer, to
apprise them of products technicalities and usage. Sales person also work out the
details of manner and timing of given physical possession. In case of industrial
2
products, the promotion mix mostly consist of personal selling rather than advertising.
Being high value and complex product, personal contact with the customer is essential
to convince him of the products quality and utility. On the other hand, consumer
product companies use personal selling together with advertising, to influence prospect
to try their brand. But personal selling in this case cannot substitute for advertising, it
can only be used tactically to intensify marketing effort, mainly because it is expensive.
PERSONAL SELLING OBJECTIVES
The qualitative personal selling objectives are long term and concern the contribution
management expects personal selling to make in achieving long-term company
objectives. These objectives generally are carried over from one periods promotional
program to the next. Depending upon company objectives and the promotional mix,
personal selling may be assigned such qualitative objectives as-
1. To do the entire selling job (as when there are no other elements in the promotional
mix).
2. To service existing accounts (that is, to maintain contacts with present customers,
take orders, and so forth).
3. To search out and obtain new customers.
4. To secure and maintain customers cooperation in stocking and promoting the
product line.
5. To keep customers informed on changes in the product line and other aspects of
marketing strategy.
6. To assist customers in selling the product line (as through missionary selling).
7. To provide technical advice and assistance to customers (as with complicated
products and where products are especially designed to fit buyers specializations).
8. To assist (or handle) the training of middlemens sales personnel.
9. To provide advice and assistance to middlemen on management problems.
10. To collect and report market information of interest and use to company
management.
The basic considerations in setting qualitative personal selling objectives are decisions
on sales policies and personal selling strategies and their role in the total promotional
program. After this role is defined, qualitative long-term personal selling objectives are
set. In turn, the qualitative personal selling objectives become the major determinants of
the quantitative personal selling objectives. The quantitative objectives assigned to
personal selling are short term and are adjusted from one promotional period to
another. The sales volume objective-the rupee or unit sales volume management sets as
the target for the promotional period-is the key quantitative objective. All other
quantitative personal selling objectives are derived from or are related to the sales
3
volume objective. Thus, discussion here focuses upon the setting of sales volume
objectives. Setting the sales volume objective influences the setting of other quantitative
personal selling objectives, among them the following:
1. To capture and retain a certain market share.
2. To obtain sales volume in ways that contribute to profitability (for example, by selling
the optimum mix of company products).
3. To obtain some number of new accounts of given types.
4. To keep personal selling expenses within set limits.
5. To secure targeted percentages of certain accounts business.
RELEVANT SITUATION FOR PERSONAL SELLING
Let us discuss some of the situations when personal selling in a company becomes more
relevant.
1. Product situation: Personal selling is relatively more effective and economical in case:
(a) When a product is of a high unit value like Xeroxing machine, computers etc.
(b) When a product is in the introductory state of its life cycle and require creation of
core demand.
(c) A product requires personal attention to match specific consumer needs e.g.
insurance policy.
(d) Product requires demonstration e.g. most of the industrial products.
(e) Product requires after-sales service.
(f) Product has no brand loyalty or very poor brand loyalty.
2. Market situation: Personal selling situation can be best utilized when:
(a) A company is selling to a small number of large-size buyers.
(b) A company sells in a small-local market or in government or institutional market.
(c) Desired middle men or agents are not available.
(d) An indirect channel or distribution is used for selling to merchant-middlemen only.
3. Company situation: Personal selling is relatively more effective and economical
when:
(a) The company is not in a position to identify and make use of suitable non-personal
communication media.
(b) A company cannot afford to have a large and regular advertising outlay.
4. Consumer behaviour situation: Personal selling is more effective when:
4
(a) Purchases are valuable but infrequent.
(b) Consumer needs instant answers to his questions.
(c) Consumer requires persuasion and follow-up in the face of competitive pressure.
DIVERSITY OF SELLING SITUATIONS
All of us being consumers often come across variety of selling situations. Differences in
marketing factors cause each company to have individualized selling styles. Each
different type of selling job requires the sales person to perform a variety of different
tasks and activities under different circumstances. The job of a soft drink driver
salesperson who calls in routine fashion on a number of retail stores is different from
that of a computer sales person who sells a system for managing information
to executive of a consultancy firm. Before categorizing sales persons into basic selling
styles, one convenient way to classify the many different types of sales job is to array
them on the basis of the creative skill required in the job, from simple service-or repeat
order selling to the complex developmental selling. Let us now discuss the different
kinds of selling positions prevalent in Indian companies.
Delivery sales person: The primary job of the delivery sales person is to deliver the
product e.g. soft drink, bread, milk etc. The selling responsibilities are secondary. Good
service and a pleasant personality may lead to more sales.
Inside order taker: The retail sales person standing behind a counter is an inside order
taker. The customer comes to the sales person with the intention to buy a product or
service, the sales person only serves him or her. The sales person may use suggestion
selling but ordinarily cannot do much more.
Outside order taker: The soap or spices sales person calling on retailer is an outside
order taker. They do little creative selling. In contract with store personnel these
representatives actually may be discouraged from doing any hard selling. That task is
left to executives higher in the hierarchy.
Missionary sales people: These sales persons are not expected or permitted to solicit an
order. Their job is to build goodwill or to educate actual or potential user or provide
services for the customers, as in the case of Medical representatives, working for the
pharmaceutical company.
Consultative sales person: Consultative sales are characterized by the product or
service that is sold at the higher level of an organization e.g. computer system or
management consultancy service. The decision to purchase such products involves
higher capital outlay thus sales job requires a low key, low pressure approach by the
sales person. It would also require a very strong knowledge about product, patience to
discuss product with several people of organization and potential benefits to the user.
Even at times when the progress of sales slows down representative has to make
5
creative and sensitive efforts to resume interest but without appearing to exert pressure
on the prospect.
Technical sales personnel: The most distinctive characteristic of technical sales is the
product knowledge required by its sales person, unlike the consultative sales, where
sophistication in organization relationship and persuasive ability are sales persons
most valuable assets. Even time required to sell the product is relatively less than
consultative sales.
Most of the technical purchasing requires approval of several people but only one or
two people with technical knowledge influence decision. If the sales representative is
able to satisfy these people with product characteristics, application, installation
process, approval from higher management is usually forthcoming. The technical sales
persons
though not strangers to the process of making a sale, are trained to utilize the rational
approach, by going into details of product utility and features.
Commercial sales person: This field generally includes nontechnical sales to business,
industry, government and non-profit organization e.g. office equipment, wholesale
goods, building products, business services and others. Unlike the previous two types,
it is customary for the commercial sales person to make sales on first or second call. The
process stresses approach to right person (decision maker), making a smooth
presentation and closing the sales. The field is composed of order takers, to follow up
and maintenance of accounts and order getter, to develop new accounts. Since these
require different approaches, they normally require different personality traits e.g. the
order getter are more aggressive and more highly motivated.
Direct sales people: Direct sales are primarily concerned with the sales of products and
services to ultimate consumers e.g. restaurants, door to door sales, insurance,
encyclopaedias, magazines etc. There is normally some emotional appeal associated
with this type of selling, thus sales persons are required to possess strong persuasive
ability. Often length of time to close sales is shortest in the case of above product
categories. In fact, sales person are trained to close the sales on the first visit because it is
felt if consumers are given time, they will either cool off from buying or will buy from
competitor.
SELLING PROCESS
All selling process contain the same basic steps, though the detail of each step and time
required to complete it will vary according to the product that is being sold. For
example: a door to door sales representative may go through all the steps from
prospecting to closing of sale in a matter of ten to fifteen minutes in contrast, the selling
process for computer or electronic typewriter may take several visits, even years, for
getting an order.
6
Prospecting
The selling process begins with prospecting or finding qualified potential customers.
Except in retail selling, it is unlikely that customers will come to the sales person. In
order to sell the product, the sales person must seek out potential customers,
prospecting involves two major activities-
(a) identifying potential customers also known as prospects; and
(b) qualifying them in order to determine if they are valid prospects.
(a) Identifying prospects
The identification of potential customers is not an easy job, especially for a new sales
person. Rejection rate is quite high and immediate payoffs are usually minimal. In some
consumer goods businesses, identification of prospects usually come from friends and
acquaintances, other sales people, former customers, present customers etc. Few of the
best sources and techniques for finding prospects are discussed below.
Present customers: The best source of prospects is usually the sales persons existing
satisfied customers. It is much easier to sell additional goods and services to existing
customers than to attract new customers. Indian companies are using this method of
selling successfully. For example person or an organization who has purchased a
portable typewriter from an office automation product company and is pleased with it
is usually more receptive to purchase a bigger typewriter and similar product from the
same company than someone else. This is the main reason, present customers should
get first priority by the company when new products and services are introduced.
Endless chain: This is also an effective prospecting tactics. In this method companies
use satisfied customers as source of referrals. Sales representatives ask current
customers for names of friends or business associates who might need similar products
or services. Then, as the sales person contacts and sells to these prospects, more referrals
are solicited. In this way the process continues further.
Centre of Influence: Another effective prospecting technique based on referrals is the
center of influence approach. A center of influence is a person with information about
other people or influence over them that can help a sales person identify good
prospects. Some frequently used centers of influences are housewives, bankers, local
politicians etc.
Spotters: Some companies use spotters as a source for prospecting potential customers.
Spotters are usually sales trainees who help sales person identifying prospects, thus
saving time and qualifying sales lead.
Cold call: Cold call is also known as unsolicited sales calls. This prospecting techniques
involves knocking on doors. The sales person makes contact with a potential
7
customers, introduces himself or herself, and asks if there is a use for the product or
service. This technique is utilized by the sales person when they have time available
between scheduled appointments.
Directories: A wide variety of directories are full of prospect. The classified telephone
directory is the most obvious one. A sales person may also find that membership
directories of trade associations, professional societies, and civic and social
organizations are good sources for prospects.
Mailing lists: In India, specialized companies compile lists of individuals and
organizations for direct mail advertisers. These lists may also be used to identify sales
prospects. The major advantages of mailing list are that they are often more current and
more selective than directories.
Trade shows and exhibitions: A cost effective way to make personal contacts and
locate prospective buyer is to participate in trade shows and exhibitions. Now a days
more and more companies are increasing their participation in these shows and
exhibitions to
companys booth by mailing invitations or promising a gift. Advance announcements
sent to trade publications may also help to attract prospects. In view of the rising costs
of personal selling trade shows have become an increasingly important source of
prospecting. India International Trade Fair organized by Trade Fair Authority of India
every year provides a good example of usage of trade shows for prospecting.
(b) Qualifying prospects
Once the sales person has identified potential customers, he or she must qualify them to
determine, if they are valid prospects. Unless this is done, time and energy is wasted in
trying to sell to people who cannot or will not purchase the product or service. There
are several factors to consider while qualifying a prospect. One approach to qualifying
often called MAN (Money, Authority and Need) approach is given below:
Money: Does the prospect have the money or resources to purchase a product or
service? Ability to pay is very critical factor in qualifying a prospect. The sales people
must be familiar with financial resources of a prospect.
Authority: Does the prospect have the authority to make
commitment? This is a particular concern when dealing with corporation, government
agencies or other large organizations. Even while selling to a married couple, it may be
difficult to identify who actually makes the purchase decision. A sales person must
identify the key decision maker early to economize on selling time more effectively.
Need: Does the prospect need the product or service? If a sales person cannot establish
that the customer will benefit from purchasing a product or service, there is no reason
8
to waste a sales call. The prospect either will refuse the offer or will end up dissatisfied
with the purchase. Before proceeding further the sales person should first appraise
whether money, authority and need exist with the prospect.
Preparation
After a prospect has been identified and qualified, the sales person prepares for the sale
of product or service. The preparation stage involves the two key activities i.e. Pre-
approach and Call Planning.
(a) Pre-approach
The pre-approach step includes all the information gathering activities necessary to
learn relevant facts about the prospect and his or her needs and situations.
Four necessary steps of pre-approach are:
1. It should disclose the party need and ability to buy.
2. It should provide information that will enable the seller to tailor the presentation to
the prospect.
3. It should provide information that may keep the sales person from making serious
tactical errors during the presentation.
4. Finally, a good pre-approached increases the sales person confidence and makes him
confident to handle whatever may arise during the sales.
(b) Call planning
Call planning involves a specific planning sequence. The sales person defines the
objective of the call, devise a selling strategy to achieve this objective, and makes the
appointments. The primary objective of any sales effort is to get an order. For some
sales call intermediate objectives may be needed. Some examples of intermediate
objectives are:
To obtain more information about the prospect.
To relate the prospects needs and concerns to features and benefits of the product or
service.
To obtain permission for demonstration of the product.
To introduce a new distributor.
The sales person must develop a strategy, or course of action to achieve his or her
objective. Careful consideration of the prospects background and needs is required in
order to able to formulate a tailor made strategy appropriate for the prospect. Since
sales calls are costly, they should be arranged in advance. Cold calls i.e. calls without
specific appointment may be appropriate for introducing the sales person or dropping
9
off information. This method is generally inefficient for selling most products and
services and is not consistent with modern professional selling.
Presentation
After establishing rapport with the prospects through calls, the sales person proceeds to
the formal sales presentation. The objective of the presentation is to explain how the
product meets the special needs of the consumer. The job of the sales person is to
inform the prospect about the characteristics, capabilities and availability of goods and
services that are for sale. In order to ensure that the presentation is understood by the
prospect, the sales person should be clear in his/her communication. Presentation
should also be interesting enough to keep the attention of the prospect focused on the
proposal.
Sales presentations are classified into the different categories:
Fully automated, Semi-automated, Memorized, Organized, and Unstructured.
Fully automated: The fully automated presentation is the most highly structured
approach, based on film or slide presentations. The sales person simply answer
questions or clear up doubts. e.g. selling life insurance to the rural or semi-urban
prospects.
Semi-automated: In this approach, the sales person reads from brochures or literatures,
adding comments to the prepared materials when necessary. A common example is
selling of pharmaceutical products by medical representatives.
Memorized: In memorized presentation, company message is presented, with few
changes initiated by the sales person.
Organized presentation: The most popular and often the most effective sales
presentation method is the organized presentation. With this method the sales person
has complete flexibility in oral communication but follows a company prepared outline
or checklist. The organized approach best exemplifies the selling process in which
customers are moved through four stages to a purchase decision; i.e. attention, interest,
desire and action (AIDA).
Unstructured presentations: (Also referred to as problem solving) In this approach, the
buyer and seller together explore the problems that are the real sources of the
companys needs. Although unstructured presentations are often effective and widely
used, they have a number of limitations. Such presentations tend to be not too well-
focused. As a result, points are often missed and time is wasted. Further, sales person
do not usually anticipate objections but may have to face surprise complaint from the
prospects. Because it is difficult to teach sales person how to use the unstructured
method, the problem solving presentation seems best suited to experienced, sales
10
person who are selling to established customers. Sales presentation comprises of two
distinct activities, approach and demonstration.
a) Approach
When the sales person has the name of the prospect and adequate pre-approach
information, the next step is the actual approach. It frequently makes or breaks the
entire presentation. If the approach fails, the sales person often does not get a chance to
give a presentation or demonstration. It gets the prospect attention, it immediately
inspires interest in hearing more about the proposition, and it makes easy transition
into the demonstration phase.
Four basic approaches are in common use:
1. The introductory approach, the sales person introduces himself to the prospect and
states what company he represents.
2. The product consists of handling the product to prospect with little conversation. It
can be most effective when the product is unique and creates interest on sight.
3. The sales person starts the sale in a consumer-benefit approach by informing the
prospect of what the firm can provide in benefits. In other words, directs the prospects
attention toward the benefits the firm has to deliver.
4. Lastly, referral approach successful in getting an audience with prospect who is
difficult to see directly. It consists of obtaining the permission of a past or present
customer to use his or her name as a reference in meeting a new prospect.
(b) Demonstration
The demonstration is the core of the selling process. The sales person actually transmits
the information and attempts to persuade the prospect through product demonstration
to make a customer. Two factors should be taken into consideration in preparing an
effective product demonstration:
i) The demonstration should be carefully rehearsed to reduce the possibility of even a
minor malfunction.
ii) The demonstration should be designed to give customers hand on experience with
the product wherever possible. For example an industrial sales representative might
arrange a demonstration before the purchasers technical personnel.
Handling objections
All sales person confront sales resistance i.e. actions or statements by a prospects that
postpone, hinder or prevent the completion of the sale. Normally sales resistance takes
the form of an objection which can be classified as stated or hidden. Prospects may state
11
their objections to a proposition openly and give the sales person a chance to answer
them. This is an ideal situation because everything is out in the open and the
sales person does not need to read the prospects mind. Unfortunately, in many
instances prospects hide their real reasons for not buying. Beside having hidden
objections, their stated objection may be phoney. Unless one can determine the real
barrier to the sale one shall not be able to overcome it. There are two major techniques
for discovering hidden objections. One is to keep the prospect talking by asking probing
questions. The other is to use insights gained through experience in selling the product,
combined with a knowledge of the prospects situation, to perceive the hidden objection.
Often objection to price and product are also faced by sales person either in a form of
unaffordable or too high price. Product objections can be answered best when sales
people have extensive product knowledge of both their own products and competitors.
Many times prospects may be misinformed or may not understand some of the
technical aspects of the proposition. In this case, the sales person should provide
additional information. Even the prospects objections can be met simply and effectively
by altering the product to suit the customer.
Closing
After having answered and overcome objections, it is the stage for sales person to ask
for the order from the prospects. The entire effort is wasted unless the sales person can
get the prospect to agree to buy the product. There are several closing techniques which
are being used by sales person in India. Sales person should select among these
technique one that fits the specific prospect and selling situation. Now we would
discuss few effective closing techniques. In action close technique the sales person take
an action that will complete the sale e.g. in case of high priced products like Motorcar,
photocopier or industrial product the sales person may negotiate with the financial
institution for financial assistance for the prospects.
The gift close technique provides the prospect with an added incentive for taking
immediate buying action. In one more yes close techniques, the sales persons restates
the benefits of the products in a series of questions that will result in positive responses
by the prospects. The process may result in an order. The direct close is clear and simple
technique, many sales persons feel that this is the best approach for closing, especially if
there are strong positive buying motives, the sales person will summarize the major
points that were made during presentation to the prospects prior to asking for the sale.
Experienced sales people always try to close early. If they are not successful, they
continue the presentation and then try a different closing technique. Good sales person
know that if they have successfully completed all of the earlier steps, then the prospect
is worth an extra effort at closing. In most cases this simply means switching to a
12
different type of close. Closing is the most important aspect of the sales process. Unless
the sales person can close the sale, the other steps in the sales process are meaningless.
Follow-up
The selling process is not completed by merely making the sale, as generally assumed
by many sales person. After sales activities are important part of the whole selling
process. Effective sales-follow-up reduces the buyers doubt about the product or
services and improves the chance that the person will buy again in the future. In
addition to post-sale activities, sales person are also required to maintain good
customer relations. Now-a-days many companies are evolving specific policies and
practices to ensure that customers needs are not neglected. No matter how efficient a
company is, there are always some customer complaints. The complaint should be
taken seriously and handled with concern. The customer must know that the company
cares about maintaining good customer relations. Reasonably frequent contacts with the
present customers are, an expected part of the sales persons job. For important
customers, personal visit are appropriate. Letters, notes, phone calls, greetings are also
good ways to keep in touch with customers. Many good business house also offer
customer newsletter. Successful sales person never stop serving customers. In addition
to handling complaints, they keep customer informed about the latest products or
services, fulfil reasonable request, and provide other forms of assistance. The sales
people should also appreciate the customer by thanking customers for their business.
Small gifts can be given after the sale and at appropriate times during the year. Sales
person should try to make self-analysis for evaluating their own selling performance
and methods. A Sales person should analyse every call to determine what factors
influenced its eventual outcome. Self-analysis is a very useful toolin improving overall
sales effectiveness.
information, can be easily made available. Companys Headquarters; Head Office of the
Sales Manager; or that of the Regional Manager, are ideally suitable. Adequate
arrangement should be made for the seating of the participants, and proper and
business-like atmosphere should be created.
(b) Audience: The level of intelligence of participants should be considered. This will
help in selecting and assigning the subjects for discussion, to suitable hands.
(c) Agenda: A proper Agenda should be framed, keeping in view the needs, for which
the Meeting is being held. The agenda should be made known to the participants in
advance.
(d) Periodicity: The sales meeting should have a definite periodicity. National-level
sales-meetings/conferences, are usually an annual affair. This ensures that the
participants are well prepared.
13
(e) Activities: There should be proper allocation of work, so that each participant knows
what to expect from whom. The Convener should do well to ensure a participative
atmosphere in the Meeting. A little Creativity, on his part, will go a long way, in
ensuring success of the meeting.
(5) Kerb-Side Conferences
These conferences aim at a random appraisal of the performance of a sales-man, and is
usually done on a monthly basis, taking a days work into consideration. It should be
ensured that (i) the salesman is not calling on his friendly customers on that day, and
(ii) the presence of the appraiser, does not influence the sales-persons work-pattern.
The appraiser has to watch the salesman, during the day and keep a mental note of his
strong and weak areas. After the call(s) is/are over the day, the appraiser and the
salesman deferred to a quiet place, where the work is systematically appraised; and
properly recorded and graded, on an appraisal-form. It is essential that the agreement
of the salesman be obtained to such an appraisal-form. This will put him in a proper
frame of mind, and he will be receptive to suggestions.
The sequence of this appraisal, could be like this: (i) the appraiser appreciates the skills
that have been employed; (ii) the salesman is now asked to analyse the call(s), identify
the problems not properly tackled,and reasons thereof; (iii) if the salesman fails to
identify his weak areas, even after questioning, the appraiser tells him about these, in
very clear terms; (iv) once the deficiencies have been isolated, salesmans concurrence,
on his weaknesses is obtained; (v) the appraiser, then gives instructions, on how to
overcome these weaknesses. The salesman, may in some cases be asked to rehearse
these, to reduce the element of any doubt; (vi) any follow-up action is then specifically
pointed out; (vii) before parting, the appraiser says a few words of encouragement and
concludes on a note of optimism.
Such kerb-side meetings are very useful for the purpose of increasing the productivity
of employees, but heavily depend on the ability and skills of the appraiser, to pinpoint
deficiencies and offer remedial measures. However, generalities should be avoided, as
the process is very expensive.
(6) Refresher Courses
Generally, the refresher courses are held at the companys headquarters, usually once a
year. The course-content is usually based on the feedback-information from (i)
companys activities; (ii) salesexecutives; (iii) market-intelligence; (iv) sales-
meetings/conferences etc., (v) product-development, (vi) technical areas affecting the
company etc. (since the last conference/meeting). Such courses make the sales-force
adequately prepared, periodically, to face the challenges of competition, with
confidence.
(7) Sales Bulletins
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Lastly but not least, training and development is also continued through sales bulletins.
It is a good medium to keep the salesman educated about day-to-day matters of
changes/interests. The information reaches him through the bulletins, while the
salespeople are at work, and also when it is urgently required. No time is lost in waiting
for the next sales-meeting/conference. However, the language used in he bulletins
should be crisp and to the point, so as to arouse the salesmans interest and is easily
understood by the recipient.
SALES TERRITORRIES
INTRODUCTION
No sales manager can afford to ignore the planning and
organizationof the territorial coverage. Althoughmuchhas beendone to
improve the efficiency of individual salesman, there is still much room
left for the improvement in territorial management. There are still some
sales organizations that believe that planning and organization of sales
territorieswould be too difficult to attempt, and there isnothing wrong if
salesmenjust go out and make calls. However, the sensible thing to do
isto guide the salesman sfieldactivitiesproperly, control them, andplan
themso as to achieve the sales objectives. No doubt, the establishment
and maintenance of the sales territories involves a substantial
expenditure of time and effort; but wherever sales manager have paid
attentionto its organizationand planning, they have reaped substantial
rewardsby way of decreasedselling cost andincreasedsales. Inthisway,
they have also helpedindividual salesmanto achieve greater earningsfor
himself andgreater profitsfor the company.
A sales territory comprises a group of customers or a geographical
area assigned to a salesperson. The territory may or may not have
geographical boundaries. Typically, however, asalespersonisassignedto
a geographical area containing present and potential customers.
Assigning sales territories helps the sales manager achieve a match
between sales efforts and sales opportunities. The total market of most
companies is usually too large to manage efficiently, so territories are
established to facilitate the sales manager s task of directing, evaluating,
andcontrolling the salesforce.
The emphasis in sales territory concept is upon customers and
prospects rather than only upon the area in which an individual
salespersonworks. Customers and prospects are grouped insucha way
that the salesperson serving these accounts can call on them as
conveniently andeconomically aspossible.
Operationally defined, a sales territory is a grouping of customers
and prospects assigned to an individual salesperson. Many sales
executives refer to sales territories as geographical areas. But, in
contrast, insome companies particularly inwhichtechnical selling style
is predominant, geographical considerations are ignored and sales
personnel are assigned entire classes of customers, regardless of their
locations. When sales personnel sell mainly to personal acquaintances,
as inselling property, insurance, and investment securities; little logical
base existsfor dividing the market geographically.
Small companies, and companies introducing new products
requiring the use of different marketing channels, often do not use
geographically defined territories at all, or if they do, use roughdivisions
such as entire states or census regions: In these instances, there is no
reasonto assignterritories, since existing sales coverage capabilities are
inadequate relative to salespotentials.
REASONS FOR ESTABLISHING TERRITORIES
The primary reasonfor establishing sales territories is to facilitate
the planning and controlling of the selling function. Well-designed sales
territories, however, may result in increased motivation, morale, and
interest of the sales force, improving the total sales performance. But
sales managers typically have more specific reasons for establishing
territories.
(i) To obtain thorough coverage of the market: Sales territories
help in proper market coverage. A salesperson s calling time is planned
asefficiently as possible inorder to ensure proper coverage of present as
well aspotential customers. Coverage islikely to be more thoroughwhen
eachsalespersonisassignedto aproperly designedsalesterritory rather
thanwhenall sales personnel are allowed to sell anywhere. Withproper
coverage of the territories, the company canmore closely reachthe sales
potential of itsmarkets.
(ii) To Establish Salespersons Job and Responsibilities: Sales
territorieshelpinsetting the tasksandresponsibilitiesfor the salesforce.
Salespeople have to act as business managers for their territories. They
have the responsibility of maintaining and generating sales volume in
their territories. Once all call frequencies are calculated and assigned, it
is easier to determine the total wor1doad and thento break it downinto
equal assignments among salesmen. When an equitable workload is
assigned onthe basis of call frequencies, better results are obtained. An
equitable workload assignment creates greater interest and enthusiasm
among the salesmen.
(iii) To evaluate sales performance: Sales territories help in the
evaluation of sales performance of a company. Actual performance data
can be collected, analyzed, and compared with expected performance
goals. Even present sales figures can be compared with past figures to
judge the performance over the years. Individual territory performance
can also be compared to district performance, district performance
compared to regional performance; and regional performance compared
to the performance of the entire salesforce.
(iv) To Improve Customer Relations: Properly designed sales
territories allow sales people to spend more time with present and
potential customers and less time on the road. Customer goodwill and
increased sales can be expected when customers receive regular calls.
Since the salesman s visits are decided under a call frequency schedule
programme, he comes in contract with his customers on the basis of a
regular schedule. Such regular contacts enable both the salesman and
the customer to understand each other well and get their difficulties
solvedinrespect of the supply of, anddemandfor, goods, andalso raises
the general reputationof the company whichthe salesmanrepresent.
(v) To Reduce Sales Expenses: Sales territories are designed to
avoid duplication of effort so that two or more salespersons are not
travelling in the same geographical area. This lowers selling cost and
increasescompany profits. Salesterritoriesalso result insuchbenefitsas
fewer travel milesandfewer overnight trips.
(vi) To Improve control of the sales forces: When customer calls
frequencies, routes and schedules are determined, the performance of
salesmencanbe measured. It, then, becomes difficult for a salesmanto
neglect a hard territory and only go ahead with the easiest-to- sell
accounts. Over and above this, no salesman can devote more time and
get himself lost in one territory when he is supposed to follow a pre-
established schedules and route. When all frequencies, routes and
schedules are predetermined, the work habits of salesmen, in general,
are improved, resulting inbetter control of the salesforce.
(vii) To co-ordinate selling with other marketing, functions: A well-
designed sales territory can aid management in performing other
marketing functions. Salesandcost analysescanbe done more easily on
a territory basis than for the entire market. Marketing research on a
territory basis can be used more effectively for setting quotas and
establishing sales and expense budgets. If salespeople are to aid
customers in launching advertising campaigns, distributing point of
purchase displays, or performing work related to sales promotions, the
results are usually more satisfactory when the work is assigned and
managed onaterritory-by-territory basisrather thanfor the market asa
whole.
BASES FOR TERRITORY DEVELOPMENT
The objectives & criteria for sales territory formation are directly
relatedto the basesusedincreating the territories. The actual divisionof
afirm scustomer base into individual territory canbe achievedby means
of several methods, depending onwhichof the three alternative types of
bases used. The three important bases are- geography, potential and
servicing requirements, & workload.
(a) Geography: For the establishment of territories, geographical
considerations are the most frequently used base. This base is simple,
as it tends to adopt existing geopolitical boundaries such as
states, countries, or cities. The major advantage of the geographic
approach is the ready availability of secondary data from different
sources.
(b) Potential and servicing requirements: The potential approach
refers to splitting up afirm s customer base according to sales potential.
It would seemto provide equality of opportunity and thus bring out the
best in sales people. The procedure is relatively simple. First
management has to estimate the sales potential for the entire company
andthentry to divide thispotential equally among salespersons. Assume
that a firmhas estimated its total sales potential at Rs. 10 millionfor a
givenyear. Salesmanager hasfurther determinedthat eachsalesperson
can handle a personal sales potential of Rs. 500,000. This would mean
that twenty territorieswouldbe formed, all of whichwouldhave identical
salespotential of Rs. 500,000each.
(c) Workload: The third sales territory base, workload, goes one
step further. It not only considers individual account potential &
servicing requirementsincreating territories, but also reflectsdifferences
in coverage difficulty caused by topographical features, account
locations, competitive activity & so forth. Some companies try to attain
equity by assigning finite number of accounts and establishing average
call frequencies. For instance, a firm may give every territory manager
two hundred accounts to service and prescribe an average frequency
often calls per day; This would mean that all accounts visited once
during amonth stwenty working days.
APPROACHES OF DESIGNING TERRITORIES
Three approachesmay be usedto designthe salesterritories.
The building up approach of designing territories involves
combining enough pieces of a company s overall market to create units
presenting sufficient sales challenges. To use this approach, actual &
potential customers have to be identified and their individual sales
volumes assessed. After classifying them according to desirable call
frequencies & determining how many calls asalespersoncanreasonably
be expected to make, account mixes can be created to satisfy the dual
goals of adequate consumer coverage. This method is favored by many
consumer goodsmanufacturerslooking for intensive distribution.
The breakdown approach proceeds in the opposite direction. It
starts withthe overall sales forecast for the entire company, whichis in
turn derived from a projection of the total market potential and an
estimate of the company s likely share of it. The method then sets an
average sales figure per salespersonto reachat the number of territories
to be formed using this as divisor to total market potential. Such an
approachmay prove satisfactory for industrial goodsproducer that desire
selective distribution. The method, however, suffers from a severe
conceptual paradox: Instead of viewing sales as a result of sales force
effort and thenforecasting sales accordingly, the number of members in
the sales organization is determined by the expected overall sales. This
canleadto aself-fulfilling prophecy.
The incremental approachisconceptually the most appealing. With
this approach, additional territories are created as long as the marginal
profit generated exceeds the cost of servicing them. Administrative
difficulties, however, hamper the method sapplicability since it requiresa
cost accounting systemcapable of determining sales, costs, and profits
associated withvarious levels of input. If a company candetermine this
kind of information, profits canbe maximized by increasing the number
of territoriesupto the point of negative returns.
PROCEDURE FOR SETTING UP SALES TERRITORIES
A salesterritory should not be so large that the salespersoneither
spendsanextreme amount of time travelling or hastime to call ononly a
few of the scattered customers. On the other hand, a sales territory
should not be so small that a sales person is calling on customers too
often. The sales territory should be big enoughto represent areasonable
workload for the sales force but small enoughto ensure that all potential
customerscanbe visitedasoftenasneeded.
Whether a company is setting up sales territories for the first time
or revising onesthat are already inexistence, the same general procedure
applies: (1) select a geographic control unit, (2) make an account
analysis, (3) develop a salesperson workload analysis, (4) combine
geographic control units in to territories, and (5) assign sales personnel
to territories.
1. Selectingabasic geographical control unit
The starting point interritorial planning is the selectionof a basic
geographical control unit. The most commonly used control units are
districts, pin code numbers, trading areas, cities, and states. Sales
territoriesare put together asconsolidationsof basic geographical control
units.
Management should strive for as small a control unit as possible.
There are two reasonsfor selecting asmall control unit. One reasonis to
realize an important benefit of using territories, precise geographical
identificationof salespotential. If the control unit istoo large, areaswith
low sales potential are hiddenby inclusionwithareas having highsales
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potentials, andareaswithhighsalespotentialsare obscuredby inclusion
with those having low sales potentials. The second reason is that these
units remain relatively stable and unchanging, making it possible to
redraw territorial boundarieseasily by redistributing control unitsamong
territories. If, for example, a company wants to add to Ram s territory
and reduce Sham sterritory, it iseasier to transfer city-sized rather than
state- sizedcontrol units.
Political units(state, district, or city) are presently used quite often
as geographic control units. These are commonly used because they are
the basis of a great deal of government census data and other market
information.
Counties: In the United States and U.K., the county is the most
widely used geographical control unit. County, in these countries,
typically is the smallest unit for which government sources report
statistical data. Districtsmay be usedon: similar linesinIndia.
Zip code areas: It is also used in USA. Typical Zip code area is
smaller thanthe typical county. InIndiaPin code areas may be used on
similar lines.
Cities: When a company s sales potential is located entirely or
almost entirely, inurbanized areas, the city is used as the control unit.
The city rarely is fully satisfactory as acontrol unit, suburbs adjacent to
cities possess sales potentials at least as great as those in the cities
them-selvesand, inaddition, they canoftenbe coveredby the same sales
personnel at little additional cost.
Trading areas: Another control unit used for establishing sales
territoriesisthe trading area. The trading areaisperhapsthe most logic
al control unit, since it is based mainly onthe natural flow of goods and
services rather thinonpolitical or economic boundaries. Firms that sell
throughWholesalers or retailers often use the trading area as a control
unit. The trading areaisageographical regionthat consistsof acity and
the surrounding areas that serve as the dominant retail or wholesale
center for the region. Usually, customers inone trading area will not go
outside its boundaries to buy merchandise; nor Will a customer from
outside enter the trading areato purchase aproduct. The trading areaas
ageographic control unit hasseveral advantages. Since trading areasare
based on economic considerations, they are representative of customer
buying habits and patterns of trade. Also, the use of trading areas aids
management inplanning andcontrol.
States: Many companies have used state boundaries in
establishing territory boundaries. A state may be an adequate control
unit if used by a company with a small sales force that is covering the
market selectively rather than intensively. The use of states as territory
boundaries may also work well for acompany that is seeking nationwide
distributionfor the first time. Infact, inthese situationssalespeople may
be assignedto territoriesthat consist of more thanone state. Thismay be
done on a temporary basis until the market develops, at which time a
change canbe made to a smaller control unit. State sales territories are
simple, convenient, andfairly inexpensive.
2. MakinganAccountAnalysis
After a company selects the geographic control unit, the next step
is to conduct anaudit of eachgeographic unit. The purpose of thisaudit
is to identify customers and prospects and determine how much sales
potential existsfor eachaccount.
First, accounts must be identified by name. Many sources
containing this informationare available. For example, the yellow Pages
have become computerized, and they represent one of the most effective
sources for identifying customers quickly. Other sources include
company records of past sales; trade directories; professional association
membership lists; directories of corporations; publishers of mailing lists;
trade books and periodicals; chambers of commerce; central, state, and
local governments; andpersonal observationby the salesperson.
After potential accounts are identified, the next step is to estimate
the total sales potential for all accounts ineachgeographic control unit.
The sales manager estimates the total market potential and then
determine how much of this total the company can expect to get. The
estimatedsalespotential for acompany inaparticular territory isoftena
judgmental decision. It is based onthe company s existing sales inthat
territory, the level of competition, any differential advantages enjoyed by
the company and the relationships with the existing accounts. The
Personal Computer has become a tremendous management aid in
analyzing the sales potential inaterritory. The PC canalso calculate the
estimated sales potential based on the pre-determined criteria much
faster thanthe salesmanager can.
Once the sales potential estimates have been made, the PC can
classify each account according to it s annual buying potential. One
commonly used approach is to employ an ABC classification. The
computer identifies all those accounts whose sales potential is greater
thana predetermined amount, and classifies themas anaccount. Next,
the accountsthat are consideredto be of average potential are classify as
C accounts. Finally, accounts whose potential is less than a certain
amountsare classifiedasC accounts.
3. DevelopingaSalespersonWorkloadAnalysis
A salesperson workload analysis is an estimate of the time and
effort required to cover each geographic control unit. This estimate is
based on an analysis of the number of accounts to be called on, the
frequency of the calls, the length of each call, the travel time required,
and the non-setting time. The result of the workload analysis estimate is
the establishment of asalescall patternfor eachgeographic control unit.
Several factorsaffect the number of accountsthat canbe calledon
in each geographic control unit. The most basic factor is the length of
time required to call oneachaccount. This is influenced by the number
of people to he seen during each call, the amount of account servicing
needed, and the length of the waiting time. Information about these
factors can be determined by examining company records or by talking
withsalespeople.
One factor that affects the number of accounts that canbe called
onisthe travel time betweenaccounts. Travel time will vary considerably
from one region to another, depending on factors such as available
transportation, conditions of highways, and the weather. The sales
manager seeks ways to minimize travel time and thereby to increase the
number of accountsthat canbe calledon.
The frequency of sales calls is influenced by a number of factors.
Accounts are generally grouped into several categories according to sales
potential. Group A accounts are called on most frequently, group B
accounts less frequently, and group C accounts the least of all. Other
factors that influence the call frequency are the nature of the product
and the level of competition. The level of non-selling activities influences
the time andeffort requiredto cover ageographic control unit.
4. CombiningGeographical Control Unitsinto Sales
Territories
Up to this point the sales manager has been working with the
geographic control unit selected in the first phase of the procedure for
setting up salesterritories. The unit may be astate, county, city or some
other geographical area. The sales manager is now ready to group
adjacent control unitsinto territoriesof roughly equal salespotential.
In the past the sales manager used to develop a list of tentative
territories by manually combining adjacent control units. However, this
was a long procedure that, inmost cases, resulted insplit control units
and territories with uneven sales potential. Today, computers are
handling thistaskinamuchshorter time period.
Territories with unequal sales potential are not necessarily bad.
Salespeople vary inability and experience as well as initiative, and some
can be assigned heavier workloads than others. The sales manager
should assigns the best salespeople to territories with a high sales
potential andnewer lesseffective salespeople to the secondandthird-rate
territories, Of course, some adjustment insales quotas and commission
levels may be necessary; depending on the relative sales potential of a
specific areaand the types of selling or non-selling tasks assigned to the
salesrepresentatives.
TerritoryShape
The planner now considersterritory shape. The shape of aterritory
affects both selling expenses and ease of sales coverage. In addition, if
the shape of a territory permits the salespersonto minimize time onthe
road, shape contributes to sales force morale. Three shapes are in wide
use; the wedge, the circle, hopscotch, andthe cloverleaf.
The wedge is appropriate for territories containing bothurbanand
non-urban areas. It radiates out from densely populated urban centre.
Wedges, of course, can be in many sizes. Travel time among adjoining
wedgescanbe equalizedby balancing urbanandnon-urbancalls.
The circle is appropriate when accounts and prospects are evenly
distributedthroughout the area. Circular territory involvesstarting at the
office and moving inacircle of stops until the salespersonends up back
at the office. The salespersonassigned to the circular M shaped territory
is based at some point near the center, making for greater uniformity in
frequency of calls on customers and prospects. This also makes the
salesperson nearer to more of the customers than is possible with a
wedge- shapedterritory.
The cloverleaf is desirable when accounts are located randomly
through a territory. Careful planning of call schedules results in each
cloverleaf being a week s work, making it possible for the salespersonto
be home weekends. Home base for the salesperson assigned to the
territory is near the centre. Cloverleaf territories are more common
among industrial marketers than they are among consumer marketers
and among companies cultivating the market extensively rather than
intensively.
In the case of hopscotch territory, the salesperson starts at the
farthest point from the office and makes calls on the way back to the
0ffice. The salesperson would typically go non-stop to the farthest point
inone directionand onthe way back stops at many places. Onthe next
tripthe salespersonwill go inthe next direction.
5. AssigningSalesPersonnel to Territories
When an optimal territory alignment has been devised the sales
manager is ready to assignsalespeople to territories. Salespeople vary in
physical condition, as well as ability, initiative and effectiveness. A
reasonable and desirable workload for one salesperson may overload
another andcause frustration.
Inassigning sales personnel to territories, the sales manager must
first rank the salespeople according to relative ability. Whenassessing a
salesperson relative ability, the sales manager should look at such
factors as product and industry knowledge, persuasiveness and verbal
ability. In order to judge a salesperson s effectiveness withina territory,
the sales manager must look at the salesperson s physical, social and
cultural characteristics and compare themto those of the territory. For
instance, the salespersonbornand brought up inavillage is likely to be
more effective withrural clients than with urban customers because he
or she speaksthe same language andsharesthe same value asthe rural
clients. The goal of the sales manager in matching salespeople to
territories inthis manner is to maximize the territory s sales potential by
making the salespersoncomfortable withthe territory and the customer
comfortable withthe salesperson.
REVISING SALES TERRITORIES
Two major factors may cause a firm to consider revising
establishedterritories. First, afirmjust starting inbusinessusually does
not designterritories very carefully. Often, it is unaware of the problems
inherent incovering acertainterritory, andsometimesit overestimatesor
under-estimatesthe territory ssalespotential andrequiredworkload. But
as the company grows and gains in experience, the sales manager
recognizes that some territory revision is needed. In other situations, a
well- designed territory structure may become outdated because of
changing market conditions or other factors beyond the control of
management.
With the aid of a PC, the sales manager can produce several
revised territory alignments in minutes. Without a computer this task
would consume days. Before embarking on the revision, the sales
manager should determine whether the problems with the original
alignment are due to poor territory design, market changes, or faulty
management inother areas. For example, it would be a serious mistake
for management to revise sales territories if the problems are really due
to apoor compensationplan.
Signsthatjustifyterritoryrevision
As a company grows, it usually needs a larger sales force to cover
the market adequately. If the company does not hire additional sales
personnel, the sales force will probably only skimthe territory instead of
covering it intensely. If sales potential have been estimated in an
inadequate manner, the performance of the sales force may be very
misleading.
Territories may also need revisionbecause of anoverestimationof
sales potential. For instance, a territory may be too small for a good
salesperson to earn an adequate income. Certain environment changes
couldalso warrant the revisionof asalesterritory.
Overlapping territories are another reason for revision. This
problem usually occurs when territories are split, and it can cause a
tremendous amount of friction in the salesforce. Sales people are very
reluctant to have their territories divided because that means handing
over accounts they have built up and nurtured. The mere thought that
another salespersonisreaping the benefitsof their hardworkcanleadto
much bitterness. The organization should immediately correct this
problemin a way that will benefit the existing representatives, the new
representatives, andthe company.
Territory revisions may be necessary when one salesperson jump
into another salesperson s territory in search of business. This is an
unethical practice, and it will cause problems withi n the sales force. If
territories have been designed properly, there should be no need for
jumping. Territory jumping is usually a sign that a salesperson is not
developing hisor her territory satisfactorily. However, it canalso indicate
that the sales potential due territory is greater thanthat inanother. If a
salesperson is doing a good job covering his or her market but the
contiguous market has more potential, the representative may be forced
to enter the adjacent market.
The effectsof territoryrevision
Salespersons, .like most others, dislike change. Management,
therefore, must make, a decision either to avoid territory revisions for
fear of damaging sales force morale or to revise the territories inorder to
eliminate problems. Whenaterritory isreduced, asalespersonmight face
a reductioninpotential income and the loss of key accounts that he or
she has developed over years. Both of these can result in low morale.
Therefore, before revisionsare made, salesmanager should ask the sales
force for ideasandsuggestionsthat might alleviate suchproblems.
Compensationadjustments sometimes must be made to avoid low
morale. The salespersonwhose territory isbeing reducedshouldbe taken
into confidence and told that a smaller territory can be covered more
intensively, thereby Offering a higher volume for the same travel time.
One approach to compensating the salesperson is to guarantee the
previouslevel of income.
WHY SALES TERRITORIES MAY NOT BE DEVELOPED
In spite of the stated advantages, there are disadvantages to
developing salesterritories:
Salespeople may be more motivatedif they are not restricted
by aparticular territory andcandevelopcustomerswherever
and whenever they find them. For example, in the case of
industrial products, organizations/customers are scattered
geographically and not concentrated at one place, sales
people, therefore, may be allowed to sell to any potential
customer.
The company may be too small to be concerned with
segmenting the market into salesareas.
Management may not want to take the time, or may not have
the know-how for territory development.
Personal friendship may be the basis for attracting
customers. For Example, Life insurance salespeople may first
sell policies to their family and friends and then use their
contacts.
TerritoryManagementproblems&Remedies
The table givenbelow summarizessome of the problemsof territory
management and also the remedial actions that may be taken to
overcome these problems:
Problems Remedies
Inadequate coverage Split territories
Inadequate size Enlarge territories
Revision Prepare salespeople
Shifting accounts Revise territories
Inadequate support Assist salespersons
Territory jumping Eliminate practice
Overlapping territories Minimize crossovers
Selling cost variations Review cost figures
Problems Remedies
Highturnover Rectify casual factor
SUPERVISION AND EVALUATION OF
SALES-FORCE
INTRODUCTION
Every member of an organization, either directly or indirectly,
affects sales. The ultimate success, however, depends largely on the
performance of individual salesperson. Primary job of every sales
manager is to help every sales person achieve his or her full potential.
Salesforce supervisionandevaluation, therefore, become very important.
Adoption and successful operation of appropriate control
procedures results ingreater effectiveness whichultimately shows up in
greater sales volume at more profit and less cost. Supervision and
evaluationof sales force are instruments of achieving sales control. They
are concerned with monitoring the performance and striking balance
betweenthe standardsandactual performance. Effective supervisionand
evaluationassure the attainment of objectiveswithminimumefforts.
SUPERVISION OF SALESFORCE
Management controls sales personnel through supervision.
Regardless of who does the supervising, the objective is to improve the
job performances of sales personnel. Executives supervise the sales
personnel under them. The executive with supervisory responsibilities
establishes working relations with sales personnel for purposes of
observing, evaluating, and reporting on performance; correcting
deficiencies; clarifying duties and responsibilities; providing motivation;
informing salespersonnel of changesincompany policies; andhelping to
solve business and personal problems. Clearly, sales supervision is
concerned mainly with the action phase of control- action aimed at
enhancing personnel contributionsto the achievement of objectives.
Howmuchsupervision?
It is difficult to prescribe how much supervision is enough as too
much is as bad as too little. However, there are some conditions under
whichsupervisionisneeded:
Excessive salesturnover rate.
Highturnover of clients/accounts.
Increasedcomplaintsfromcustomers.
Increase in mail orders or orders over phone without any
particular reason.
Low ratio of ordersto salescalls.
Total number of callsvery low or very high.
Increasing ratio of selling expensesto total sales.
These conditions may point towards wrong kind of supervisionas
well asto too muchor too little supervision. Whenmanagement bringsin
highly trained and self reliant people to meet the new selling challenge,
traditional supervision, and the attitude that underlines it, stifles those
whom management seeks to encourage. The type of supervision,
therefore, should be adjusted to the type of person in the selling job.
When the type of person changes, the type of supervision must also
change.
Who shouldsupervise?
Depending uponthe company anditsorganization, salesforce may
be supervised by branch or district managers, field sales executives, or
field sales supervisors. Put another way, sales supervisionmay be either
through executives as one of their job responsibilities, or through
specialists whose jobs are mainly supervising. If the sales force is small
and experienced, sales supervision is generally through the top sales
executive. Companies having decentralized sales structure normally
assignsupervisionresponsibility to branchor district managers.
Sales supervisors generally are selected from among the sales
force, but besides having the qualifications required for selling success,
they need other qualifications. They must be good teachers. They must
recognise training needs, know how to train, be patient with those who
have lessskill, andbe tactful inpointing out better waysof doing things.
Supervisors must be skilled inhandling people and be equipped to deal
with many complex situations. Beyond these supervisory duties, some
companies expect sales supervisors to sell certain accounts personally,
this being one way to motivate themto keep up to date on field selling
techniques.
Qualification of Sales Supervisors
Sales supervisors generally are selected from among the sales force, but
besides having the qualifications required for selling success, they need
other qualifications. They must be good teachers, they must recognize
training needs, know how to train, be patient with those who have less
skills, and be tactful in pointing out better ways of doing things. They must
be skilled to handle people and be equipped to deal with many complex
situations.
EVALUATION OF SALESFORCE
In general sense, the evaluation process consists of comparing
actual performance with planned performance. Evaluation implies a
process of systematically uncovering deviations between goals and
accomplishments. When weaknesses are identified, the firm will devise
andimplement corrective methodsthroughsupervisionandother control
devices. Whenstrengthsare indicated, by the discovery of deviationsina
favourable direction, management will use this informationasavaluable
aid inthe anticipating and dealing withproblems infuture periods. This
may take the form of revising performance standards and generally
reappraising present policies, procedures, marketing communication
methods, and potential opportunities for the firm. Thus, the evaluation
process aims at bothprognosis and diagnosis and is considered to be a
preventive andcurative marketing device.
Evaluation system should do three essential things for the sale
manager andsales-people:
Provide feedback to each salesperson on individual job
performance.
Help salespeople modify or change their behavior toward
effective workhabits.
Provide information to sales managers on which to base
decisionsonpromotion, transfer andsalespeople.
TIME HORIZON FOR EVALUATION
Salesevaluationnormally isof three types:
1. Short runevaluation- Inthis, performance isevaluatedover
one year and the focus is on the achievement of targets in
termsof sales.
2. Intermediate run evaluation- The performance is judged
over 2 to 4 years time period and focus is on evaluation in
terms of creating and identifying new opportunities while
adapting to competitive andenvironmental threats.
3. Long run evaluation- This is on long-termbasis and focus
on evaluation in terms of surviving in an uncertain and
increasingly competitive world.
STANDARDS OF PERFORMANCE
Performance standards are designed to measure the performance
of activities that the company considers most important. Setting
standards of performance requires consideration of the nature of the
selling job. In other words, sales job analysis is necessary to determine
job objectives, duties and responsibilities, and the like. These, in turn,
depend upon selling strategy. Setting performance standards for new-
business sales personnel requires different measures from those for
trade-selling salespersonnel.
Setting sales performance standards requires considerable market
knowledge. It is important to know the total sales potential and the
portion that each sales territory is capable of producing. Management
needs evaluations of customers and prospects from the standpoint of
potential profitability for each class and size of account. Marketing
intelligence must provide evaluations of competitions strengths,
weaknesses, practicesand policies. These itemsall bear onthe setting of
performance standards, especially quantitative standards.
QuantitativePerformanceStandards
Most companies use quantitative performance standards. The
particular combinationof standardschosenvarieswiththe company and
its marketing situation. Quantitative standards, ineffect, define boththe
nature and desired levelsof performance. Quantitative standardsprovide
descriptionsof what management expects. Eachpersononthe salesforce
should have definitions of the performance aspects being measured and
the measurement units. These definitions help sales personnel make
their activities more purposeful. Sales personnel with well-defined
objectives waste little time or effort in pursuing activities that was not
contribute to reaching those objectives.
A single quantitative standard, such as one for sales volume
attainment, provides an inadequate basis for appraising an individual s
total performance. In the past the performances of individual sales
personnel were measured solely in terms of sales volume. Today s sales
managers realize that it is possible to make unprofitable sales, and to
make sales at the expense of future sales. In some fields, for example,
industrial goods of high unit price, sales result only after extended
periods of preliminary work, and it is not only unfair but misleading to
appraise performance over short intervals solely on the basis of sales
volume.
Salespersonnel have little control over many factorsaffecting sales
volume. They should not be held accountable for uncontrollable such
as differences inthe strengthof competition, the amount of promotional
support givento the salesforce, the potential territorial salesvolume, the
relative importance of salesto national or home accounts.
Eachcompany selectsthe combinationof quantitative performance
standards that fits its marketing situation and selling objectives. If
necessary, it developsitsownunique standardsdesignedbest to serve its
objectives. The standards discussed here are representative of the many
typesinuse.
(i) SalesQuotas
A quotaisaquantitative objective expressed inabsolute termsand
assigned to a specific marketing unit. The terms may be rupees or units
of product; the marketing unit may be asalespersonor aterritory. Asthe
most widely used quantitative standards, quotas specify desired levels of
accomplishment for sales volume, gross margin, net profit, expenses,
performance of non-selling activities, or a combination of these and
similar items. When sales personnel are assigned quotas, management
is answering the important question: How much and for what period?
The assumption is that management knows which objectives, both
general and specific, are realistic and attainable. The validity of this
assumption depends upon the market knowledge management has and
utilizes in setting quotas. When sales volume quotas are based upon
sound sales forecasts, in which the probable strength of demand has
been fully considered, they are valuable performance standards. But
when sales volume quotas represent little more than guesses, or when
they have been chosen chiefly for inspirational effect, their value as
control device isdissipated.
(ii) Sellingexpense ratio
Sales manager uses this standard to control the relationof selling
expenses to sales volume. Many factors, some controllable by sales
personnel andsome not, cause selling expensesto vary withthe territory,
so target selling expense ratiosshouldbe set individually for eachperson
onthe salesforce. Selling expense ratios are determined after analysisof
expense conditions and sales volume potentials in each territory. An
attractive feature of the selling expense ratio is that the salespersoncan
affect it bothby controlling expensesandby making sales.
The selling expense ratio has several shortcomings. It does not
take into account variationsinthe profitability of different products, so a
salesperson who has a favorable selling expenses ration may be
responsible for disproportionately low profits. Then, too, thisperformance
standard may cause the salesperson to over-economize on selling
expenses to the point where sales volume suffers. Finally, in times of
declining general business, selling expense rations inhibit sales
personnel fromexerting effortsto bolster salesvolume.
Selling expense ratio standards are used more by industrial
product companies than by consumer product companies. The
explanation traces to differences in the selling job. Industrial product
firms place the greater emphasis on personal selling and entertainment
of customers; consequently their sales personnel incur higher costs for
travel andsubsistence.
(iii) Territorial netprofitor grossmarginratio
Target ratiosof net profit or grossmarginto salesfor eachterritory
focus sales personnel s attentiononthe needs for selling abalanced line
and for considering relative profitability. Managements using either ratio
as a quantitative performance standard, in effect, regard each sales
territory as a separate organizational unit that should make a profit
contribution. Sales personnel influence the net profit rations by selling
more volume and by reducing selling expenses. They may emphasize
more profitable productsanddevote more time andeffort to the accounts
andprospectsthat are potentially the most profitable. The net profit ratio
controls sales volume and expenses as well as net profit. The gross
margin ratio controls sales volume and the relative profitability of the
salesmixture, but it doesnot control the expensesof obtaining andfilling
orders.
Net profit and gross marginratios have shortcomings. Wheneither
is performance standard, sales personnel maYJ1eglect new accounts,
and over-emphasize sales of high profit or high margin products while
under-emphasizing new productsthat may be more profitable inthe long
run.
(iv) Territorial marketshare
This standard controls market share on a territory by territory
basis. Management sets target market share percentages for each
territory. Management later comparescompany salesto industry salesin
each territory and measures the effectiveness of sales personnel in
obtaining market share. Closer control over the individual salesperoJ1 s
sales mixture is obtained by setting target market share percentages for
each product and each class if customer or even for individual
customers.
(v) Salescoverage effectivenessindex
Thisstandardcontrolsthe thoroughnesswithwhichasalesperson
works in the assigned territory. The index consists of the ratio of the
number of customers to the total prospects in a territory. To apportion
the sales person s efforts more among different classifications of
prospects, individual standardsfor salescoverage effectivenessare set up
for eachclassandsize of customer.
(vi) Call frequencyratio
A call frequency ratio is calculated by dividing the number of sales
calls on a particular class of customers by the number of customers in
that class. By establishing different call frequency ratios for different
classesof customers, management directsselling effort to those accounts
most likely to produce profitable orders. Management should assure that
the interval between calls is proper, neither so short that unprofitably
small orders are secured, nor so long that sales are lost to competitors.
Sales personnel who plantheir ownroute and call schedules find target
call frequencies helpful, in as much as these standards provide
informationessential to thistype of planning.
(vii) Callsper day
In consumer product fields, where sales personnel contact large
numbersof customers, it isdesirable to set astandardfor the number of
callsper day. Otherwise, some salespersonnel make too few callsper day
andneedhelpinplanning their routes, insetting upappointmentsbefore
making callsor simply instarting their callsearly enoughinthe morning
and staying on the job late enough in the day. Other sales personnel
make too many calls per day and need training in how to service
accounts. Standards for calls per day are set individually for different
territories taking into account territorial difference as to customer
density, roadandtraffic conditionsandcompetitors practices.
(viii) Order call ratio
Thisratio measuresthe effectivenessof salespersonnel insecuring
orders. Sometimes called a batting average, it is calculated by dividing
the number of orders secured by the number of calls made. Order call
ratio standards are set for each class of account. When a salesperson s
order-call-ratio for particular class of account varies fromthe standard
then the salespersons need helping in working with that class of
accounts.
(ix) Average costper call
To emphasize the importance of making profitable calls, atarget for
average cost per call is set. Whenconsiderable variationexists incost of
calling on different sizes or classes of accounts, standards are set for
eachcategory of account.
(x) Average order size
Average order size standards control the frequency of calls on
different accounts. The usual practice is to set different standards for
different sizes and classes of customers. Using average order size
standards along with average cost per call standards, management
controls the salesperson s allocation of effort among different accounts
andincreasesorder size obtained.
(xi) Non-sellingactivities
Some companiesestablishquantitative performancesstandardsfor
such non-selling activities as obtaining dealer displays and cooperative
advertising contracts, training distributor s personnel, and goodwill calls
on distributor s customers. Whenever, non-selling activities are critical
features of sales job, appropriate standards should be set. Since
quantitative standardsfor non-selling activitiesare expressedinabsolute
terms, they are, inreality, quotas.
Qualitativeperformancecriteria
Qualitative criteria are used for appraising performance
characteristics that affect sales results, especially over the long run, but
whose degree of excellence canbe evaluatedonly subjectively. Qualitative
criteria defy exact definition. Many sales executives do not define the
desired qualitative characteristics with any exactitude; instead they
arrive at informal conclusion regarding the extend to which each sales
personpossesses them. Other executives consider the qualitative factors
fom1al1y, one method being to rate sales persoIl.l1el against a detailed
checklist of subjective factorssuchasgivenbelow:
Job Factors
Product knowledge
Customers knowledge
Competitor sknowledge
Handling salespresentations
Customer satisfaction
Time management
Personal Factors
Punctuality
General Attitude
DressandAppearance
Co-operation
Adaptability
Reliability
Communicationskills
Decision-making ability
Initiative
Executive judgement plays the major role in the qualitative
performance appraisal. Writtenjob description, up to date and accurate,
are the logical points of departure. Each firm develops its own set
qualitative criteria, based upon the job description, but the manner in
whichthese criteriaare applieddependsuponthe needsof management.
MEASURING ACTUAL PERFORMANCE
Sales management s next task is to measure actual performance.
There are two basic sources of performance information: sales and
expense records and reports of various sorts. Almost every company has
a wealth of data in its internal sales and expense records, but this
purpose.
Fieldsalesreports
The fundamental purpose of fieldsalesreportsisto provide control
information. They provide a basis for discussion with sales personnel.
They also indicate the mattersonwhichsalespersonnel needassistance.
The sales executive uses field sales reports to determine whether sales
personnel are calling onandselling to the right people, andwhether they
are making the proper number of calls. Similarly, field sales reports
assist in determining how to secure more and larger orders. Field sales
reports provide the raw materials that sales management processes to
gaininsightsongiving neededdirectionto fieldsalespersonnel.
A good field sales reporting systemassists sales personnel intheir
self-improvement programs. Recording accomplishments inwrittenform
forcesindividualsto checktheir ownwork. They become their owncritics
and self-criticism often is more valuable and more effective than that
fromheadquarters.
Purposesof fieldsalesreports
The general purpose of all field sales reports is to provide
informationfor measuring performance; many reports, however, provide
additional information. Consider the following list of purposes served by
fieldsalesreports:
1. To provide data for evaluating performance- for example,
details concerning accounts and prospects called upon,
number of calls made, orders obtained, days worked, miles
travelled, selling expenses, displays erected, cooperative
advertising arrangements made, training of distributor s
personnel, missionary work, andcallsmade withdistributors
salespersonnel.
2. To help the sales person plan the work- for example,
planning itineraries, sales approaches to use with specific
accountsandprospects.
3. To record customers suggestions and complaints and their
reactions to new products, service policies, price changes,
advertising campaigns, andso forth.
4. To gather informationoncompetitors activities- for example,
new products, market tests, changes in promotion, and
changesinpricing andcredit policy.
5. To provide informationrequested by marketing research- for
example, data on dealers sales and inventories of company
andcompetitive products.
6. To report changesinlocal businessandeconomic conditions.
7. To keep the mailing list updated for promotional and
catalogue materials.
Typesof salesforce reports
Reportsfromsalespersonnel fall into six principle groups.
1. Progress or call report: Most companies have a progress or
call report. It is prepared individually for each call or cumulatively,
covering all calls made daily or weekly. Progress reports keep
management informed of the salesperson sactivities, provide source data
on the company s relative standing with individual accounts and in
different territories, and record informationthat assists the sales person
onrevisits. Usually the call report formrecords not only calls and sales,
but more detailed data, such as the class of customer or prospect,
competitive brands handled, the strength and activities of competitors,
best time to call, andfuture promises.
2. Expense report: The purpose is to control the nature and
amount of salesperson expenses. This report also helps the salesperson
exercise self-control over expenses. The expense report reminds
salespersonthat they are under moral obligationto keepexpensesinline
with reported sales-some expense report forms require sales persons to
correlate expenseswithsales. The detailsof the report formvary withthe
planfor reimbursing expenses.
3. Sales work plan: The salesperson submits a work plan
(giving such details as accounts and prospects to be called upon,
products and other matters to be discussed, routes to be travelled, and
hotels or motels) for a future period, usually a week or a month. The
purposes are to assist the salesperson in planning and scheduling
activities and to inform management of the salesperson s whereabouts.
The work planprovidesabasisfor evaluating the salesperson sability to
planthe workandto workthe plan .
4. New-business or potential new-business report: This
report informs management of accounts recently obtained and prospects
who may become sourcesof new business. It providesdatafor evaluating
the extent and effectiveness of development work by sales personnel. A
subsidiary purpose is to remind sales personnel that management
expects themto get sales reports point the way to needed sales training,
changes in customer service policies, and product improvements. The
salespersonreports the reasons for the loss of the business; but receipt
of a lost-sales report also causes management to consider further
investigation.
5. Report of complaint and/or adjustment: This report
provides information for analysing complaints arising from a
salesperson s work, complaints by class of customer, and cost of
complaint adjustment. This assists management in detecting needed
product improvements and changes in merchandising and service
practices and policies. These data also are helpful for decisions onsales
training programs, selective selling, andproduct changes.
The optimum number of reports is the minimum necessary to
produce the desired information. Holding downthe number of reports is
important, since they are generally made out after the selling day. Report
preparation places demands on free time, and, unfortunately, the best
people often have the least time. All reports are reviewed fromtime to
time to determine whether the information is worthwhile. When a new
report is proposed, the burdenof proof of its need is uponits advocates.
Informationobtainable throughother meansat no higher cost shouldnot
be gatheredthroughfieldsalesreports.
The amount of detail required in sales reports varies fromfirmto
firm. A company withmany salespersonnel covering awide geographical
area needs more detailed reports than does a company with a few
salespeople covering a compact area. The more freedom that sales
personnel have to plan and schedule their activities, the greater should
be the detail requiredintheir reports.
EVALUATION- COMPARING ACTUAL PERFORMANCES
WITH STANDARDS
The most difficult step insalesforce control is the evaluationstep-
the comparing of actual performances withstandards. This is more than
a mechanical comparison; this step is difficult because evaluation
requires judgement. The same standards cannot be applied to all sales
personnel-there are differences in individual territories, their sales
potentials, the impact of competition and the personalities of sales
personnel andtheir costumers. It ispossible to take territorial differences
into account by setting individual performance standards for each
territory, but it is not possible to adjust fully for differences in the
personalities of the salesperson and the clientele. Furthermore,
complications often develop in relating individual performances to
standards, for example, when two or more sales persons work on the
same account or when anaccount deals both with the salespersonand
the home office.
Evaluating sales personnel requires both a comparison of
performance with quantitative standards and an appraisal against
qualitative performance criteria. Salespersonnel withpoor performances,
as gauged by quantitative standards, may be making offsetting
qualitative contributions. Individual who do not reach sales quotas or
keep to prescribed call schedules, for instance, may be building for the
future by cementing relations with distributors and dealers. Evaluating
performance of sales personnel requires judgement and deep
understanding of market factorsandconditions.
Judgement enters into the evaluation of sales personnel in still
other ways. Performance trends, as well as the current record, are
relevant- anindividual showing improvement but withstill substandard
performance needs encouragement. There isalwaysthe chance, too, that
something is wrong withastandard-whenanindividual continually fails
to reach a standard, management should investigate whether the
standardhasbeenset too high.
In comparing actual results with projected results, the general
procedure inscientific work is to set up tests that measure the variable
under observations while taking account of the effects of other variables.
Inthe evaluationof salespersonnel it isnot possible to set upsuchtests.
Each salesperson s performance results from complex interactions of
many variables, some beyond the control of either the salespersonor of
management. The time element changes and so do the sales personnel,
the customers, general business conditions, competitors activities and
other variables. However, some companies measure the impact of
particular variable on personnel performance through careful design of
experimental andcontrol groups.
TAKING ACTION- THE DYNAMIC PHASE OF EVALUATION
The evaluations, or comparisons of actual performances with
standards, andadjustedby executive judgement, point the way to needed
action. If performance and standards are in alignment may no action
needed. Otherwise the three alternativesare:
1. Adjust performance to the standards, thus increasing the
degree of attainment of objectives;
2. Revise the policy and/or plan, or the strategiesusedfor their
implementationto better for the achievement of objects;
3. Lower or raise the objectives or the standards and/criteria
used inmeasuring degree of attainment to make themmore
realistic.
Similarly actions to be takendepend onthe performance interms
of quantitative as well as quantitative evaluation. Four such situations,
asdiscussedbelow, may be anticipated:
1. Good performance in both qualitative and quantitative
evaluation- The appropriate response would be praise,
monetary rewardsandmay be promotion.
2. Good performance in quantitative but poor in qualitative
evaluation- The good quantitative result suggest performance
in terms of sales/profits and in front of customers is good.
However, poor performance on qualitative criteria warrant
advice andtraining onqualitative aspects.
3. Poor performance in quantitative but good in qualitative
evaluation- Good qualitative input is failing to be reflected in
quantitative success. The specific causes need to be
identifiedandtraining andguidance shouldbe provided.
4. Poor performance in both quantitative and qualitative
evaluation- Critical and thorough discussion is required on problem
areas. Training may be provided to improve the performance. In some
situations, punishment including dismissal isrequired.