Managing the Sales Force

Chapter-01

Objectives

Designing a Sales Force Managing the Sales Force Principles of Personal Selling

What is Personal Selling or Salesmanship?

It involves direct and personal contact of the seller or his representative with the prospective buyer. It is face to face oral communication with the potential buyers. It is the act of convincing or persuading. It is beneficial to both the sellers and the buyers .

Types of Sales representative

Order taker Deliver Missionary Solution vendor

Importance of Personal Selling

Benefits to Consumers Benefits to Businessmen Benefits to Society

The Role of the Sales Force

Represent the Company to Customers to Produce

Company Profit

Sales Force Serves as a Critical Link Between a Company and its Customers Since They:

Represent Customers to the Company to Produce

Customer Satisfaction

Essential Elements of Personal Selling

Element Element Element Element

of of of of

Persuation Creativity Education Mutual Benefits

Qualities of a Successful Salesman

Knowledge about the product Knowledge about the customers Knowledge about the techniques of selling Personal qualities

Qualities of a Successful Salesman ( cont.)

a)
b)

Personal qualities
Personality (
appearance, tastes and good habits) intelligence, presence of mind, imagination, confidence, observation, sharp memory)

Mental Qualities (

a)
b)

Social Qualities ( Co-operative, well mannered ) Character qualities ( honesty, integrity, loyalty)

When might you decide to use Personal Selling?

Concentrated Market

Few buyers High value product

Product must be customized Must demonstrate product

Designing the Sales force

Sales force objectives Sales force strategy Sales force structure Sales force size

Sales force compensation

Sales Force Objectives

My Selling Purpose Is to help people get the good feelings they want about what they bought and about themselves

Sales Force Objectives

Common objectives for salespeople

Prospecting Targeting Communicating Selling Information gathering Allocating Long-term relationship

Sales Force Strategy

Full Time Part Time Inside sales people Outside sales people

Sales Force Structures

Territorial

Product

Customer

Complexity

Sales Force Structures

Territorial/Geographical Structure: Each sales rep is assigned an exclusive territory.

Advantages:

Lowest possible costs because of lower travel time & low administration expenses Clarity in who is responsible for whom; one salesperson for one customer

Disadvantages:

Salesperson has to sell the whole product line Perhaps too much attention to easy-to-sell products

Sales Force Structures

Product Structure: Each sales rep is completely responsible for one product or product line. Product specialization is particularly warranted where the product are technically complex, highly unrelated, or very numerous. Advantages:

Better control of selling effort Salespeople start to be experts in the products and needed selling processes

Disadvantages:

High traveling costs Duplication of calls & selling effort

Sales Force Structures

Customer Structure:
Firms salesperson are often specialize along industry or customer lines. Advantages:

Better understanding of customers needs Better allocation of marketing & selling effort due to customers ranking

Disadvantages:

Higher costs related with extensive travel Duplication of calls & selling effort

Sales Force Size

Workload Approach

Classify customers by size Determine desirable call frequencies Determine total sales calls needed per year Determine average number of sales calls per sales representative per year Divide total by number per rep

MCQ
Suppose a company calls on 3,000 small accounts, 2,000 medium accounts, and 500 large accounts each year. Small accounts warrant one call every 3 months, medium accounts every 2 months, and large accounts monthly. If each sales people able to make 600 calls a year, then company wants to have no more than ______ salespeople 60 50 40 70

Sales force Size

Workload Method-Most Popular:

1.

Classification all the firms customers into categories often based on the level of sales 200 350 480 the rest of firms customer

Type A: Large in term of sales or very attractive Type B: Medium in term of sales or moderately attractive Type C: Small in term of sales but attractive Type D: neither attractive in term of sales nor at respect of profitability 2.

Determination the frequency with which type of account should be called upon & the desired length of each call 26 H 6H 2H

Type A: 26 times/year x 60 minutes = 1560 minutes = Type B: 12 times/year x 30 minutes = 360 minutes = Type C: 6 times/year x 20 minutes = 120 minutes = 3. Calculation the work load involved in covering the entire market

Type A: 200 accounts x 26 H = Type B: 350 accounts x 6 H = Type C: 480 accounts x 2 H = Total:

5200 H 2100 H 960 H 8260 H

Sales force Size

4.

Determination the time available per average salesperson by year: 1760 H/per year

40 hours/week x 44 weeks per year =

Type A: 26 times/year x 60 minutes = 1560 minutes = Type B: 12 times/year x 30 minutes = 360 minutes = Type C: 6 times/year x 20 minutes = 120 minutes = 5. Apportion of salespersons time by tasks performed

26 H 6H 2H

Selling duties = 40% = Non selling duties = 30% = Traveling = 30% = Total: =100% = 6. Calculation of the number of salespeople needed

704 H 528 H 528 H 1760 H

8260/704 = 11,73 = 12 salespeople

Sales Force Compensation

Determining general level of compensation:

It is generally agreed that companies and industries with low average levels of compensation tend to suffer high turnover rates. Therefore, it is necessary that the general level of compensation be sufficiently competitive to attract and retain competent salespeople.

The most important factors determining average level of pay for a sales force are following:
The skills, experience, and education required to do the work successfully; The level of income for comparable job in the company; The level of income for comparable jobs in the industry (that is, the competitive environment); Living costs

Sales Force Compensation

Basic compensation plan:
Straight salary: the person receives a fixed amount of money at fixed intervals, such as weekly or monthly. Straight commission: the person receives an amount that varies with results, usually sales or profits. Bonus payments: a lump sum of money or stock for some exceptional performance, such as making quota, obtaining a new customer account or selling a desired products mix. Bonuses may be paid for individual performance or group achievement. Usually companied pay bonuses annually, however there are some companies that pay incentive earnings on a semiannual, quarterly or even monthly basis.

Sales Force Compensation

Basic compensation plan:
Fringe benefits: there are a host of fringe benefits that companies may consider using to reward high-performing executives. Although most are reserved for top-level management, fringes such as a company car & stock options are frequently available to the sales force. Combination: the person receives a mix of salary, commission, and / or bonus.

Sales contests; sales force contests are short-term incentive programs that uses prizes an awards to motivate sales reps to achieve goals specified by management. Contests are a popular motivational device.

Managing the Sales force

Recruiting & selecting sales representatives Training sales representatives Supervising sales representatives Motivating sales representatives

Evaluating sales representatives

Recruiting Sales people

Recruitment is finding potential job applicants, telling them about the company, and getting them to apply. Recruiting efforts should not simply generate applicants; rather, it should finds applicants who are potentially good salespeople. The entire sales organization ultimately depends on successful recruiting approach.

Need for recruitment

To replace the vacancy created To cope up with expansion program

Recruiting Sales people

Sources of Candidates

Company sources Company salespeople Suppliers and customers Professional associations Local business and civic organizations Government agencies Armed forces Job fairs Unsolicited applicants Advertisements

Employment Agencies
Educational Institutions

Selecting Salespeople
Why selection is so important? Good selection improve sales force performance Good selection promotes cost savings Good selection eases other managerial tasks

Selecting Salespeople

General Qualities ( Health, Honesty, Imagination, Creativity) Particular Qualities ( Educational Qualifications, Past Experience) Technical Qualities

Selecting Salespeople
Sales Aptitude

Other Characteristics

Selection Process Usually Evaluates a Persons

Personality Traits

Analytical and Organizational Skills

Training Salespeople
The Average Sales Training Program lasts for Four Months and Has the Following Goals: Help Salespeople Know & Identify With the Company Learn About the Products Learn About Competitors and Customers Characteristics Learn How to Make Effective Presentations Understand Field Procedures and Responsibilities

Supervising Salespeople

Identify Customer Targets & Call Norms Develop Prospect Target Use Sales Time Efficiently

Annual Call Plan Time-and-Duty Analysis Sales Force Automation

Time and Duty Analysis Preparation

Administration

Travel

Selling
Waiting

Food & Breaks

Sales Representative Motivation

Organizational Climate Sales Quotas

Positive Incentives
Sales Meetings Sales Contests

Honors and Trips

Merchandise/ Cash

Evaluating Salespeople

Call Reports

Work Plan

Sources of Information
Annual Territory Marketing Plan

Performance Evaluation

Current-to-Past Customer Satisfaction Qualitative Evaluation

Steps in the selling Process

The Selling Process

Prospecting

Preparing

Presentation

Handling objections

Closing

Follow up

Steps in the selling Process

Step 1. Prospecting and Qualifying
Identifying and Screening For Qualified Potential Customers. Learning As Much As Possible About a Prospective Customer Before Making a Sales Call.

Step 2. Pre-approach

Step 3. Approach

Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start.
Telling the Product Story to the Buyer, and Showing the Product Benefits.

Step 4. Presentation/ Demonstration

Steps in the selling Process

Step 5. Handling Objections
Seeking Out, Clarifying, and Overcoming Customer Objections to Buying.

Step 6. Closing

Asking the Customer for the Order.

Step 7. Follow-Up

Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Review

Designing a Sales Force Managing the Sales Force Principles of Personal Selling