Management of the Sales Force
A large proportion of employees of companies are engaged in sales activities. Efficiency and effectiveness of a sales force are very strong determinants of competitiveness of a company. Managing a sales force is an intricate task because most salespeople work away from the direct supervision of their managers.
In order to achieve aggregate sales objectives, individual salespeople need to have their own sales targets, but increasingly profit targets are being used, reflecting the need to guard against sales being bought cheaply by excessive discounting. To gain commitment to targets, individual salespersons should be consulted. Sales managers can also set input objectives such as time spent developing new accounts or time spent introducing new products. They may also specify number of calls expected per day and precise customers who should be called upon.
Recruitment and Selection
High caliber salespeople should be recruited. If a company’s most successful salespeople were put in a territory by replacing the average ones, a 20% increase in sales should be expected in two years. Work practices of the company and independence are more important than earnings as the key attraction to a selling career. Sales managers need to discover the reasons why people want to become salespeople in their industry so that they can develop recruitment strategies that reflect those desires.
Recruitment process follows five stages:
Preparation of job description and personnel specifications
Top ten qualities sought in salespeople by sales managers of large companies are communication skills, personality, determination, intelligence, motivation/self motivation, product knowledge, educational background, confidence, appearance, resilience and tenacity. Research has reduced the above ten qualities to two – empathy and ego drive.
Empathy is the ability to feel problems and needs of the customer in the same way and with the same intensity that the customer does. Ego drive is the need to make a sale in a personal way i.e. the salesperson will feel miserable if he is not able to make the sale, and not merely for money. Job description will include job title, duties and responsibilities, technical requirements, geographic area to be covered and degree of autonomy given to salespeople.
Identification of source of requirement and method of communication
Sources of hiring salespeople include company personnel, recruitment agencies, educational institutes, competitors, unemployed people, other industries. Advertising is the most common method of communication. Size of advertising correlates with impact. The ad should contain a headline which attracts the attention of possible applicants.
Design of application form
It allows sales managers to check if the applicant is qualified in the light of personnel specifications. It provides a common basis for drawing up a short list of candidates, provides a foundation for interview and is a reference point for the post-interview decision making stage.
Screening and selection interview is employed. Overall objective is to form a clear and valid impression of strengths and weaknesses of each candidate. Following requirements may be used: Physical requirement (speech, appearance), attainments (educational attainment, previous sales success), personal qualities (drive, ability to communicate), disposition (maturity, sense of responsibility), interests (any interests that may have positive impact on building customer relationship).
The interview should start with easy-to-answer questions that allow the candidate to talk freely and relax. The interviewer should be courteous and appear interested in what the candidate says. Open questions like ‘can you tell about your experiences selling automobiles’, encourage interviewers to express themselves. Probes can be used to prompt further discussions. At the end of the interview the candidate should be told when a decision will be made and how it will be communicated.
Supplementary selection aids
Psychological tests should be used only when it can be validated that test scores correlate with sales success. A test that may be useful in selecting car salespersons may be useless when filing a vacancy for an aero engine sales job. Role playing is also used to gauge potential of applicants. Role playing is useful in estimating potential in making short term sales but it is unlikely to provide a reliable guide when emphasis is on building a long term relationship with customer.
Training should include product knowledge and development of selling skills. Success at selling comes when the skills are performed automatically without consciously thinking about them. A training program should include knowledge about the company, products, competitors and their products, selling procedures and techniques, work organization including report preparation and relationship management.
Training in management of long term customer relationship as well as context specific selling skills should be given. This should be followed by in-the-field training where skills can be practiced face to face with customers. The best salespeople do not always make the best sales managers as other skills like teaching and motivating others are needed.
Motivation and Compensation
Motivation is based on understanding of salespersons as individuals, their personalities and value systems. Managers should provide the enabling conditions in which salespersons motivate themselves.
Tasks of sales managers in motivating salespeople
- Get to know what each salesperson values and what each one is striving for.
- Be willing to increase responsibility of salespersons.
- Realize that training can improve motivation as well as capabilities by strengthening link between effort and performance.
- Provide targets that are believed to be attainable yet provide a challenge to salespersons.
- Link rewards to performance that the salesperson wants to improve.
- Recognize that rewards can be financial and non-financial, and both can motivate.
- Convince salespersons that they will sell more by working harder or by being trained to work smarter i.e. more efficient call planning, developing selling skills.
- Convince salespeople that rewards for better performance are worth the extra effort. Managers should give rewards that are valued and attempt to sell the worth of those rewards to salespeople.
Types of salespersons
- Some salespeople have decided the type of life they want. They try to maintain their standard of living by earning a predetermined amount of money.
- Some of them are satisfiers. They perform at a level just sufficient to keep their jobs.
- Some salespersons make trade-offs. They allocate their time based upon personally determined ratio between work and leisure that is not influenced by the prospect of higher earnings.
- Some of them are goal oriented. They prefer recognition as achievers by peers and superiors, and tend to be sales quota oriented, with money mainly serving as recognition of achievement.
- Some of them are strictly money oriented. Their aim is to maximize their earning. family relationships, and leisure may be sacrificed in pursuit of money.
Managers must categorize their salespeople before deciding their motivational and compensation plan. The first three will not be motivated by commission opportunities but the last two will be.
Three types of compensations plans
Fixed salary: Because payment is not linked to sales, salespeople ore willing to carry out such tasks as technical bock-up, completing information feedback reports and prospecting. It provides security but opportunity to increase income by increasing sales is lost. There may be perceived injustice if higher performance salespeople are not paid more than low achieving ones.
Commission only: This provides a strong incentive to sell, too strong at times leading to overbearing salespeople desperate to close the sales. There is unwillingness to take time off form direct selling tasks to attend training courses or fill in reports and there is high turnover.
Salary plus commission: A hybrid system provides some incentive to sell with an element of security. Salary makes about 70 % of the income. The system is attractive to ambitious salespeople who wish to combine a base level of income with the opportunity to earn more by greater effort and ability. This is the most commonly used method of payment. Bonuses are usually paid on achievement of some task such as achieving a sales target or opening a certain number of new accounts.
Evaluation of Salespeople
Evaluation provides information to check if targets are being achieved and provide information to guide training and motivation. By identifying strengths and weaknesses of individual salespeople, training can be focused on areas in need of development and incentives can be aimed at weak spots such as poor prospecting performance.
Quantitative measures of performance
- Output criteria: Sales revenue, profits generated, sales per active account, number of new accounts opened.
- Input criteria: Number of calls, calls per active account, calls on new account, number of prospects visited.
Quantitative measures are compared against target figures to identify strengths and weaknesses. Many of the measures are diagnostic, pointing to reasons why a target is not being reached. A poor call rate may be cause of low sales achievement. Some results will need investigation.
Qualitative measures of performance
- Sales skills: Questioning, making presentation
- Customer relationships: How much confidence do customers have in the salesperson?
- Product knowledge
- Self management: How well are calls prepared, routes organized?
- Cooperation and attitudes: To what extent does a salesperson show initiative, follow instructions?
The use of quantitative and qualitative measures should be interrelated. A poor sales per ratio will mean a close qualitative assessment of selling skills, customer relationship and product knowledge.
Evaluation and Control of Total Sales Operation
Companies need to be in control of their sales operation. Sometimes they may have to take drastic actions to ensure that sales organizations are achieving their targets. One company which suspected that its salespeople had become complacent moved every salesperson to a different territory, and sales increased.