Manning_11e_17

CHAPTER

17 Management of the Sales Force

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Learning Objectives • Describe how leadership skills can be applied to sales management • List and discuss the qualities of an effective sales manager • Discuss recruitment and selection of salespeople • Describe effective orientation and training practices Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Learning Objectives • Explain effective sales force motivation practices • Develop an understanding of selected compensation plans • List and discuss criteria for evaluating sales performance

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Leadership • The process of inspiring, influencing, and guiding employees to participate in a common effort • Involves a series of skills that can be acquired through study and practice • People who rise to the position of sales manager must understand the difference between leadership and management

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Sales Management • The process of planning, implementing, and controlling the personal selling function • The sales manager plans, recruits, trains, budgets, develops compensation plans, and assesses sales force productivity • Successful supervisory management personnel have certain behaviors in common Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Effective Leaders • Demonstrate the following: • Structure • Consideration • Situational leadership • Test of character

• Coaching for peak performance Samuel Palmisano, CEO of IBM Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Basic Leadership Styles

FIGURE

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Structure Evidence includes: •

Regular planning

•

Expectations clearly communicated

•

Prompt, firm decisions

•

Regular performance appraisals

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Consideration Evidence includes: •

Regular and effective communication

•

Each salesperson treated as individual

•

Reward good performance often

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Situational Leadership • Leader’s style should match situation • Develop strong ethics and character

Jaime Barauh, District Sales Manager, McKesson Pharmaceutical Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Peak Performance Coaching • Help salespeople recognize need to improve • Help develop their commitment to improve

• Document problems and explore solutions Brian Tracy’s sales training program has trained more than 1,000,000 salespeople. Completion of the program results in a designation of “Certified Sales Professional.”

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Recruitment and Selection • Determine job requirements • Search for applicants

• Select best-qualified applicant

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Determine Job Requirements • New or established territory • New or well-established product

• Work independently or closely with manager • Likelihood of travel, transfer, promotion

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Searching for Applicants • Within company • Colleges and universities

• Trade and newspaper advertising • Employment agencies/listings • Internet services/searches

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The Value of the Best Salespeople Co-CEOs Jana Machin and Julia Chavez say, “Having the best salespeople is important.” In the past year, 75 of these “best of class” have blazed their way into chains like Target, Toys R Us, Wal-Mart and others.

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Selecting Applicants Selection criteria: • Interest, enthusiasm, high motivation • Integrity

• Knowledge of business, market, consumers • Customer orientation/relationships • Psychological tests (used in conjunction)

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Orientation and Training • Provide thorough orientation before person begins work • Initiate training program to help person achieve success... tasks, execution, role • Size of firm should not dictate scope of training Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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A Framework for Training Salespeople

FIGURE 17.3

Source: H.F. (Herf) MacKenzie, Sales Management in Canada. (Toronto: Prentice Hall, 2008), p. 229

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Selling Power

Selling Power magazine has some of the best hiring and training products available to assist sales managers.

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Sales Training Program • Knowledge of product line, territory, business trends, firm’s marketing strategy • Attitudes toward the company, products, customers • Skills: applying selling principles and practices

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Sales Force Motivation • Internal motivation • Intrinsic rewards: achievement, challenge, advancement, growth, enjoyment of work

• Often have long-term positive impacts

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Sales Force Motivation • External motivation • Actions taken by firm to reward sales performance

• Sales contests, incentive plans, cash bonuses

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Effective External Rewards • Design programs that focus on several important aspects of the salesperson’s job • Evaluate incentive programs often • Avoid unrealistic goals

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Compensation Plans • Compensation practices vary • Usually combination of: • Direct compensation: salary and commissions • Indirect compensation: pension, insurance plans, vacations

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Icelandic’s Incentive

Icelandic® offers a very attractive incentive program to its distribution representatives.

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Five Compensation Plans • Straight commission • Commission plan with guaranteed salary or draw provision

• Commissions with draw or salary plus bonus • Fixed salary plus bonus • Straight salary Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Strategic Compensation Planning • Specific product movement • Percentage sales increase

• Establish new accounts • Increase sales activity

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Compensation Plan Guidelines • Define marketing objectives—plan complements objectives • Field test compensation plan • Explain plan to sales staff • Change plan as conditions warrant

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Assessing Productivity: Quantitative Criteria • Sales volume in dollars • Sales compared with last year • Volume by product or line

• Number of new accounts • Amount of new account sales • Net profit on each account • Number of customer calls made Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Assessing Productivity: Qualitative Criteria • Attitude • Product knowledge • Communication skills

• Personal experience • Customer goodwill generated • Selling skills • Initiative • Team collaboration Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Promoting Salespeople

Chally’s research suggests the decision to promote salespeople into sales management should not be taken lightly.

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Key Concept Discussion Questions • Describe how leadership skills can be applied to sales management • List and discuss the qualities of an effective sales manager • Discuss recruitment and selection of salespeople • Describe effective orientation and training practices

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Key Concept Discussion Questions • Explain effective sales force motivation practices • Develop an understanding of selected compensation plans • List and discuss criteria for evaluating sales performance

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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