Sales Management

Managing the sales effort n Sales management: Activities of planning, organizing, staffing, motivating compensating, and evaluating and controlling a sales force to ensure its effectiveness n Boundary-spanning role: role performed by a sales manager in linking the sales force to other elements of the organization’s internal and external environments

How Salespeople and Sales Managers Spend Their Time

n One of the sales manager’s greatest challenges n Careful selection is important for two reasons: –Substantial costs involved –Mistakes are costly and detrimental to customer relations and sales-force performance Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Making the sales effort

n Principal methods used are on-the-job training, individual instruction, in- house classes, and external seminars n Popular training techniques include instructional videotapes, lectures, roll-playing exercises, slides, films, and interactive computer programs Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

n General organizational alignment may be based on geography, products, types of customers, or some combination of these factors n National accounts organization: organizational arrangement that assigns sales teams to a firm’s largest accounts Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

Basic Approaches to Organizing the Sales Force

n Span of control: the number of sales representatives who report to the first level of sales management n Optimal span of control is affected by such factors as complexity work activities being performed, ability of the individual sales manager, degree of interdependence among individual salespersons, and the extent of training each salesperson receives Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

n Efforts to motivate salespeople usually take the form of the briefings, information sharing, and both psychological and financial encouragement Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

n Psychological encouragement includes appeals to emotional needs, recognition, and peer acceptance n Financial encouragement includes monetary rewards and fringe benefits such as club memberships and sales contest awards Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

n Commission: incentive compensation directly related to the sales or profits achieved by a salesperson n Salary: fixed compensation payments made periodically to an employee Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

Annual Pay for Sales Representatives and Sales Managers

n Sales: level of expected sales for territory, product, customer, or salesperson against which actual results are compared n Other measures such as customer satisfaction, profit contribution, share of product-category sales, and customer retention are increasingly being used Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

n Another way to categorize a salesperson’s strong points: –Task, or technical ability –Process, or sequence of work flow –Goal, or in results (output) of sales performance Compensation Evaluation and Control Recruitment and Selection Training Organization Supervision Motivation Managing the sales effort

Ethical issues in sales n Promotional activities, including personal sales, raise many ethical questions n Sales managers create and ethical sales environment by: –Promoting ethical awareness –Making sure that all employees know that the firm opposes unethical conduct –Establishing control systems to monitor ethical conduct

Ethical Dilemmas n Ethical breaches that occur between salespeople and their employers include: –Improper use of company assets and cheating –Sexual harassment –Using bribes to secure a sale n Customer demand for cash kickbacks represents another ethical dilemma

Strategic Implications –Today’s sales force is strength and through technology –However, nothing can replace the power of personal selling in generating sales and building strong, loyal customer relationships Managing the sales effort

Sales force management n Environmental pressures leading to changes sales management include: n More sophisticated buyers n Customer and supplier data linked via computerized data warehousing systems n New technology and making alternative distribution methods possible n Automatic inventory reorder processes reducing the need for personal selling n Accelerated product life cycles n Reduced customer loyalty in some markets