Definition of Sales Management

Sales management is the attainment of

sales force goals in an effective and efficient manner through planning, staffing leading and controlling organizational resources

Word Association Test

Travel Money Personality Fast Talker Commission Aggressive Pressure Appearance Products

Objectives

Developing the strategy needed to reach the sales goals Designing and organizing sales forces across the markets Understanding the roles and activities of each sales job Planning sales efforts Examining forecasting and budgeting Staffing personnel Training the sales force Directing sales force through effective motivation, compensation and leadership Providing Leads and sales support Allocation of Scarce Resources Analyzing and evaluating sales efforts

Responsibilities of a Sales Executive

Identify potential customers from currently available

databases Identify prospective accounts Plan the sales effort Decide the selling approach Service Provider Information Gathering and reporting Skill Up gradation Administrative Responsibilities

Sales Human Resource Management

People Planning

Employment Planning

Stages in Recruitment and Selection Process

Preparation of job description and personnel

selection Identification of sources of recruitment and methods of communication Designing an effective application form and preparing a shortlist Interveiwing Supplementary selection aids

People Forecast
Sales Force Objectives, Strategic Plans,

Territorial Design Sales Force No currently Hiring, Promotions and Transfers in Quits, terminations promotions,transvers out, retirement

Job Analysis
Job Analysis refers to the formal study of jobs

to define specific roles and activities to be performed in sales positions and to determine the personal qualifications needed for the jobs

Job Specifications
Job specifications convert job descriptions into

qualifications(e.g. abilities, behaviour, educational skills) Job specifications for successful sales people: Intelligence, Mental alertness, business terms and memory recall, communication skills, numerical ability, High energy level, high self confidence, hardworking, need for material things, high perseverance, requires little supervision, competitive, cynic, emotional maturity, likable, achievement oriented

Preparation of job description and specification

Title of job

Duties and responsibilities

Reporting pattern Technical requirements Location and geo area to be covered Degree of autonomy

Recruitment of sales people

How many people to recruit?

Who does the recruiting?

Where to find recruits?

Characteristics of effective sales people

Communication skill Personality Determination Intelligence Self motivation Product knowledge Edu background Confidence Appearance Business sense Empathy Likability Self discipline Adaptability persuasiveness

Sources of recruitment
Inside the compant

Recruiment agencies
Competitors Unemployed perple Educational establishments

Communication
National press

Regional press
Trade journals Agencies Local radio Universities

Application forms
Personal

Name
Add Gender Marital status Date of birth

Application form
Edu

School
Higher edu Qualifications Specialised training Membership of professional bodies

App. form
Employment history

Companies worked in
Dates of employment Position duties and responsibilities

Other interests Sports, hobbies,memberships of clubs

Interview
Interview setting

Conducting the interview

Playback techniques Probes Silence Neutral questions Use of rewards summarising

Psychological test
Easy to cheat

Many tests measure interests than abilities

Predictors may not be much related to job

specifications
Role playing

MOTIVATION & TRAINING

Motivation Process is the relationship

between needs (deprivations) which sets drives in motion (deprivations with direction) to accomplish goals (anything which alleviates a need and reduces a drive).

Motivational Theories
Maslows Hierarchy of needs.

Basic Physiological needs Safety and security needs Belongingness and social Relations Needs Esteem Needs Self Actualisation Needs

Applications
Needs exist in the form of hierarchy

Satisfied need is not a motivator

What may act as motivator for one sales

person may not be effective with another

Herzbergs Dual Factor Theory

Hygiene factors: Factors which cause

dissatisfaction but cannot motivate. Physical working condition ,security ,salary and interpersonal relationship. Motivators: Factors which can cause positive motivation. Nature of work, recognition of achievement, responsibility exercised by the person, and the interest value of the work itself.

Vrooms Expectancy theory

Expectancy: This refers to a persons

perceived relationship between effort and performance Instrumentality: This reflects the persons perception of the relationship between performance and reward Valence: This refers to the value placed by upon a particular reward by a person

ADAMS INEQUITY THEORY

This theory emphasises that the elimination

of disincentives may be an equally powerful influence.

Likerts Sales Management Theory

Sales managers own behaviour set standards

which affect behavior of their sales people Sales meetings

Churchill ,Ford & Walker Model

Higher sales persons motivation leads to

greater effort which leads to greater motivation Convince sales people that by working more they will sell more The awards are worth the performance

Motivation in practice
Financial incentives

Sales quotas
Sales meetings Sales contests Promotions

Training
Improves job performance

Enables personnel to reach higher job

performance levels earlier Rate turnover declines Recruitment & selection costs fall Improves overall efficiency Improves relationships with existing accounts

Building sales training programmes

Define training aims Determine the training needs

Initial Continual Decide training contents Decide upon the trainer Timing the training Determine the training site Instructional methods and training aids

Training needs
Job specifications

Trainees background and experience

Sales related marketing policies Identify continuing training needs

Trainer
Top sales executive

Personnel director
Sales training director Assistant sales manager District sales manager Outside experts

Decide training content

Product data:Application ,usage, competitors

products Sales techniques Markets: customers, location, particular products in which they are interested Company Information: history, unions, competitors, image of the company, company policies, compensation incentives

Select Training Methods

Lecture, case discussions, demostrations,

role playing, conferences, discussionsgaming, on the job training, correspondence cources

Evaluation
Measure performance against standards

Compare before and after performance

Observation written test Rating trainees performance in role playing

PERSONAL SELLING
Personal selling emphasises the role of sales

person as a need identifier and a problem solver. Personal Selling is a process that involves developing personal Relationships, discovering needs, matching the appropriate products with these needs, and communicating benefits through information, reminding or persuading

Successful selling

Successful selling is associated with the following Asking Questions Providing product information Making comparison Offering evidence to support claims Acknowledging customers viewpoint Agreeing with customers perceptions Supporting the customer Releasing tension.

Product Knowledge
Becoming a Product Expert: 1. Sales Persons should be familiar with the

product development history 2. Performance Data and specifications 3. Maintenance and service contracts 4. Price and Delivery_ Quantify the solution, Handle price objections, do a cost benefit Analysis

Knowledge about the company

Company culture and organisation

Company support for the product

Know the competition

Knowledge about competitors strengths and 1.

2.
3. 4.

weaknesses Attitude towards competition As far as possible do not refer to the competition during the sales presentation Never discuss the competition without having sufficient knowledge Avoid criticizing the competition Be prepared to add value

Sources of Product Information

Product literature and other published

material Company Manuals Sales training programmes Plant Tours Customers

Customer Knowledge
Develop A customer strategy: Customer

Strategy is a carefully conceived plan that results in maximum customer responsiveness

Current trends that are influencing buyer behaviour

More customers are moving towards

premium and luxury goods Customer respect is central to success in every market Customers come from more diverse racial , cultural and ethnic background.

Influences on buyer behaviour

Needs and motives

Group Influences: Role, Reference groups,

social class Cultural Influences. Personal factors

Buying Motives
Emotional versus rational buying motives:

Emotional buying motive is one that prompts the prospect to act because of an appeal to some sentiment or passion Rational Buying Motive: A purchase based on rational buying motives is generally the result of of an objective review of available information.

Patronage Versus Product Buying Motives.

A patronage Buying motive is one that causes

the prospect to buy products from one particular business. Reasons: Superior Service Selection Competence of sales representatives

Product Buying Motives

Brand preference

Quality Preference
Price preference Design or Engineering preference

Buyer decision making process

Need recognition

Information search
Evaluation of Alternatives Selection of one alternative Purchase Post purchase satisfaction or dissatisfaction

Discovering individual customer motives

Encourage two way communication for better

understanding of buyer motives High performing salespersons bring to the sales task a genuine sensitivity for the customers needs. Every effort should be made to develop a long term relationship with the customer. Sales persons should use questions to get prospects talking about themselves and their buying needs Sales persons should learn to listen carefully.

Personal selling process

The opening

Need and problem identification

Presentation and demonstration Dealing with objections Negotiations Closing the sales Follow up

Determine the Presentation objectives

Informative presentation

Persuasive presentation
Reminder presentation

Presentation Strategy
Need Discovery

Selection of the product

Need satisfaction through informing

Persuading or reminding Sevicing the sale(build repeat business)

Sales demonstration
Determine what features to demonstrate

Determine what sales tools to use

Check sales tools Determine where and when to demostrate Determine how to involve the prospect Prepare a demostration worksheet Reherse the demo

Actions taken during the demo

Customfit the demo

Balance telling and showing

Cover one idea at a time Involve prospect Use questions to check understanding

Negotiations
Anticipate buyer concerns

Review common types of resistance

Sales Quotas
Quota refers to an expected performance

objective. Quotas are routinely assigned to sales units, such as regions and districts. Quotas are also assigned to individual sales persons

Importance of quotas
Quotas provide performance targets

Quotas provide standards

Quotas provide control Quotas provide change of direction Quotas are motivational

Type of Quotas
Sales volume quotas

Profit Quotas
Expense Quotas Activity Quotas Combination quotas

Sales Volume Quotas

Set on product lines

Individual products
Geographic areas based on how the sales

organisation is designed which would include Sales div. Sales region Sales dostricts Individual sales territories

Profit quotas
Gross margin quotas: Subtracting cost of

goods sold from sales volume Net profit quotas: subtract cost of goods sold and sales people direct selling expenses from sales volume

Expense quotas
This quota aims at controlling cost of sales

units

Activity quotas
These quotas set objectives for job related

duties useful towards reaching sales peoples performance targets. They help direct sales people towards performing important non selling activities

How Quotas are set

Quotas based on forecasts and potentials Quotas based on forecasts only Quotas based on past experience Quotas based on executive judgements Quotas set by salespeople Quotas related to compensation

Administering the quota system

Set accurate fair and attainable quotas

Securing and maintaining sales personnels

acceptance of quotas Participation by sales personnel in quota setting Keeping sales persons informed Need for continuous managerial control

Purposes of Compensation
Connect individual with Organisation

Influence work behavior

Organisational choice Influence satisfaction. Feedback on performance Reinforcement

Sales Force Compensation

Pay dissatisfaction may lead to
1. 2. 3. 4. 5. 6. 7. 8.

Poor performance Absenteeism Grievances Job dissatisfaction Increased turnover Psychological withdrawal Stress anxiety Poor mental health

Pre requisites of Performance Based pay

Sales person must perceive close relationship

between performance and pay Pay must be important to sales person Sales person must be able to perform what is necessary to achieve the pay Performance should be measurable and its evaluation must be fair

Types of compensation plans

Straight salary

Straight commission
Combination salary plans

Straight salary
Sales person is paid a specific amount at

regular intervals, weekly , semi monthly or monthly

Advantages of the straight salary plan

Provides a sense of security

Simple and economic to administer

Mangement can direct duties that may not

immediately result in sales. Less resistance to reassignments and transvers Projection of compensation expenses is possible

Disadvantages
Lack of direct monetary incentives Salary adjustments are not based on specific

performance Sales persons may do an average job Salaries are a fixed expense of the firm and cannot be adjusted for downturns in the economy Sales persons may tend to emphasise products that are easier to sell New trainees may earn as much as experienced ones do

When to use a straight salary plan

For sales persons who are into routine selling jobs (Selling milk,

bread and beverages) Sales persons who are into missionary sales or educational sales Jobs that require lengthy presales and post sales service and negotiations. Also used by firms who have dominant market share in a stable mature industry Highly defined and stable customer base Highly team oriented sales efforts Strongly centralised and closely managed sales force

Straigt commission plan

This is a complete incentive plan .If sales

persons do not sell anything they do not earn anything

Basic elements
Pay is related to a performance unit such as

rupee value of sales or a type or amount of product units sold A commission percentage rate is attached to the unit Level at which commission begin or change is established

Drawing accounts
It combines the incentive of a commission

plan with the security of fixed income.

The firm establishes a monetary account for

each sales person

Advantages
Provide maximum incentives

Sales persons feel they are in business for

themselves Selling costs are in proportion to sales made

Disadvantages
Uncertainty and insecurity Individual must have enough fuds to live on

between commissions Sales persons may dev. Little loyalty for the company. Sales persons may use high pressure techniques to close the sale. Sales persons are reluctant to switch or change territories

When to use straight commission method

Little non selling , missionary work is involved

The company cannot afford to pay a salary

and wants selling costs to be directly related to sales. Company uses independent contractors

Combination salary plans

Under a combination salary plan a proportion

of the sales persons total pay is guaranteed, and the rest is incentive pay.

Designing the plan

Determine the split between salary and

incentive: Sale sperson should be able to live on alary alone Top performers should be able to earn somewhere between 25 and 50 percent of their salary in incentives

Designing the plan

Calculation of incentive: Incentive can be

Commission: Calculated as a percentage of dollar volume or gross profit on products sold Bonus: A bonus is something given in addition to what is usually earned by the sales person. Typically it is the money earned over extended period such as one year. Types Productivity bonus and non productivity bonus

Designing the plan

Set an upper limit

Consider profitable products

Profitable products can carry a higher

commission Profitable products can be weighted Separate quotas can be set for each product line

Salary administration
Salary and commission is adjusted to cost of

living adjustments(COLA)

When to pay
Monthly

Weekly
daily yearly