CHAPTER 16
SALES MANAGEMENT

The Sales Management Function
Sales management may be a firm's largest operating expense
Sales manager is the link	Between sellers and customers between sellers and management
Two sets of skills are needed	Selling Skills Management Skills
As a manager rises in the hierarchy	Less time is spent in the field with salespeople More time in spent in administration

Managing any Employees In The 21st Century Walking Salesman

Employees consider three item most important about their job

Open two way communication
Effect on personal / family life
The nature (importance) of their work

Total Quality Management (TQM) and the Sales Manger

TQM philosophy is changing many aspects of business
Many sales management methods contradict TQM
TQM uses salespeople to connect customers to the firm's internal operations.

Role of the Salesperson in TQM

Must satisfy customer
Must satisfy management

Video Conferencing
Combines voice and visuals Saves time and money
What To Do	What Not To Do
Edit information ahead of time Interact! Ask and answer questions Have Audio Backup Control noise and interruptions Practice and debug ahead of time	Have a clear, limited agenda Don't let one person dominate Body language is hard to read. Don't use it. Use it often to get comfortable with the technology

Choosing a sales manager

Promote the top-producing salesperson

Expertise in all aspects of selling
Sales ability alone is not enough.
May be unhappy and ineffective in managing other salespeople.

Lateral transfer of an effective manager from another department (e.g., finance, advertising, manufacturing)

Has the management ability
Lacks the basic sales abilities that everyone in sales needs.

Hiring someone from outside the organization

Has sales ability management ability
Unfamiliar with company policies, office practices expense account procedures and organizational goals.

From salesperson to sales manager

Activities of a sales manager

Working with sales representatives
Recruitment
Training and development
Appraisal, counseling coaching
Administration
Self management

Five characteristics that make a great leader

Provides employees with a sense of mission
Creates a challenging work environment
Gives immediate feedback
Rewards and praises to recognize
1. The individual
2. The individual as a member of a team
Develops employees talents and careers

Steps to success as a sales manager

Clarify attitudes about leadership
See yourself as
1. Production manager first
2. Personnel manager second
Pride in your team
Always do what you say
Set priorities
Continuously and consistently recruit the right kinds of people
Train continuously and consistently

Becoming A Winning Manager
Traditional Managers	Winning Managers
Resist Change Self Image:"The Boss" Make decisions alone Reluctant to share information Demands hours not achievement Neglects career planning Considers sales staff to be subordinates	Loves Change Self Image: "The Coach" Group Decision Making Shares news and information Expects results and progress Helps everyone plan career Considers staff to be a team Provides employees with a sense of mission Challenges sales team to stretch themselves Gives immediate feedback Rewards and praises individual and team performance Helps employees develop their talents and careers

SPECIFIC RESPONSIBILITIES PERFORMED

Determine Sales Force Organization

Product Organization

Expensive complex products
Expensive due to specialization

Geographic Organization

Product line must not be too complex
Territories must be properly sized

Customer Type Organization

Selected SIC Codes
Selected customers by name (without centralized buying)
Selected customer by region
National or Key Accounts (with centralized buying)

Combination Approaches

Can combine any and all of the above
Depends on need, cost, etc

Determine the Number of Salespeople Needed

Workload approach - popular

Determine the number of calls needed
Determine time needed per call
Determine total working time ( a * b)
Determine actual selling time available per salesperson
Determine number of sales people ( c /d)

Develop a Job Description

Develop
candidate
profile

Educational requirements
Experience
Job conditions
Type of customers

Information
needed
in a
job description

Job title
Relationship to management
1. Who is their boss
2. Compensation
3. Criteria for promotion
Job planning : what the salesperson is expected to learn or know
Selling activities
1. Selling techniques
2. Activity expectations
Self management

Recruit and Select Salespeople

Sources
for
Recruiting

Within the organization
Competitors
Non competing companies
Advertisements
Schools
Employment agencies

Interview
and
Selection

Application form
Reference check
Personal interview
1. Qualified?
2. Want or need the job?
3. Can we meet their expectations?
4. Can they do the job?
Testing
Physical exam

Orientation

Introductions
Policies and practices
Vertical communication
Company outside activities
Expense account

Tips for hiring right

Skip the learning curve	Hire someone with experience in the areas specific to your needs
Choose marketing skills over sales skills	Some sales experience is beneficia marketing requires different abilities and approaches than does sales
Seek out charismatic types	Leadership abilities Strong communication skills
Raid the big guns	Some of the best training grounds are in the companies such as Procter & Gamble So try to recruit their best

Determine the Compensation Plan

Straight
Commission

Achieve high volume sales
Allows salespeople to structure their own time and activities.

Straight
Salary

Gives control over salespeople's activities
May not give aggressive selling

Combination
Plans

Most Popular today
Draw vs Salary

TQM Based
Compensation

Customer Retention Bonus
Penetration of Target Accounts Bonus
Company-Wide Performance Bonus

Provide Sales Training

One on
One Sessions

Interactive Multimedia CD Sales Training

Field
Training

Video sales training

Group
Sessions

Single issue sessions

Role playing

Feedback

Supervise
and
Motivate

Receive continuous training in new product technology
Guide and direct them in goal-setting
Motivation is at the very heart of supervision
- Goal is to create a work environment within which the individuals can and do motivate themselves
- The real key is to find motivated men and women and teach them how to sell

Performance Evaluation
Quantitative
Objective and standardized Easier to use
Qualitative
Focus on Quality not quantity Often ambiguous Allows use of personal biases Should accompany quantitative measures Other requirements Standardized form Consistent over time Used for the entire sales force
Techniques for Qualitative Appraisals
Behaviorally Anchored Rating Scale(BARS)	Each point on a scale is labeled with a different description of behavior Often a dozen or more scales
Checklist Scale	More of a standardized 5 or 10 point scale Usually has more scales
MBO	Goal setting and evaluation process Mutual goals Periodic reviews Evaluation based on each goal
Effectiveness versus Efficiency
Effectiveness
Effectiveness is a function of Territory Objectives Resources allocated to that territory Salesperson's performance Measure actual sales against potential, quota or objectives
Efficiency
Profitability of a territory Time, effort and money invested to get sales Ratio analysis - various ratios are used as a measure of efficiency Expense/Volume (E/V) Profit/Volume (P/V) predicts the effects of sales on profits predicts the number of sales needed to offset rising expenses
Evaluating actual performance
When and how often?
Informal evaluations should be done frequently- daily, weekly Formal evaluations should be on a regular schedule - two months is considered optimal
Sources of Information for the Evaluation
Company Records	Sales Reports Expense Reports Activity Reports Complaint Records Call Reports
Observations	Accompany salesperson Observe phone conversation, mail, e-mail
External Sources	Customers Associations Agencies
Recommending Action Improvement
Salesperson should agree on what are reasonable improvements Step by step plan should be developed Reasonable time period should be specified
Characteristics of an Effective Evaluation Program
Motivation	Evaluation should motivate salespeople to want to improve
Participation	Evaluation should offer the sales person an opportunity to participate
Agreement	Both parties should agree on Objectives Means of getting the objectives How attainment will be measured
Commitment	Salesperson should be committed to attaining the objectives
Realism	The program should be based on realistic objectives that reflect actual territory conditions
Objectivity	The program should be centered around objective and constructive techniques and measuring tools

CHAPTER 16 SALES MANAGEMENT

CHAPTER 16
SALES MANAGEMENT