Professional Documents
Culture Documents
Module - 2: Compensating Sales Force
Module - 2: Compensating Sales Force
Compensating Sales
Force
Compensation Plans - Objectives
Balancing the needs of personnel
Secure income and security
Desire for personal recognition and status
Reinforcement for doing good work
Managing effects of time
Compensation Plans - Characteristics
Fairness to all
Flexibility
Provide incentive and motivation
Lead to direction of efforts towards company
objectives
Ease of administration and comprehension
Compensation Plans - Types
Straight Salary
Straight Commissions
Periodic monitoring
Sales contest
Planning sales contests
Evaluating sales contest
Sales Force Expenses
Expense plans
Beneficial to sales person
Beneficial to organization
Easy to administer
Easy to understand
Productivity = Output
Input
Achiever
Ego-driven
Service-oriented
Sales Motivational Mix
Sales culture
Sales training
Leadership
Basic compensation
Special financial incentives
Non financial rewards
Performance evaluation
Exploration stage
Establishment stage
Stages of Their Career
Maintenance stage
Disengagement stage
Motivating the Sales Personnel at Different
Time and Territory
Management
Time Management and Its Importance
Better market coverage
Reduce selling costs
Improved customer services
More accurate evaluation of sales force personnel
Territory Management and Its Importance
Benefits of Territory Management
Better customer coverage
Increased sales
Equitable rewards
Reduced traveling costs
Territory Design - Criteria
Sufficient potential
Reasonable size
Adequate coverage
Incremental Method
Developing territories - Procedures
Identify objectives and criteria for territory formation
Bases for developing territory
Geography
Service requirements
Potential
Workload
Assigning sales personnel territories
Operating the Territory Management System
Routing
Scheduling
Territory coverage by sales personnel
Sales Quota
Sales Quota - Meaning
Quotas are quantitative sales goals assigned to
salespeople
A standard of measurement of performance in a sales
organization
Sales Quotas - Objectives
To provide quantitative performance standard
To obtain tighter sales and expense control
To motivate desired performance
To use in connection with sales contests
Sales Quotas - Importance
Provide performance targets
Provide standards
Provide control
Provide change of direction
Tool for motivating sales people
Sales Quotas - Types
Sales volume quota
Profit quota
Expense quota
Activity quota
Characteristics of A Good Sales Quota
Fair
Challenging
Flexible
Easily understandable
Help marginal coordination
Setting Sales Quota - Methods
Quota based on sales forecast and market potential
Quota based on sales forecast alone
Quota based on past experience
Quota based on judgment
Quota based on sales force compensation
Quota set by sales force themselves
Sales Quotas - Administration
Minimizing acceptance problems
Briefing
Conference
Periodical meetings
Managing and controlling people through quota
Coaching
Non-monetary incentives
Sales Quotas - Limitations
Time consuming process
Reduce risk taking among salespersons
Sometime give birth to unethical practices
Difficulty in comprehending if complicated statistical
calculations have been used
Focusing on attaining sales volumes at the cost of
ignoring important selling activities
Estimating Market Potential &
Forecasting Sales
Analyzing Market Potential
Ability to Buy
Willingness to Buy
Sources of Data
Primary data sources
Secondary data sources
Sales Forecasting Method
Qualitative Methods
User Expectations
Sales Force Composite
Jury of Executive Opinion
Delphi Technique
Market Test
Sales Forecasting Method
Quantitative Methods
Time Series Analysis
Moving Average
Exponential Smoothing
Regression and Correlation Analysis
Multiple Regression Model
Selecting a Forecasting Method
Accuracy
Cost
Types of Data Available
Requirements of the Software
Experience of the Company
Criteria for Effective Forecasting
Accuracy
Plausibility
Durability
Flexibility
Availability of Statistical Indexes
Organizational Participation
Demand patterns in the Market for the Product
Difficulties Associated with Forecasting
Lack of Adequate Sales History
Lack of Time, Money and Qualified Personnel
Changing Customer Attitude
Fashions and Fads
Evaluating Sales Force
Performance
Determinants of Sales Force
Performance
Internal Factors
Motivation
Skill Level
Job Satisfaction
Role Perception
Personal Factors
Ego Derive
Empathy
Determinants of Sales Force
Performance
External Factors
Environmental Factors
Organizational Factors
Sales Management Function
Performance Evaluation
Sales Force Evaluation Process