Sales Force Motivation & Compensation Session 6 & 7

Sanjeev Varshney

Sales Force Recruitment & Selection

Key Issues with the Recruitment of People

Identifying the manpower requirement Identifying the competencies required Identifying the right profile and establishing the right selection criteria Getting the right number Getting the right profile Induction and Socialization into the company

Process of Recruitment

Manpower planning Prepare Job Specification & Job Description Identify the selection criteria & tools to select the right people Advertise to target the right population Conduct selection process Socialisation

Manpower Planning

Current Performance

Region wise Product wise Channel/ account wise etc

Future Growth prospects and plans Inventoring Anticipating future problems Availability of Budgets What level and what profile

Tasks of a Salesman

Prospecting Targeting Communicating Selling Servicing Information Gathering & processing Allocating

Competencies of a Sales man

Definitions and explanations Competency A descriptor that connotes group of knowledge, ability and behavior that affects success on the job.

Knowledge refers to what Skill refers to knowledge of how, and the repeated application of the skill is behaviour,

The group of all three refers to competency.

Establish the Selection Criteria

Educational qualification Gender Family Background Physical experience Current Status & Life Style Personality Aptitude Skill variables

Selection Process

Attracting applications: Advertisement

Incompany Open

Campus recruitment Referral Distributor/DSA Sales force

Conduct tests/interview Right battery of tests Interview criteria Train the interviewers Group discussion Team building exercises etc.

Methods of Socialization

Induction Training

Company Policy, culture and values Skill based

Mentoring

Sales Training

Sales Training process

Assess Sales Training Needs Design & execute Sales Training Programme Evaluation of Sales Training Programme

Assessing sales Training Needs

Sales managers observation Sales force survey Customer Survey Performance testing Job description & performance evaluation Assessment Centres & Development Centres

Some popular sales training needs

Product knowledge Customer knowledge Selling skills Train the trainer Behavioral training programmes

Leadership Motivational etc.

Designing Sales Training Programs

Some of the Common objectives;

Increase sales productivity Increase sales, profit or both Improve customer relations Introduce new products, markets and promotional programs Improve sales force morale Better negotiation skills Better channel partner management Improve team work Train the trainer Class room Behavioral learning (role-plays etc) Self learning modules (online as well books, CD Rom etc.) On the job training

Common sales training methods

Evaluation of Sales Training

Reactions Learning Behaviour changes Results

Framework for Sales Training Evaluation

Outcome to Measure Reactions What to measure Training objective achieved Training worthwhile Knowledge Skills Attitude Change of behaviour Sales Profits Customer satisfaction How to measure Questionnaires Interviews Tests Interview Observation Self-assessment Company data Managerial judgement Market survey When to measure After the training

Learning

After the training tests Before-after After training, after some regular interval After training, quarterly, yearly etc.

Behaviour

Results

Reinforcement

Feedback

From the trainer From the supervisor

Regular updates Follow up Advance training programs

Exercise: Assess Training Need

S.No. Problem 1. Company is a small player in the telecom sector and wants to increase its profitability by more acquisition, retaining old customers and by selling VAS particularly Data services Company in the business of apparels is a major player and is struggling with the problem of same store growth Company in the business of providing financial and legal consultancy services is struggling with the problem of retaining customers and increasing share of wallet Kind of Training

3.

Role of a Supervisor in Development of Sales man

Assist in meeting targets Mentoring Assess the Performance gaps Provides feedback Arranges and develops developmental programs Provide on-the job training Change agent Managing conflicts

Ideal Change Management Process

Unfreezing-------- Overcoming inertia and dismantling the existing mind set When change occurs------------ there is confusion as there is no clear picture of new ways Refreezing----------------- New Mind Set is Crystallizing and therefore ones comfort level is returning

Change Management Process & leader Response

Individual Response Change Leader Response

Means of easy & effective Change 1. Need for change 2. How I can support and participate in the change 3. How I can bring about change and knowledge and skills required 4. How to sustain the change

Outright rejection

Build Awareness

Opposition

Generate interest

Exploring the opportunities

Develop Knowledge and provide ability

Ensuring Commitment

Monitor and control through continuous reinforcements

On the Job training

Role of a Coach/supervisor Describe particular selling situations Explain various techniques Approaches that might be used effectively Coach Makes actual sales call Discuss each with the trainee afterward Trainee makes sales call Followed by discussion and appraisal Amount of coaching is reduced with subsequent calls Found most suitable for: Developing trainees selling skills Answering objections Closing sales

Role of a supervisor
Most likely Others/ Outside Influence Knowledge and Skills Motivation Change Situation/ Influence Provide Training Easier to Resolve

Redesign Task

Personality

Counsel to Change Behaviour Re-evaluate Person Difficult to Resolve

Aptitude Least Likely

Exercise
Different Scenarios what is the likely performance reason, and is training the answer

Your TSI, Raghu has been facing a lot of problems at home. His wife was unwell and hospitalized and as she recovered, his son fell sick. For the last 2 months his performance has also been indifferent. The TSI, Rajiv always starts with a NO. Everytime a new suggestion is made he describes it as impractical and does not implement it. The TSI Ramesh has been facing a lot of problems from his Distributor. The Distributor is keeping very low stocks and is sometimes unable to fulfill all the orders froom the market. The TSI Rajbir has been working in the company for the last 10 years, and was very keen to get promoted. However he was not capable of becoming an ASM. He always achieves the target but was not able to implement a few key initiatives related to changes in Distributor Operations.

Compensation & Motivation of Sales Force

Motivational Theories & Sales Motivators

Maslow
Physiological & safety needs

Alderfer
Existence

Herzberg
Hygiene

Sales force Motivators

Salary Commission Group incentive Basic training Encouragement & Contact of supervisor Sales meetings

Love/Belonging needs Esteem needs

Relationship

Growth

Motivators

Publicizing comparative performance Advanced training Special prerequisites Prizes/award money Participative goal setting Oppurtunity for promotion Independent charge

Self actualization

Special recognition for outstanding performance

Job Characteristics Model of Sales Motivation

Core Job Dimensions
Skill Variety, task identity and significance Autonomy

Critical Psychological states

Experienced Meaningfulness of work Experienced responsibility of work outcomes Knowledge of results of work activity

Personal & work Outcomes

High Internal work motivation High General Job Satisfaction High growth satisfaction

Feedback

Moderating Factors individual differences

Monetary Incentives

Fixed Salary Fixed salary plus Bonus Variable salary

Commission based system Slab system

Objective of compensation components

S.No. 1 Component Salary Objective Motivate effort on non-selling activities Adjust for differences in territory potential Reward experience and competence Motivate a high level of selling effort Encourage sales success Direct effort towards Strategic objectives Provide additional rewards for top performers Encourage sales success Stimulate additional effort targeted at specific short term objectives Satisfy sales people security needs Match competitive offers

2 3

Commissions Bonuses

4 5

Sales Contests Benefits

Caselet 1
A Company is in the business of biscuits and snacks. It has a wide range of products and has been adding atleast 1-2 new products each year. However, in the process sale of its oldest and the largest selling brand xyz has stagnated. Research reports reveal that this stagnation is due to the lost interest of the sales man in the product and the pressure and incentives for every new launch. This brand of the company comprises 18% of the companies turnover and is the market leader in the category. Therefore management has fixed following incentive plan for its salesforce to boost the sale of its oldest products: For meeting the overall monthly sales targets: 0.1% of total sales made by the salesman For selling xyz brand more than the designated targets (this month targets were also fixed for this brand by taking average of the last one year): 0.2% of extra sales made for this product over and above the average Questions: 1. what do you expect would be the result of this incentive plan 2. What are the expected consequences 3. What is wrong with this incentive plan

Case Let 2

Suggest a Sales Incentive plan for Star Sky Ltd. A company in the business of selling satellite TV connections. Product is new to India. There is only one competitor in the market, Box TV operating since last 2 years. Star Sky has been launched only 6 months ago. Most of the market today is dominated by Cable people. Rates being charged vary across markets and the reception quality being given by them is bad. Product Costs has following components: Set-top box charges: Rs. 3000/Installation charges: Rs. 1000/Monthly rental: Rs 300/Immediate objective of the company is market penetration and increasing the number of such connections many fold

Non-monetary incentives

Career advancements Reward & appreciation Advanced Training & Personal Growth Extra facilities

Framework for Planning Motivational Schemes

Type of Selling

Address Vocational Esteem

Functioning of the Job

Improve work culture

Rewards from the job

Targets & Territories

Monetary Reward

Career Prospects

Proportion of Salary
S.No. 1 2 3 4 5 6 7 8 Condition Importance of Sales persons skills Reputation of sales persons company Companys reliance on advertising and other sales promotion activities Competitive advantage of product Importance of providing customer service Significance of total sales volume as a primary selling objective Incidence of technical or team selling Importance of factors beyond the control of salesperson Lower Little known little little slight greater little slight Higher Well known Much Much Considerable Lesser much considerable considerable Slight

Generalized Framework for Compensation Package

Sales Response function (product type/ market conditions Sales is an individual activity High competition Market development required No market Development required

50% fixed and 50% slab system 75% fixed and 25% bonus Fixed

25% fixed and 75% variable 50% fixed and 50% variable Fixed

Medium Competition Low Competition

Sales is a group activity

Fixed plus Fixed productivity based bonus

PLC & Compensation

Introduction: A large fixed salary plus large variable component Growth: A large fixed salary plus small variable component Maturity: A small fixed salary plus large variable component Decline: A large fixed component plus very large variable component
Discuss the Issues

Additional Issues in Managing Sales force reward system

Sales contests Equal pay Team compensation Global considerations Changing the reward system