Chapter 17: Management of the Sales Forces

Applying Leadership Skills

o Leadership is the process of inspiring, influencing, and guiding employees to participate
in a common effort
o Series of skills that can be acquired through study and practice
o Skills are learned and not born with

Sales Management—process of planning, implementing, and controlling the personal selling

function
o External management functions
o Requires coordination and cooperation with almost every internal department

Management Activities
Planning, recruiting, training, budgeting, assess sales force, develop pay plans
Applying Leadership Skills: leader, Coach and mentor, facilitator, goal setting, motivator,
number cruncher, communicator

 Sales managers have a dramatic influence on the sales people they supervise
 Two of the most important dimensions of leadership are: Structure and Consideration

Structure—a leadership characteristic displayed by sales managers who clearly define their own
duties and those of the sales staff, and who assume an active role in directing their
subordinates
o Set of written and unspoken policies
Behavioural evidence of structure:
1) Planning takes place on a regular basis
2) Expectations are clearly communicated
3) Decisions are made promptly and firmly
4) Performance is appraised regularly
o Too much structure can sometimes create problem—robbing time, energy, and
creativity

Consideration—a leadership dimension displayed by sales managers who have relationship with
sales people that are characterized by mutual trust, respect for the salesperson’s ides, and
consideration for their feelings

Behavioural evidence of consideration:

1) Regular and effective communication receives a high priority
2) Each salesperson is treated as an individual
3) Good performance is rewarded often
 Climate of good two-way communication usually exists

Situational Leadership
o Mastery of structure and consideration is an important first step towards achieving
success in sales management
o Situational Leadership—matching your leadership style to the particular situation that
you face with individual members of your sales force

Character—is composed of personal standard of behaviour including your honestly and integrity
Coaching

o Ability to be a good coach—to improve the attitudes and skills of others—is both rare and
important
o Coaching—is an interpersonal process between a sales manager and a salesperson in
which the manager helps the salesperson to improve performance in a specific area

Four-Step Coaching Strategy

1 Documentation of performance problems
2 Get the salesperson to recognize and agree that there is a need to improve performance
in a specific area
3 Explore solutions with the salesperson
4 Get commitment from the salesperson to take action—use a contract
 Major goal is to improve performance while enabling sales managers and salespeople to
maintain a relationship based on mutual respect and trust

Recruitment and Selection

Basic Guidelines:
o Determine actual job requirements
 o A job description should be prepared by answering a few basic questions:
1 New or established territories?
2 New or established product/service?
3 Close supervision or independent?
4 Amount of travel? Transfer? Promotion?
Success Factors: skills, knowledge, abilities, behaviours

Search out applicants from several sources

1) Candidates within the company and employee referrals
2) College and university students
3) Trade and newspaper ads
4) Employment agencies and listings
5) internet
Psychological testing to assess: self-confidence, personal diplomacy, competitiveness

Compensation Plan- pay plan for salespeople that combine of direct and indirect (vacation,
pension, insurance) monetary pay
1 Straight commission
2 Commission with a draw or guarantee
3 Commission with a draw/guarantee plus bonus
4 Fixed Salary plus Bonus
5 Straight Salary

Sales Force Motivation

Internal Motivation—intrinsic reward that occurs when a duty or task is performed
External Motivation—action taken by others that involves rewards or reinforcement that cause
the worker to behave in ways to ensure receipt of the reward
Effective Use of External Rewards
1) Focus on several important aspects of the salesperson’s job
2) Evaluate incentive program often to determine what has most impact
3) Avoid setting goals that are unrealistic

Compensation Plans—pay plans for salespeople that combines of direct and indirect (vacation,
pension, insurance) monetary pay

Strategic Compensation Planning

Compensation plans can be designed to achieve a variety of sales objectives:
o Specific product movement
o Percentage sales increase
o Establish new accounts
o Increase sales activity

Important Guidelines:
1) Sales objectives are defined in detail
 2) Plans should be field tested before implementation
3) Compensation plans should be carefully explained
4) Plans should be flexible and change with market conditions

Assessing Sales Force Productivity

Quantitative Criteria: Sales volume in dollars or units, year-over-year sales volume, sales by
product or product line, number of new accounts opened, amount of new account sales, net
profit dollars, number of customer calls
Qualitative Criteria: attitude, product knowledge, communication skills, personal appearance,
customer goodwill generated, selling skills, initiative

Summary
o Effective sales managers see a difference between management and leadership
o Being a sales manager requires specific skills
o Recruiting and selecting the right person is key
o Orientation and training of new employees provides them with the tools for success
o Motivation include both internal and external
o Compensation plans must be fair and reflect both employee and organizational goals
o Assessing productivity with a plan to improve