Session 8

Feb 13, 2020

Expectancy
Theory
It states that, individuals will be
motivated, if they believe that :

■ There is positive correlation

between effort and
performance(Expectancy)
■ Favourable performance will result
in desirable reward(Rewards)
■ Rewards will satisfy an important
need(Valence)
 Sales
Manager
Role
■ Understand the needs of the
sales force
■ Choose motivators
■ Design motivational programs

Key Stages of Salesperson’s Career Life Cycle

and Needs
1.Exploration stage- Support, peer acceptance,
challenge
2.Establishment stage –
Autonomy,esteem,achievement,competition
3.Maintenance Stage- Security,
helping/mentoring
4.Disengagement Stage-Detachment
Theories of Motivation & Motivators
Maslow Alderfer Herzberg Motivators

Physiological and safety needs Existence Hygiene Salary

Commission/Incentives
Group Incentives
Basic Training

Encouragement and contact with

Social Needs Relationship supervisors
Sales Meetings

Esteem Needs Growth Motivators Publicising performance

Advanced Training
Special perks
Travel incentives
Participative goal-setting
Career growth opportunities

Self-actualisation Special recognition

 Key
Concerns
■ Vocational Esteem ( Liking for the
job)
■ Work Pressure
■ Organizational Culture (Is the
salesperson everyday hero?)
■ Career opportunities
Compensation

Money is the fundamental component of a motivational Plan

■ Primarily satisfies physiological and safety needs, however,

■ Higher levels of compensation could also satisfy social and esteem needs!
Financial Compensation Plans

■ Fixed Salary
■ Fixed salary + Bonus/Variable component
■ Variable Salary ( Commission based/Slab based)
Compensation Plans – Comparative Assessment

Type Advantages Disadvantages Commonly Used

Fixed Simple to administer, No incentive to Sales Trainees, Sales
enhanced loyalty, maximise Support
better control on productivity,Often not
activities based on merit
Commission Linked to results, Sales Force Real Estate, Insurance,
incentive to maximise Loyalty,Lesser control DSA’s
productivity, reduced on activities
cost in lean periods
Combination Flexibility allows Complex, may Weidely used- Most
frequent rewards for encourage crisis popular compensation
desired outcomes oriented objectives. plan
Training

Six stages of Sales Training Process

■ Assess Needs ( Observation, Survey)
■ Set Training Objectives ( That you want to measure )
■ Evaluate Training Alternatives ( who, where, how?)
■ Design Training Programs
■ Deliver
■ Follow-up and Evaluation
https://www.youtube.com/watch?v=_bnnmWYI0lM

Periodic transformation is the key!

KRC – Performance Management
Sales Force Control & Evaluation : Purpose

■ To help management achieve its objectives ( short-term and long-term)

■ To influence salespeople to work towards the firm’s objectives
■ To influence various elements of selling process
■ Key consequences - Sales force selling behavior and Sales force outcome
performance
Control and Evaluation

■ Control to
– Direct (Criteria of evaluation)
– Develop ( Salesperson’s potential, skills )
the sales force

■ Evaluation of performance

Importance
– Sales supervision
– Corrective measures
– Best practices
– Gaps in territory design/compensation
Evaluation Process

■ Establish basic policies

■ Select evaluation Measures
■ Set performance standard
■ Compare performances to standards
■ Discuss results with salespeople
 Select Evaluation Measures 1. Behavior –based measures
2. Outcome – based measures

Using Sales Performance Data for Evaluation - The Runner Company

Amit Rajiv Sangeeta
Shoes Clothing Total Shoes Clothing Total Shoes Clothing Total
Total Sales (000) in Rs 480 720 1200 220 460 680 240 280 520
Sporting goods stores 320 440 760 160 320 480 100 160 260
Shoe Shops 160 280 440 60 140 200 140 120 260
Total Calls made 700 900 1100
Sporting goods stores 300 500 500
Shoe Shops 400 400 600
Total orders taken 500 600 850
Sporting goods stores 150 450 400
Shoe shops 350 150 450

Days worked 220 240 230

Expenses 48000 40000 36000
Miles Traveled 60000 45000 35000
Total market potential(Millions) 2.00 4.00 6.00 1.20 2.40 3.60 1.20 1.20 2.40
Sporting goods stores 1.60 2.40 4.00 0.80 1.60 2.40 0.72 0.64 1.36
Shoe shops 0.40 1.60 2.00 0.40 0.80 1.20 0.48 0.56 1.04
Behavior-based Measures

Quantitative :
■ No of Calls
■ Days worked
■ Selling expenses
■ Setting up displays
■ Prospecting efforts – Telephone calls/emails

Qualitative
■ Personal effort – time management, presentation quality
■ Knowledge
■ Customer Relations
■ Attitudinal factors – Cooperative, resourceful, action with responsibility etc.
Example- A Large Sales Orgn
Key Behaviour area Level 1 Level 2 Level 3 Level 4 Level 5

Building Maintains Initiate Build rapport Build Build

relationships network contacts network networks for
and networks the future
Customer Answers Provides a Understands Long-term Contributes in
Focus customer consistent the customer focus building
enquiries service customer
focus at
organisationa
l level.
Demonstration Acts on Identifies Creates Acts for the Influences
of initiatives present opportunities opportunities longer term others to take
issues initiatives
Sales Focus Spots Pursue Creates Develop
opportunitie opportunities opportunities long-term
s sales plan
Teamwork Support Answers Participates
team promptly proactively
members
Outcome-based Measures

■ Sales Volumes
■ Sales Volumes as percentage of Quota, Market Potential
■ Orders – No. of orders, size of orders
■ Accounts – Percentage of accounts sold, New accounts added, Lost accounts
■ Credits and overdue – Financial control
Performance standards

■ Set clear expectations

■ Equitable and reasonable
Compare Performance with Standards

Interpreting Quantitative Data

■ Sales Volume and Market Share
■ No. and size of orders
■ Call rate
■ Batting Average
■ Expenses
■ Routing efficiencies

Qualitative factors:
- subjective ratings
 The Necessity Of Feedback!

■ Salespeople operate in an environment they are required to meet both performance goals and
customer expectations.
■ Managerial feedback is an important indicator of their goal achievement.
■ Manager feedback acts as a motivator. Proper feedback inspires confidence, which motivates
employees to utilize their creativity toward solving customer problems.
■ Also, feedback can positively impact how salespeople fulfill their organizational roles which is important
because of the multifaceted nature of the job.
SALES FORCE EFFECTIVENESS
Sales Force Effectiveness

??

■ Sales force - an important trustee of company’s most important asset

■ Costs a lot to firms
■ Sales forces are empowered
■ Sales force dynamics are complex and poorly understood

■ Hence….increased focus on sales force effectiveness

Different Perspectives

Sales Head – “adding value to the customer beyond the product by changing the sales process
from transactional to consultative”.

Compensation Head – “ increasing sales force morale and motivation through better
compensation programs”

Training Manager – “ increasing salesperson’s competencies through innovative training

programs”

Finance Manager – “ holding sales force cost below a benchmark percentage of sales.
Effectiveness Framework

Zoltners,Sinha and Lorimer( 2008)

■ Understand the complexities of the selling world and selling system.

■ Its integration with the rest of the organization.
■ Diagnose and address the sales force issues.
The Selling World

Partner Sales Force

The Sales System

Components Success imperatives Effectiveness Drivers

Sales Force Structure and

Roles Product Focus Definers
Market Focus
Efficiency

Salespeople Product knowledge Shapers

Market Knowledge
Selling Skills
Efficient Time Management
Values
Motivations

Activities Find Exciters

Understand Enlighteners
Target Controllers
Prioritize
Assess Needs
Develop solutions
Communicate - Present,
Listen,negotiate