Sales Force Management (SFM) is a sub-system of marketing management. It is
Sales Management that translates the marketing plan into marketing performance. That is why sales force management is sometimes described as the muscle behind the marketing management. Actually sales force management does much more than serving as the muscle behind marketing management. Sales managers in modern organization are required to be customer-oriented and profit-directed and perform several tasks besides setting and achieving personal selling goals of the firm. Let us understand briefly the sales force management, tasks involved in the sales force management. Sales managers in modern organization are required to be customer- oriented and profit-directed and perform several tasks besides setting and achieving personal selling goals of the firm. Recruitment and Selection of Sales Personnel Right salesmen can help company achieve marketing objectives. Recruitment and selection are two important decisions in sales force management that concern with ensuring the right type (right qualities, right qualifications, and right experience) of sales personnel. Recruitment: Recruitment means searching for prospective candidates and inspiring them to apply for the post. Recruitment ends on the last day/date of receiving applications. Salesmen can be recruited through a number of sources. Main sources, widely practiced in India, includes: 1. Advertisement 2. Other firms 3. Middlemen 4. Personal recommendations 5. Recommendation of existing staff 6. Special recruitment agencies 7. Private training institutes 8. Colleges and academic institutes, etc. Types of sources to be used for recruiting the salesmen depend on certain criteria, like type of products to be sold, types of customers to be served, paying capacity of company and type of remuneration plans, and other relevant factors. Selection: Selection means selecting the fixed number of suitable candidates from those who applied for the posts. Selection process starts as soon as recruitment ends. Recruitment considers all applications received in a due date while selection considers only the required number of most suitable candidates. There is no ideal selection process that most companies can follow. Normally, for selecting salesmen, the simple and short selection process is followed. However, some companies, when more salesmen are to be selected at time, also follow lengthy and systematic selection process. Selection process depends on types of salesmen, cost and financial position of company, time available, company’s objectives, and so forth. Steps in Selection Process: Systematic selection process consists of following steps: 1. Receiving applications 2. Screening applications 3. Preliminary interview 4. Written tests 5. Final interview 6. Medical examination 7. Final selection 8. Appointment and induction Important Conditions: At the time of final selection or appointment of salesmen, following conditions must be made clear: 1. Time to resume the duty 2. Company’ marketing objectives, policies, and strategies 3. Duties and restrictions 4. Place of work 5. Reporting system or procedure 6. Bill collecting system 7. Remuneration and incentives 8. Training and expenses 9. Other relevant conditions, if any. Motivate Sales-Force 1. Recognition and praise: Salesmen, like any other human-beings, seek recognition for their achievements and praise for the work done which they think is more than monetary gain for them. The most common complaint of sales-force is that sales managers rarely praise their work par excellence. Failure to compliment and praise is ignoring a vital need in salesman’s nature having deeper impact on sales performance. 2. Fair pay-packet: Though financial incentive is secondary to recognition and praise, it is dominant motive because, every salesman is to earn a decent living for himself and his dependents. It is but natural that he expects an assurance of the salary that is comparable with his colleagues in his own organisation and the competitive organizations with equal performance and responsibilities. Therefore, it should be attractive and assumed one. 3. Good working conditions: It is the working conditions both physical and psychological that influence his attitude towards his work and performance. Thus, a salesman looks for a territory that gives him adequate sales potential; he wants a protection against infiltration by other salesman or salesmen in his territory; he expects a fair division of compensation on all joint sales efforts.He is likely to expect an adequate and regular expense allowance, conveyance facilities or the reimbursement that effect. The other such conditions may be freedom from excessive paper work, cozy office facilities’ length of time away from home and so on. 4. Opportunity for advancement: Good many sales-people give top priority to promotion to higher ups than to the attractive salary or even the job security. By nature, an employee does not want to be tangent. It is the case with more ambitious, efficient and industrious salesmen. Any company that fails to promote or provide such an opportunity for advancement will be responsible for high sales-force turnover by depriving the basic need and creating dissatisfaction and injecting frustration. 5. Good supervision and leadership: The productivity of sales-force is dependent on the very nature of leadership provided in company from sales manager down to sales-supervisors. Every manager is a leader and not a boss. Salesman looks their superiors as outstanding in terms of industry and knowledge. Salesmen respect those who are fair and impartial, determined, keep words, and accommodate the personal dignity of salesmen; they expect that their leader should understand them, their problems and solve them. 6. Opportunity for self expression: Salesmen have their own views, attitudes, suggestions and ideas which they want to express, assert their personalities and exploit their latent talents and abilities. A salesman is sure to increase his sales efforts if he has the opportunity to assert himself, express his personality. Absence and suppression of salesman’s expression and assertion will kill his initiative, drive and enthusiasm. Management stands benefitted by such rich reserve of untapped source of new ideas of increasing sales, cutting costs and improving profitability. 7. Social acceptance: Every human-being, a social and rational animal has the strong feeling of ‘belonging’ to a group of salesmen. Naturally, salesmen desire the acceptance and goodwill of their association in business. It is the sales manager’s task to develop a sense of ‘belongingness’ in case of every salesman. He wants to have the satisfaction of being accepted as a member of sales team, sales organisation, having his active participation, voice in its affairs, cooperating in matters of mutual interest. 8. Job security: Every salesman expects that he has job security; that is, he will be able to retain his job so long as his work is quite satisfactory and the prevailing economic and social conditions permit. Job security does not mean absolute permanence of job tenure. It means protection from arbitrary discharge or dismissal or transfer. Salary is not the only factor that determines such security. He looks to future social security. When he gets old, he should have the opportunity of reasonable earnings to pull on longer with respect and dignity. 9. Desire to excel: One finds the strong urge of excelling others in performance and the achievements. It speaks of aggressiveness of many successful salesmen. Desire to excel others implies increasing sales, cutting costs, improving profitability. It is a motive that helps both the parties in that the management can prosper and that the prosperity is made to share by the sales-force. 10. Pride in selling: In addition to job security, job satisfaction is one of the strongest motives of every salesman. This job satisfaction is dependent upon pride in selling as a vocation. When one has accepted a sales career, it should not be looked down upon. The salesman should have a feeling that he is doing some worthless job to hang on or as a matter of last resort or as a means of livelihood. Therefore, the significance of selling must be emphasized in preparing and training the salesmen. They should be given an understanding that they are doing creative, gainful, socially acceptable and respected job. Compensating Sales Personnel Sales-force compensation is number one problem confronting every sales management. Compensation, here, stands for the monetary and non-monetary reward given by the firm to, its sales-force in return for the services rendered. Though, compensation stands for contractual payments, there can be non- contractual and ad-hoc payments. If sales-force recruitment and the training create and develop the manpower needs, the compensation aspect cares for its maintenance in the organisation for longer period. Significance of sound compensation: Sales-force compensation is very important because, it directly affects not only the sales costs and the profits but, more significantly, the attitude, interest and the behaviour of salesmen and the nature of their task. Perhaps, the most difficult task is how to reconcile the conflicting objectives of low sales costs and higher profits on one hand and adequate, attractive earnings with security, on the other. In that sense, no compensation plan is perfect that meets the needs of management in all respect satisfactorily and sales-force wholeheartedly. At the best, it is the compromise between the two extremes. However; we cannot underestimate a compensation plan that pays well its sales-force. In fact, the importance of paying well lies in the following points: 1. To attract best salesmen: Gifted, talented and high caliber salesmen are available only at higher rewards, both monetary and non-monetary. Pay more and get the best. In fact, cheap is costlier. Therefore, costlier is qualitative. 2. To keep sales-force contented: There is direct link between the payment made to the salesmen and their satisfaction. A person is supposed to perform his duties, look at his job well when he is contented or satisfied. Satisfaction being a state of mind depends on what he gets in monetary and non-monetary forms for his job or the efforts put in. 3. To have longing loyalty: The aim of personnel management is not just to build competent sales-force but have a pool of selected persons expected to serve life-time for the nourishment and nourishment of the selling house. Loyal and trust-worthy staff makes the organisation rich, dependable and successful. Good pay-masters can expect this. 4. To have sound employer-employee relations: Bickering, misunderstandings and drags arise mostly due to money matter partial or ill- treatment. The wheels of sales organisation must not squeak. One such wheel is sales-force that can be kept in kilt if paid well and treated well. It is the sound compensation plan that greases the squeaking wheel for frictionless working. Compensation Level: Level of sales-force compensation stands for what should be the reasonable compensation for the efforts of the sales-force. Level of compensation is significant to both the employers and the employees. It is but natural that sales-force expects higher rewards for its efforts and the management is intended to pay lesser amount. The actual level of compensation lies between what the companies intends to pay and the sales- force expects to receive. Whether the level of compensation is going to be high or low is dependent on certain factors. In practice, the actual level of compensation is the compromise of the interacting forces which are outlined below: 1. Sales competence: The compensation level is bound to be higher in case of salesmen with calibre, competence or the sales acumen. It is the sales personality experience and other attributes that decide the compensation payable. 2. Extent of advertising: Sales efforts of sales-force are geared by promotional efforts too. Naturally, higher the level of advertising in the sales organisation, lesser will be the input by the sales-force and hence, lower will be the level of compensation. 3. Degree of training: A highly trained salesman is quite capable of handling the sales job with ease, confidence and grip. However, the company has invested in him to make him worthy of the sales profession. Hence, more the training intensity, lower will be the compensation level. 4. Financial viability: It is the financial strength and viability of a sales organisation that puts limits on the levels of compensation. Normally, a company which is well to do will not hesitate to pay higher compensation than the one with moderate means. 5. Bargaining power: Leaving aside the quality, caliber of salesmen, it is the bargaining capacity that plays a decisive role in putting higher limits. Thus, stronger bargaining capacity of the salesmen fetches them higher compensation level. 6. Method of compensation: Much depends on the method of compensation plan or the method. We have pure salary and pure commission plan and the combination of the two. The commission plan and salary and commission plan normally work higher compensation level than mere salary scheme. Managing expenses of sales personnel Managing a sales force requires more than just setting quotas and tracking progress to determine success. An increase in sales isn’t necessarily a positive thing for a business if the expense to generate those sales result in a lower profit. Breaking down your sales costs, including those expenses related to your sales force, will help you set a budget, choose distribution channels and set prices. Sales Force Businesses use different types of sale forces, with individual companies relying on one or a combination. A sales force might consist of contract outbound and inbound telemarketers, in-house salespeople who sell over the phone, a contract sales firm that represents you in the field or a group of employees who travel to customers. You might use a wholesaler or distributor that gets you into brick- and-mortar retailers, catalogs or online shopping websites. Direct Expenses Direct sales force expenses include the costs of the people who sell for you. If you use contractors, these expenses might be limited to commissions. If you have in-house staff, their expenses would include salaries, commissions, bonuses, payroll taxes and benefits. You would also include the constant expenses necessary for your staff, such as phones, software, office equipment and space and computers. Indirect Expenses The support you offer your sales force might vary, resulting in indirect expenses. This can include brochures, media kits, meals and entertainment, gifts, travel, lodging, trade show and conference expenses and training. These are expenses you would not have if you did not have a sales force, but they are discretionary and not regular expenses of maintaining a sales force. In addition, handling sales in house might result in customer service costs you don’t have with a distributor or wholesaler. Expense Comparisons Knowing that using an in-house or contract sales force will result in higher sales is not enough to make the decision as to which one to use. You must calculate the total expenses associated with each type of sales force to determine your profit margins and gross profits. Taking the time to review your spending and calculating accurate sales force expenses will help you make the right determination for your business. Staff Meeting and Sales Contests Staff Meeting A staff meeting is when the members of a staff assemble together. This assembly takes place to discuss subjects which will help in the smooth functioning of the institute. Staff Meetings are particularly significant in the success of any institute. In short, these should be held at every institute so as to ensure effective operation. Need for a Staff Meeting Staff meetings are a really productive method of deciding vital things. They also help motivate the staff to do more. In addition, it is also a place where the staff exchange ideas and notions. This exchange underlines the importance of the involvement of the staff. Staff meetings are the perfect place to inform and update the staff about changes. For instance, administrators convey new goals to the staff through these meetings. They discuss the methods chosen to achieve those goals. Types of Staff Meetings There are different types of staff meetings that take place. Each holds different purposes and are held at different times. We can divide them into three types: Formal These types of meetings are planned beforehand and take place at fixed intervals. They are carried out in an organized manner. They have firm agendas and are completed within a particular time. These meetings are structured strictly to follow the time limit. For example- preparing timetables, rules, and regulations, construction of curriculum and more. Informal Informal meetings are not as rigid as formal meetings. They are more likely to happen when discussing an issue and not a whole subject. It is not necessary for the whole staff to be present. They are done in small groups as well. Time is not an issue here. For example, these usually take place to plan an official meeting. Emergency The administrators summon an emergency meeting when they face unpredicted circumstances. They are held immediately, at not much notice. These take place to tackle the situation currently at hand. For instance, when a disaster happens like a fire breakout, cases of indiscipline, a visit by a scrutinizing expert and more. Process of Staff Meeting Sometimes it happens that staff meetings fail to create an impact. They do not meet their set goals due to various reasons. That is to say, the correct process must be chosen. When a meeting will be held following the correct process, the results will be more efficient. The process includes- Preparation Before the meeting takes place, make sure to be prepared thoroughly. Always set an agenda for the meeting. Otherwise, the staff meeting will be pointless. Convey the set agenda beforehand to the members. This allows the staff members to prepare in advance. It also makes them more involved. Execution The preparation beforehand makes it easier to execute the meeting. During the meeting, it is necessary to not lose track. Keep the focus on the agenda as well as on the time. Cover up all the crucial topics. Summarize everything discussed at the end to clear any queries. Follow-up The most important part is the follow-up. Simply fixing an agenda will not do it. Following-up about the progress of the task is crucial. Remind the staff about the goals set at the meeting. This way they will be on their toes and will achieve fruitful results. Sales Contests A sales contest is a motivational program in which rewards are offered to sales people based upon their sales and/or results. There are three types: • Direct competition — the sales people compete against each other and there is one winner • Team competition — there are teams which are rewarded collectively for winning. • Goal — rewards are given for achieving goals which may be won by more than one person Sales Organization Structure Companies can have many organization structures, but the most typical sales organizational structure consists of the shareholder, board of directors, the sales supervisor, distribution manager, business manager, promoting supervisor, logistics supervisor and employees. Structure of the Sales Organisation: The following factors are to be taken into consideration while designing the structure of a sales organisation: 1. Nature of the market 2. Sales policies of the enterprise 3. Nature of the product 4. Number of products 5. Availability of financial resources 6. Level of distribution system 7. Size of the company 8. Price of the product 9. Ability of the professionals 10. Position of competitors’ Products. This following image represents a basic sales organization structure for an enterprise. Types of Sales Organization Structure Organization structures can be described viz. – formal and informal organizations, horizontal and vertical organizations, centralized and decentralized organizations, line and staff organizations. Formal organizations have rigid structures and reporting relationships which often result in poor flow of communication. Informal organizations do not have a rigid hierarchical structure, set communication channels or reporting relationships. Vertical organization structure is a traditional management structure with authority being the basis of control. They have more hierarchical levels. Horizontal organization is one in which both management levels and departmental boundaries are reduced greatly. Decentralized sales organization is one in which each division within the organization has its own sales force to sell the products of that division alone. Sales organizations can be classified into four basic types: Type # 1. Line Organizations: Line organizations are the oldest and simplest form of sales organization structure. Generally these kinds of structures are observed in smaller sales organizations who have small number of sales executives. The companies have been found to cover limited geographical areas or the sales executives are found to sell a narrow product line. The orders as such pass from top down. It is the top executives who exercise line authority and each lower level executive is supposed to report to one top boss. All managers have line authority to direct and control their subordinates. The line sales organization structures are extensively used in companies where all sales personnel report directly to the sales manager. In such companies, the top boss is occupied with the responsibility of active supervision and has very little time as such to work on plans in tandem with the other top executives in the company. 2. Line and Staff Sales Organizations: These kind of structures are generally observed in large and medium sized companies that employ large number of people as sales executives and they are found to sell diversified product lines across wide geographical areas. Specialist staff managers are available for sales managers. It is the staff manager who assists as well as advises the line managers. The difference between line organizations and line and staff organizations is that this kind of structure provides the top level executive with a group of specialists who are experts in various areas of sales and marketing like dealer and distribution relations, sales analysis, sales planning, sales promotion etc. It is these experts who help the top boss to concentrate on various planning and policy related matters and not just focus on daily discipline and control. The staff sales executives do not however have the authority to issue orders or directives. It is only after the approval of top executive that necessary recommendations made by the staff executives are executed through line organization. Some of the advantages related to line and staff organizations are better marketing decisions and superior sales performance. Specialization is another advantage of these organizations. 3. Functional Sales Organizations: These organizations are based on the principle that each individual in an organization should have as few responsibilities as possible. The principle of specialization is utilized in these cases to the fullest extent. Assignments of duty and delegation of authority are made according to function. Each functional specialist has line responsibility over sales people. These structures are used by large companies with a number of products or market segments. Irrespective of where a particular function appears in the organization, it is in the jurisdiction of the same executive. In these structures, sales people receive instructions from several executives but that is on different aspects of their job. The provision for coordinating the functional executives is made at the top of organization hierarchy. Unlike line and staff organizations, in functional organizations all specialists have some kind of line authority. As the exhibit shows, a sales people over here receives directions from a number of members who are above him in the hierarchy of the organization. 4. Horizontal Organizations: Horizontal organizations are found to remove management levels and departmental boundaries. It is generally used by firms who have partnership relationships with customers. Some of the major advantages of horizontal organizations are reduction in supervision, cutting on unnecessary tasks and costs and enhancing the efficiency to customer queries and complaints. Relationship of sales department with other department Sales and Production In the earlier times it was make and sell philosophy, the companies would make or manufacturer product and then sell it in the market. So, as we all know the seller was the king, also production unit would start their work only after orders was secured, specially in the case of a b to b scenario, where it was purely and purely that once orders was secured and half payments were accepted, only and only then would the production and operations department begin manufacturing the same. Today the times have change, today it is the sales are forecasted and production is based according to sales forecast and sales potential. So, the sales team provides inputs into production planning and unitary management. Sales team understand the product better, and when they have to explain you know the technicalities of the product during sales presentations to the their customers or to their clients when they have to explain the product technicalities to the channel partners and who will for the push it down to the end customer in the case of b to c in all these cases technical information provided by the production operation department is of immense help to the sales people. The sales team provides information to the production team or the operation team about customer needs wants preferences, customers complaints or feedback with respect to existing products and product line. So, the operations team gets an idea about what is required or if there are complaints, where are complaints, what can what can be done to minimize such complaints of such customer grievances with the product and so this gives vital clues to them for product design as well. sales department and R & D department Sales department also works and close coordination with the R and D and this is extremely important. Sales as always been regarded as a line function in the staff has been dedicated as, sales is always been considered as a line function and the sales department and the marketing department have performed the line role. The R and D has always been regarded as a staff function in most cases. However, in companies which deal with biotechnology or which deal with pharmaceutical drugs etcetera there of course, R and D also is used the role of a line function. But, in most cases the production and operations, the sales, they are regarded as the line function for an organization and the R and D is regarded as a staff function. But the role of the R and D cannot be under mind because any kind of changes which have been made through the product have to be made in the design first and this has to be done by the R and D team. Sales Department and HR department Again the HR function also in most organizations is a staff function, but the sales department needs the HR function all the time. Because the when the sales in case of sales force management whether it is to do with recruitment selection, training, motivation, compensation etcetera in all of these cases the broad structure is uniform for every employee in the organization and that is decided by the HR department. But because the sales team is different the sales job is different, certain changes are required with respect to you know job analysis, recruitment selection, training, performance, appraisal, compensations, systems etcetera. And to suit the unique nature of the sales job such changes need to be made in you know in the HR policies which are which are then more customized for the sales function only. So, while the HR policies will be uniform for everybody certain changes need to be made in the HR policies to suit the needs and interest of the people in the sales force. That is why there is always a requirement of customizing them or changing the nature of these policies as HR policies to suit the needs and wants of the sales function. The various HR policies are actually revised or redesigned to suit the sales job. Sales and Finance The sales and finance team also work together. The sales department has the finance function or the finance department by sharing a with them information with respect to sales estimates, sales potential, sales forecast, and this helps the company decide on its budget. So, the finance department helps the sales department also by giving them information about credit checks of the clients, giving them information about customer credit order to payment cycles. Sales and Accounting Sales and accounting. Now, earlier the accounting department was immensely relied upon, hugely relied upon by the sales team for several things. Like billing of customers or computation of wages and salaries for the sales team, computation of incentives for the sales team, the sales and cost analysis, also you know receivables working capital etcetera. However, with the development of the marketing information systems these activities and now taken care by the information system departments. Sale and Purchase Sales and purchase department. The sales department provides information the sales estimates, forecasting, sales forecast, sales potential and sales estimate. So, this course these estimates go to the purchase department and it assists them in procuring, stocks of raw material and other items. So, that production can go on unhampered and information about the sales department needs helps the purchase department to procure the right kind of product, in the right time at the right place and in the right quality. Organization Challenges in Sales Team Here are five specific challenges that today’s sales teams face 1. Communicating value Salespeople need to be experts at highlighting product features and benefits, but they often fail to communicate the value, which is equally, if not more, important. Here's where the sales department needs marketing’s help; salespeople need to put themselves in the position of their prospect and be able to answer their crucial questions: Why should this product or service matter? How will it help prospects do their jobs better? If salespeople can’t distill complex, competitive product and solution information into concise and articulate value propositions, they will not be effective. 2. Showing instead of telling A Chinese proverb states: “If you tell me, I will forget; If you show me, I will remember; If you involve me, I will understand.” This is especially true in the sales industry. A verbal explanation of a product or service is likely to fall on deaf ears. However, by showing and taking things one step further, where you involve a prospect, you are likely to see rates of retention and action (a sale) increase. Technological innovations, like augmented and virtual reality, for example, do just that -- these advancements are inviting a prospect to experience a product or service. Of course, visualizing a digital solution is one thing, but interacting with it to solve a real business or technical challenge is something different entirely. 3. Understanding multi-buyers’ needs Consumers, whether B2C or B2B, are the target of myriad advertisements and sales tactics. So, if you're in sales, understanding exactly who your buyers are, what their needs are and how your offering can allow you to tailor a personalized pitch to multiple buyers, all in the same room. Listing product details is never going to close the sale; rather, you need to have an authentic conversation -- listening and adjusting your pitch according to the varying decision-makers in the room. This is what communicates your value, builds your credibility and inevitably closes deals. 4. Accessing the latest technology In today's technology-driven world, there are an overwhelming number of tools to help salespeople close deals. Cloud technology, CRM systems, data analytics tools, web content management and sales software exist to make the job easier. Machine learning, artificial intelligence, content distribution systems, augmented reality and virtual reality are also out there and becoming more widespread because of their accessibility, interactivity and effectiveness. 5. Connecting on an emotional level Establishing and building emotional connections with prospects transcends traditional sales and marketing relationships. When prospects have the ability to immerse themselves in a solution and fully explore a product themselves, they develop deeper understanding and retention, creating an emotional connection. Building engaging, educational and interactive experiences has been proven to create 2x more conversations than passive content. And while enhancing conversations around specific personas falls under marketing’s purview, the ability to successfully deliver those experiences to prospects is the job of the sales team. Recent Trends in Sales Organization # Customer Relationship Management(CRM) # Team Selling Approach # Technological revolution # e-selling # Managing Multi-Channels # Sales Force Diversity # Ethical and Social Issues Customer relationship management Team Selling Approach • Used when company wants to build long term relationship with customers. • Used to sell a technically complex product/service Technological Revolution • Digital revolution & MIS increased the capabilities of consumer & organization. • To compete, the company has to adopt latest technology. E-Selling • Buying & selling online by using internet. • Promotion & selling are done through internet. • Build relationships with the target audience. Managing Multi Channels • Uses 2 or more marketing channels. • Increased market coverage. • Customized selling. Sales Force Diversity • Demographic characteristics of sales force is changing & becoming more varied. Ethical and Social Issues • Sales managers have ethical & social responsibilities. • Sales people face ethical issues such as bribery, misleading & high pressure sales tactics