• It is one of the most challenging and important responsibilities / activities of sales management • Salesforce Staffing Process includes following stages: • Planning • Recruiting • Selecting • Hiring • Socialisation
• We shall briefly discuss each of the above stages
Planning Stage • It consists of three steps: • Establish responsibility for staffing process • Decide number of salespeople needed • Outline the type of salespeople needed • Establish responsibility for staffing process • Company management decides responsibilities for various stages / activities of staffing process • Generally in a medium / large size company, middle and senior levels H.R. and sales managers are responsible • Proper coordination needed between sales, marketing, and HR executives
Planning Stage (Continued) Decide the number of salespeople needed
• Steps followed by each territory sales manager to plan requirement of sales people: 1) Decide optimum salesforce size (using methods discussed earlier) 2) Add number of promotions, retirements, transfers out, terminations, resignations expected from existing salespeople 3) Subtract expected transfers into the territory and existing salesforce 4) Make a total of new salespersons needed Territory sales managers submit their requirements to national / general sales manager, who calculates the total number of new salespersons to be hired
Outline Type of Salespeople Needed
The steps involved in the process are: • Conducting a job analysis • Preparing a job description • Developing job qualifications / specifications
Conducting a Job Analysis
• It is done by a person from sales / H. R. department, or a consultant. It consists of two tasks: (1) Analyse environment in which the salesperson would work – E.G. nature of customers, competitors, products. (2) Determine duties and responsibilities of the salesperson. Obtain information from sales managers, customers, etc.
training. location and geographic area to be covered
.Preparing a Job Description
• It is a written document developed from the job analysis • The detailed job description is a useful tool for recruiting. and evaluating salespeople • Some of the points it generally covers are: • Job title. types of products / services sold. duties and responsibilities. selecting. compensating. types of customers. reporting relationship.
sales experience. skills. and personality traits • Many studies done.• These are generally based on job description
Developing Job Qualifications / Specifications
• Job specifications / qualifications include education. Useful for a new company • Analyse personal histories of salespersons • Ask customers
. due to many types of sales jobs • Some methods used for developing job specifications are as under: • Study job description. but no generally accepted job qualifications for selecting salespeople.
• Recruiting include activities to get individuals who will apply for the job • The general purpose of recruitment is to get enough qualified candidates. to enable company select the right persons • H. and sales managers must update information on government employment regulations
• Recruiting stage / process includes following activities:
Finding the sources of sales recruits
• Evaluating and selecting recruiting sources
• Contacting candidates through the selected source
firms use internal and external sources.Finding the Sources of Sales Recruits
• For identifying prospective candidates. They include: Internal Sources External Sources
• Employee referral programmes • Current employees • Promotions and transfers
• Advertisements in newspapers and journals / magazines • The Internet (job sites) • Educational institutions • Employment agencies • Job fairs • Other companies
Evaluating and selecting Recruiting Sources
• Recruiting sources are evaluated based on the database built over number of years • Evaluating factors are: • Performance rating of salespeople. after 2 years working • Percentage of salespeople retained. R. selection depends on cost • Contacting candidates through the selected source is done by H. after 2 years working • Total cost of recruiting • Selecting most effective source of recruiting at least cost • For a new company. department
depending on expenditure budget and time available • Major selection tools / steps are: • Screening resumes • Application blank • Initial interview • Intensive interview • Testing • Reference check • Physical examination
• Selection process consists of seven major selection steps / tools • Companies differ in using selection tools.
• It is done when the company receives many resumes • This step / tool not required. it is a methodical way of collecting relevant information from the applicant • Advantages of using application blank (also called “formal application form”) are: (1) Easy comparison of many applicants (2) Useful for asking question during interview sessions
. if somebody else like employment agency does initial screening • Initial screening of resumes are done by comparing with job specifications
• Widely used.
• • • • Widely used selection tool A good predictor of the candidate’s performance Initial interviews are used for screening candidates Intensive interviews are conducted to get indepth view of candidates • Interview structure / type of interviews: • Structured / patterned / guided interviews • Unstructured / non-directed / informal interviews • Semi-structured interviews • Behaviour and performance based interviews • Stress interviews • Purpose is to decide a candidate’s fitness for a job
markets. selfconfidence • Tests must have reliability and validity • Tests should be one of the selection tools and not the only tool
. IBM • Purpose of testing: To find whether applicants have traits / characteristics that lead to success in sales job • Type of selection tests: • Aptitude tests measure ability for selling and learning • Intelligence tests find out mental intelligence or intelligence quotient (IQ) • Interest tests find out level of interest in a sales career • Knowledge tests measure knowledge of products. etc • Personality tests find out attitude or traits like empathy.Testing
• Many firms use tests as a selection tool – EG P&G.
or personal visits • Instead of candidate’s references. telephones. previous employers / customers to be included for reference checks
• Objective is to find a physical problem that may prevent job performance of an applicant • Most companies want their prospective employees to undergo physical examination • Increasing number of firms ask applicant to complete the health information form without seeing a medical doctor
• They are important due to possibilities of resume frauds and false personal information • They are done by letters / e-mails.
After selection. lessons plans. other teaching devices.Training of sales personnel
• It is essential to make them skilled. personnel should be given formal training which includes planned programmes.
. visual aids.
two activities are performed: (1) The company making the job offer (2) Persuading the applicant to accept it
• It is the process through which new salespeople learn values. in order to retain new salespeople
. and behaviour of people working in the firm • Socialisation process starts before the new salesperson accepts the job offer and continues until the person is assimilated into the company culture • Assimilation is the second stage of socialisation process • Companies have this process. a list of candidates to be hired is made • In hiring stage.Hiring Stage
• After completing selection process. norms. attitudes.
• Proper training can prepare salespeople to meet with customer expectations • New salespeople spend a few weeks to several months in training • Companies view sales training important for protecting their investments in their salesforce • Sales Training Process consists of: • Assessing sales training needs • Designing and executing sales training programs • Evaluating and reinforcing sales training programs
and • Experienced / existing salespeople • Methods used for assessing training needs are: • First level sales managers’ observation • Survey of salesforce and field sales managers • Customer survey • Performance testing of salespersons • Job description statements • Salesforce audit (as a part of marketing audit)
.Assessing Sales Training needs
• Sales training needs are assessed both for • Newly hired sales trainees.
Designing and Executing Sales Training Programme
• For this. sales manager takes five decisions. Execution. Evaluation • First three words and organisational decisions relate to designing of sales training • Examples of Aims / Objectives of sales training: • Increase sales. profits. Content. or both • Increase sales productivity • Improve customer relations • Prepare new salespeople for assignment to territories
. Methods. called: ACMEE: Aim.
Content of Training Programme
• Content for new sales trainees is broader. It includes: • Company knowledge • Product knowledge • Customer knowledge • Competitor knowledge • Selling skills / sales techniques • Examples of specific content for experienced salespersons are: • New product knowledge • Introduce change in sales organisation • Negotiating skills • Content depends on the aims of training programme
Sales Training Methods
• Selection of suitable methods for a training programme depends upon the topic and audience • Training methods are grouped into five categories: • Class room / Conference training • Behavioural learning / Simulations
• Online training
• Absorption training/ self study • On-the-job training • We shall briefly review the training methods
and (3) group discussion • Lecture • Used when more information is presented in a short time to a large number of participants • May lead to boredom due to less active participation • Demonstration • Used for giving product knowledge • Group discussion • Useful when participants include experienced and inexperienced salespersons • A panel discussion consists of a small group of people who discuss a specific topic
.Class-Room / Conference Training Group
• The training methods in this group are: (1) lecture. (2) demonstration.
and (3) business games • Role playing • Useful method for teaching sales technique / process • Typically. group discussion and presentation • Business games • Helpful in learning impact of decision making • Generates enthusiasm and competitive spirit
. and building problem solving abilities • Case teaching includes open discussion. (2) case-studies.Behavioural Learning / Simulation Group
• This group consists of three training methods: (1) role playing. one trainee plays the role of a salesperson and another trainee acts as a buyer • Case studies • Beneficial for understanding consumer behaviour.
(3) distance learning • It takes 50 percent less time and costs 30-60 percent less. which is interactive
. and more convenient than other training methods • Useful for getting basic knowledge like products and customers • Electronic performance support system (EPSS) makes information available immediately. (2) interactive multimedia training.Online Training Group
• It includes (1) electronic performance support systems (EPSS). in a personalised manner • Interactive media training is used for retraining salespeople who can repeat or skip material as desired • Distance learning is a personal training method.
who read (or absorb) these materials without feedback • Useful for introducing basic materials or strengthening previous training On-the-Job Training Group
• Most companies use this method as it places a sales trainee in a realistic sales situation • Typically. product manuals. • It includes supplying Training / Self Study Group articles. a junior salesperson is assigned to a senior salesperson for some period of time • In mentoring. advise and support from mentors / experienced persons • Job rotation is used to groom salespeople for management positions
.Absorption audio cassettes. books. a junior / new employee gets information. and CD-ROMs to salespeople.
selection of appropriate method depends on active / passive learning • People generally remember • 10% of what they read • 20% of what they hear • 30% of what they see • 50% of what they hear and see • 70% of what they say. and • 90% of what they say as they do a thing
.Selecting Training Method
• In addition to the topic and audience.
are: • Who will be the trainees?
Organisational Decisions for Sales Training
• Who will conduct the training?
• When should the training take place? • How long should the training be?
• Where should the training be done?
• What will be the budgeted expenditure for the training?
. which are designing sale training programme.• Organisational decisions.
making travel arrangements of participants. and so on • A good practice to make a final check one / two days prior to start of training programme • Obtain feedback from the sales trainees at the end of the programme
. arranging internal / external trainers.Execution of Sales Training Programme
• Usually sales trainer or sales training manager is responsible for entire process of sales training • Execution / implementation includes preparing timetable. arranging conference hall and teaching aids.
over a period of one year
• Results – Performance. attitudes learnt • Behavioural change
• After training • Before & after – training • After training. Quarterly. skills. and to find if expenditure was worthwhile Framework for sales training evaluation:
What to measure • Training objective • Was training worthwhile? • Knowledge. skills. Yearly
. Profits Benefits more than cost? • Customer satisfaction
• After training.Evaluation of Sales Training Programme
• It is done to improve training design and implementation. • Sales. attitudes • Trainees’ change of behaviour How to measure • Questionnaires •interviews • Tests • Interviews • Self-assessment by trainees • Observation by supervisors / customers • Company data • Management judgement • Market survey When to measure • After the training
Outcomes to measure • Reactions / Perceptions of participants • Learning – knowledge.
Reinforce Sales Training
• Behaviour of most salespeople would not change unless there is reinforcement to sales training • In many companies reinforcement or follow-up trainings are not done • Training methods used for reinforcement are: • Refresher training consists of continuous training to overcome deficiencies of experienced salespeople and retraining of salespeople whose job requirements have changed • Web-based or online methods to reinforce formal training sessions • Senior salespeople or first line sales managers coaching new salespersons
Motivating the Salesforce
• Motivation is derived from Latin word “movere”. because financial performance of the company depends upon the achievement of sales volume objective
. which means “to move” • Motivation is the effort the salesperson makes to complete various activities of the sales job • 10-15 percent salespeople are self-motivated • Majority of salespeople are not adequately motivated • Importance of motivating salespeople is recognised.
• Motivational theories or behavioural concepts that are relevant to motivation of salespeople are:
• Maslow’s hierarchy of needs
• Hertzberg’s dual-factor
• Vroom’s expectancy • Churchill. Ford. shown hereunder:
. and Walker motivation.
and the company management becomes necessary
Selecting a Mix of Motivational Tools
• Motivational tools are divided into (1) financial. a compromise between differing needs of customers. These are shown in the next slide
. and (2) non-financial.• Sales manager should know each salesperson and understand his / her specific needs • For designing or selecting a mix of motivational tools. salespeople.
Motivational Tools in a Motivational Mix
Financial • Financial compensation plan • Salary • Commission/Incentive • Bonus • Fringe benefits • Combination • Sales contests
• Promotion • Sense of accomplishment • Personal growth opportunities • Recognition • Job security • Sales meetings • Sales training programmes • Job enrichment • Supervision
• Financial compensation is the most widely used tool of motivation. as salespeople give highest value to it
and differing territory sales potentials
. yet economical: It is difficult to balance these two objectives
• To be flexible to adapt to new products. changing markets. and motivate competent salespeople
Compensating the Salesforce
• To control salespeople’s activities
• To be competitive.• A good compensation plan should consider objectives from the company’s and salespeople’s viewpoint • Objectives of compensation plan from the company’s viewpoint • To attract. retain.
for easy understanding
• This is in conflict with the objective of flexibility • To have a fair payment plan • Fair or just payment to all salespeople is ensured by selecting measurable and controllable factors
.Objectives of Compensation Plan from Salesperson’s Viewpoint
• To have both regular and incentive income
• Regular income by fixed salary to take care of living expenses
• Incentive income for above average performance
• To have a simple plan.
Designing an Effective Sales Compensation Plan
• Designing a new compensation plan or revising an existing plan consists of the following steps:
• Examine job descriptions
• Set up specific objectives for salespeople
• Decide levels of pay / compensation • Develop the compensation mix
• Decide indirect payment plan or fringe benefits
• Pretest. and evaluate the plan • We shall examine these steps briefly
.G.G. E. number of sales calls made
• Objectives should be measurable. to decide how much to pay
Set up Specific Objectives for Salespeople
• These are derived from company’s sales and marketing objectives
• Salespeople should have some control on the objectives – E.G.Examine Job Descriptions
• Separate job descriptions are required for different sales positions or jobs – E. key account executive
• Each job description should include responsibilities and key performance standards. senior salesperson. missionary salesperson. sales volume.
and sometimes within the company • Firms decide a range of average pay. instead of a specific pay • Salespeople earn pay depending on their and company performance
Decide Levels of Pay / Compensation
. and skills required to do sales job • Cost of living in different metros and cities • Annual average pay levels vary between industries. experience.• It means the average pay or money earned per year (or month) • It is important to decide levels of pay for all sales positions • It is decided based on the following factors: • Levels of pay for similar positions in the industry • Levels of pay for comparable jobs in the company • Education. within the same industry.
commission. etc are not included • Basic types of compensation plans are: • Straight salary • Straight commission • Combination of salary. (2) commissions. (4) fringe benefits (or perquisites) • Expense allowances or reimbursements like travel. (3) bonuses. and / or bonus • 68 percent companies use combination plan and balance 32 percent firms use straight salary or straight commission • We shall briefly examine above compensation plans
.Develop the Compensation Mix
• Widely used elements of compensation mix are: (1) salaries. lodging.
superior performance may not be achieved • May be a burden for new and loss-making firms
. missionary salespeople. Hence.• Characteristics:
Straight – Salary Plan
• 100 percent compensation is salary. and when a company wants to introduce a new product or enter a new territory
• Salespeople get secured income to cover living expenses • Salespeople willing to perform non-selling activities like payment collection. which is a fixed component • No concern for sales performance or salesperson’s efforts • This plan is suitable for sales trainees. report writing • Simple to administer • Disadvantages: • No financial incentive to salespeople for more efforts and better performance.
insurance. and directsales (or network marketing) industries • Advantages: • Strong financial incentive attracts high performance. removes ineffective salespeople and improves results • Controls selling costs and requires less supervision • Disadvantages: • Focus is on sales and not on customer relationship • Salespeople may pay less attention to non-selling activities
.Straight – Commission (or Commission Only) Plan
• Characteristics: • It is opposite of straight-salary plan • Most popular commission base is sales volume or profitability • Commission rate is a percentage of sales or gross profit • This plan is generally used by real estate.
controlling salesforce activities. This plan is used for rewarding team performance
3) Salary plus commission plus bonus: suitable for increasing sales. and achieving short-term goals.Combination Plan
• • • Characteristics: Combines straight salary & straight commission plan Four types of combination plans used by companies: 1) Salary plus commission: suitable for getting improved sales and customer service
2) Salary plus bonus: a bonus is a lumpsum. for achieving short-term objectives. Also suitable for selling seasonal products like fans 4) Commission plus bonus: Not popular. Used for team selling activities for selling to major customers
. single payment.
implemented and understood • Indirect payment plan.Combination Plan (Continued)
• Advantages: • Flexible to reward and control salesforce activities
• Security for living costs and incentives for superior performance for salespeople
• Rewards specific sales performance • Different plans for different sales positions / jobs • Disadvantages: • Complex and difficult to administer • May not achieve objectives if not properly planned. help in attracting and retaining people. but have now come under government tax in India
. also called fringe benefits or perquisites.
before adoption • Either it is simulated on a computer. Administer. or pretested at one / more branches for 6-12 months • It should involve all concerned people • Administering the new compensation plan • Announce the plan in advance • Explain the new plan and reasons for changing the previous plan • Outsource administration if plans are changed frequently • Evaluating the new compensation plan • Find if objectives of the plan are achieved • Some companies audit compensation plans
. and Evaluate Compensation Plan
• Pretesting the new / proposed Compensation Plan: • Companies pretest a new (or proposed) plan.Pretest.
problem-solving. who perform beyond expectations • Situational leadership uses a style that fits the situation
• Leadership skills required by an effective sales manager are: communication.Leading the Salesforce
• Leadership is the ability to influence people to achievement of objectives
• Leadership is necessary for a sales manager’s effectiveness
• Transactional leadership equates to supervision – relating to day-today operations & control. and interpersonal
. and task-orientation • Transformational leadership changes values and attitudes of followers.
• Supervising is directing and controlling day-to-day activities of salespeople • It is a part of leadership • Sales managers use a combination of methods to supervise salespeople • Methods of supervision are classified into two categories – direct and indirect
Direct Supervisory Methods
• Telecommunications • Sales meetings • Personal contacts • Coaching / Mentoring
Indirect Supervisory Methods
• Sales reports • Compensation plan • Sales analysis • Expense accounts
Execution. etc. teaching aids. arranging trainers. • Evaluation of training is done to improve design & implementation. webbased. designing. job description. travel booking. and coaching salespeople
. survey. conference hall.Key Learnings
• Sales training process consists of need assessment. executing. and audit of salesforce • Designing sales training programme require five decisions. Methods. Content. performance testing. and find if expenditure was worthwhile • Methods used for reinforcement include refresher training. Evaluation • Execution of training programme includes preparing time-table. and reinforcing • Methods used for need assessment include observation. evaluating. called “ACMEE”: Aims.
• • • • •
Key Learnings (Continued) Motivation is the effort salesperson makes to perform various activities of sales job Out of the various financial and non-financial tools of motivation. financial compensation is most widely used 68 percent companies use combination compensation plan. a part of leadership. and interpersonal Supervising. and situational Leadership skills include communication. is directing & controlling day-to-day activities of salespeople
. problem-solving. transformational. and 32 percent use straight salary / commission plans Leadership is necessary for a sales manager’s effectiveness Leadership styles are transactional.