EBS Sales Force Mgt Course

Book Release SF-A1-engb 1/2006 (1023)

April 2007
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 Sales Perspective

Development and Role of Selling in Marketing

Sales Strategies
Consumer and Organisational Buyer Behaviours

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 Selling
 Make a sale
 In most companies sales personnel are the single most important link w/ the cust.
 Front-line role
 Increasing emphasis on professionalism
 Required to adapt and change
 Type of selling/ Selling function:
 Order-takers (already committed cust.) : Inside OTs (transactional), Delivery Sp., Outside OTs
 Order creators: Missionary Sp. (do not close the sale, medical/architect rep.)
 Order-getters (persuade Cust. to make a direct purchase) :
 Front-line Sp.: New B. Sp. (win new prospect), Organizational Sp. (maintain close long-term
relationships), Consumer Sp. (more one-off)
 Sales support Sp.: Technical support Sp. (to front-line Sp.), Merchandizers (retail & wholesale)
 Salespeople key quality
 Empathy & an interest in people: identifying needs & understanding customer feelings
 Ability to communicate
 Determination
 Self-discipline and resilience
 B2B – B2C

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 Sales Management
 Exercise
 Planning: sales forecasting, budgeting
 Organizing
 Controlling
 Adapt and change

 Play strategic role:

 Make key input into formulation cny plans
 Less on sales volume, more on profits
 Must be aware of developments in HR management
 Ensure that sales function makes the most effective contribution to the achievement
of cny objectives and goals.
 Determination of SF objectives and goals,
 Forecasting, Budgeting
 SF organization, size, territory design and planning,
 SF selection, recruitment, training, motivation, evaluation, control

 Evolution of modern B. practice: production, sales, marketing orientation

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 Implementing the MK concept
 Segmentation and Targeting
 Clearer identification of mkt opportunities
 Designing products more finely tuned to the needs
 Focusing MK and SALES efforts on those segments w/ the greatest potential

 Segmentation bases:
 Consumer products and mkts:
age, sex, income, social class, geographical location type of residence using ACORN (A
Classification of Residential Neighborhoods), personality, benefits sought. usage rate, e.g.
heavy users versus light users

 Industrial products and markets:

end-use market, type of industry, product application, benefits sought, company size,
geographical location, usage rate.

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 Marketing Programme/ Mix
 Product:
 Features, packaging, quality, range
 PLC IGSMD
 Diffusion of Innovation Theory
Innovators 2.5% Early adopters 13-14% Early majority 34% Late M. 34% Laggards 16%
 Diffusion mediated by...
Risk, Relative advantage, Ease of Trial/ Divisibility, Communicability, Compatibility, Relative
simplicity

 Price: price levels, credit terms, price changes, discounts.

 How it affect selling and sales management
 Company objectives (Return on capital, early cash recovery, payback period
 MK objectives: mkt penetration, skimming
 Demand consideration, what the market will bear. SF can play a key role in the provision of
pricing information
 Cost (BEP, Cost-plus or Mark-up), Competition, Customer oriented methods

 Place/ Distribution: inventory, channels of distribution, number of intermediaries.

 Direct, Intermediaries – Intensive, Selective, Exclusive
 Level of Cust. Sce: delivery & transporation methods – increase inventory hence costs –
trade-offs

 Promotion: Advertising, Personal selling, Sales promotion, PR 6

 Sales and MK relationship
 Marketing strategy affect personal selling through:
 Creation of Differential advantage
 Strategic objectives: Build, Hold, Harvest, Divest

 Selling obj. and strategies are derived from MK strategy decisions

and should be consistent w/ other elements of the MK mix

 Selling objectives
 Sales volume, Market share, Profitability, Service levels, SF costs

 SF strategy (define how obj. will be achieved)

 Call rates, calls % existing vs. new accounts, discount policy, improving cust./mkt
feedback and cust. Relationships,
% of resources targeted at - new vs. existing product
- selling vs. after-sales service
- field selling vs. telemarketing
- different types of cust. (high/low potential)

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Marketing Plan Contents
 Sales Planning process:
Setting objectives, Determining operations necessary to meet objectives, Organizing for action,
Implementing, Measuring results against standards, Revaluating and controlling

 MOST: Mission, Objectives (where), Strategy (how), Tactics (details)

 Situational Analysis mkt analysis or Mk audit


Market Situation S (analysis of cust. needs and trends)

Competitive Situation S

Macro-environmental Situation - PEST, STEEPLE S
 Past Product Performance

Mkt and sales potential, Sales Forecast S and Key Assumptions
 Key Issues: SWOT

Objectives SMART S (setting sales objectives)
 Financial (profit, ROI)
 Marketing (sales volume, market share, targeting, pricing, cust. retention)

Marketing Strategies (one per objectives, competitors’ counter-strategies) S (Sales Mgr consulted and input)

Marketing Action Plan Implementation OR Integrated mkt program/mix S (Sales Mgr consulted and input)
 Target, Who, What, When, How Much… Communicated to everyone involved

Projected Profit & Loss Budget – Allocating resources S

Control - Contingency Plans S
 Measurement, corrections, modifications
 If threats/opportunities materialize, if situation/assumptions change
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 Mk plan influences sales
 Inside-out planning, financially driven
 Outside-in planning, customer-oriented
 Promotional mix:
 Advertising, Personal selling, Promotion, PR , Direct mk, Interactive/Internet mk
Where to place emphasis influenced by
 Type of make
 Stage in the buying process (hierarchy of effects model)
 Unawareness, Awareness, Comprehension  Ad.& PR
 Conviction, Purchase  Pers. Selling
 Push vs. Pull strategies, depending of channel of distribution
 Stage in the PLC

 Advertising-Selling relationship
 Reputation, awareness, new products, leads
 Consumer goods, branding/ brand image crucial, Advertising most effective promotional tool
 Brand or supplier loyalty: conscious decision – superiority perception
 Learning theory: tendency to repeat experiences that give us pleasure and to avoid those that do not

 Sales strategies to Tactics

 The SMgr must decide the specific actions required to achieve sales goals, ie. Tactics

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Consumers
 Who buys? Buying centre:  Choice criteria?
 Initiator  Economic: perf., reliability, price
 Influencer  Social
 Decider  Personal
 Buyer
 User

 How to buy?
 Need id./ Pb. Awareness
 Info gathering
 Evaluation of alternative
 Evaluative criteria
 Beliefs (imply knowledge)
 Attitudes (imply liking or disliking)
 Intentions
 Selection
 Post-purchase evaluation (cognitive dissonance)

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Factors Affecting Consumers
 Buying situation
 Extensive pb.-solving New purchase High involvement
 Limited pb.-solving Modified rebuy Limited involvement
 Automatic response Straight rebuy Low involvement

 Personal influences
 Personality: Dominant, Submissive, Warm, Hostile
D-H, SH, S-W, D-W  Modify selling accordingly
 Motivation  Needs to satisfy
 Perception  Selective exposure/ perception/ retention
 Learning  Changes as result of experiences

 Lifestyle/ psychographics: beliefs, activities, values, demographics

 Young sophisticates
 Home-centered
 Traditional Working class
 Coronation Street housewives
 Middle-aged sophisticates  Self-confident
 Homely
 Social influences  Penny-pinchers
 Social class  ACORN
 Reference groups
 Culture
 Family
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 Organisational Buyer
 Structure: WHO – DMU
 Avoid  Initiators
 Working in comfort zone  Users
 Spending too much time with naysayers  Deciders
 Influencers
 Organisational buyer
 Buyers
 Fewer customers
 Gatekeepers
 Concentrated markets
 Relationships
 More rational
 Decision-making process
 Product specifications 1. Problem/ Need recognition
 Reciprocal buying 2. Determination characteristics, spec, qty
 More risky 3. Search for, qualification potential suppliers
 More complex 4. Proposals
 Negotiation important 5. Selection
6. Order Routine
 Production type 7. Feedback and evaluation
 Job/ unit/ project
Batch
Content WHAT or CHOICE CRITERIA


 Flow/ mass/ line
 Process/ continuous
 Functional (Economic)
 Psychological (Emotional)

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Factors Affecting Org. Buyers
Factors Affecting Org. Buyers
 Buy class
 Straight rebuy
 Modified rebuy
 New purchase
 Product type
 Importance of purchase

Development in Purchasing Practice

 JIT
 Centralized Purchasing
 Reverse MK
 Leasing financial vs. operating lease

Relationship Management
 Interaction
 Strategic Partners
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 Sales Technique
Responsibility of a salesperson
 Primary to conclude a sales successfully
 Secondary:
 Prospecting
 Records, feedback
 Self-management
 Handling complaints
 Providing service
 Implementing Sales & MK strategies: eg. Diversion

Preparation
 Sales negotiations vs. Pure selling
 Relate product features to consumer benefits
 Competitors products/benefits knowledge
 Sales presentation planning
 Sales objectives: w. the Sp. Wants the Cust. to do
 Understanding buyer behavior
 Sales negotiations
 Balance of power
 # options available to ea. party
 Knowledge is power
 Need recognition & satisfaction
 Pressures
 Negotiation objectives: BATNA, ‘WOULD LIKE’, ‘MUST HAVE’
 Concession analysis (valued by the cust.)
 Proposal analysis (objection anticipation)

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Personal Selling Skills
 Personal selling process
1. Opening Cardinal sin: ‘Can I help you?’ ‘No thank you. I’m just looking’
2. Need & Pb. Recognition question-and-listen - open/closed question
3. Presentation & Demonstration
4. Objections
5. Negotiation
6. Closing
7. Follow-up call

 Presentation & Demonstration

Chinese proverb ‘Tell me and I’ll forget, show me and I may remember, involve me and I’ll understand’

 Relating Features & Benefits

 Which means that
 Which results in
 Which enables you to
 Reducing risk
 Reference selling
 Demonstration 1. brief features description/ ‘u’ benefits description 2. actual demo.
 Guarantees (warranty, service…)
 Trial orders

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Personal Selling Skills
 Objections
 Preparation
 Techniques:
1. Listen and do not interrupt
2. Agree and counter
3. Straight denial
4. Question the objection
5. Forestall the objection
6. Trial close
7. Hidden objections – Is there anything …so far which you are unsure about? …on your mind? –
– What would it take to convince you? –
 Negotiation
 Start high but Be realistic
 Concession for concession: ‘if…then’
 Buyer’s negotiation techniques
 Shotgun approach: unless you agree to cut…, we’ll look elsewhere
 Sell cheap, the future looks bright
 Noah’s ark: do better, competition is much lower
 Closing
 At highest interest, buying signals, trial close
1. Simply ask for the order
2. Summarize and ask
3. Concession close
4. Alternative close: red or blue, Tue. or Fri.
5. Objection close: if I can convince you…, will you buy it?
6. Action agreement: never display emotions – leave as quickly as possible 16
KAM
 Advantages  WHO
 Close relationships  Best person
 Improved communication and coordination  Support from top management
 Better f/up sales/service  Relationship-building skills
 In-depth DMU penetration
 Higher sales  KA relational development model
 Advancement opportunities for career Sp.  Per-KAM prospecting
 Lower costs thru joint agreement prod/delivery/forecast  Early-KAM build trust/performance/communication
 Cooperation on R&D  Mid-KAM
 Risks  Partnership-KAM share sensitive information
 Dependence, vulnerability of few customers  Synergistic-KAM transparent costing systems
 Pressure on Profit  Uncoupling KAM anytime, transactions/interactions cease
 Ever-increasing demand
 Neglect smaller accounts  GAM
 At odds w/ career aspiration
 When  Relationship building
 Small # of cust. = high proportion of sales  Personal trust
 Differentiation potential  Technical support
 Complex buying behavior  Resource support
 Multifunction contacts  Service levels
 Cost savings  Risk reduction
 Danger of different Sp.
 Tailoring products and services  KA information system
 Centralized cust.
 Competition doing KAM

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KAM
 KA planning system
 Account audit
 SWOT: Suppliers, Competitors, External
changes
 Account plan
 Objectives in terms of cust. responses
 Strategies
 Control progress/achievement/corrective actions

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 Relationship Selling
 From market-driven TQM to Customer care

 From Transactional to Relational selling

 2 business basics: MK (cust. Orientation/knowledge) and innovation
 Relationship MK
 Differentiate via actual and augmented product (holistic view: sales support, guarantees, after-sales care)
 First priority, customer satisfaction (perceived quality)

 From JIT to Relationship MK

 Part-time marketer of non-marketing staff
 BPB

 Reverse MK
 SCI: Looking at the Supply chain as a whole to find new opportunities to improve overall effectiveness

 From RMK to Relationship selling

 JIT based on open accounting
 Serve cust. present and future needs (holistic needs)
 Simultaneous engineering: Japanese subcontractors’ ability to participate in product design

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Relationship Selling
 Tactics of relationship selling
 Customers' needs focus
 Trustworthy relationships
 Internal MK concept
 Determination, self-motivation, tenacity - overtaken by – acceptability, attention to detail, get along
w/ people
 Sales visits longer
 Less calls
 Permanently at the cust.

 Information gathering
 MkIS: Market Intelligence + Market Research + Cny internal accounting syst. => Strategic MK plans
 Reducing selling costs
 More sales per cust.
 Superior business forecasting

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 Direct Marketing
 DM attempts to acquire and retain cust. by contacting them w/o the use of an intermediary.
Objectives:
 Purchase
 Literature/catalogue request
 Visit a location
 Participation
 Demonstration
 Salesperson’s visit

 Rise in DM fuelled by: Market fragmentation, Computer technology, List explosion, Sophisticated
Analytical techniques, Coordinated MK systems (integrated mk communications).
 Database MK is defined as an interactive approach which uses individually addressable mk
media and channels (such as mail, phone, and the salesforce) to
 Provide information to a target audience
 Stimulate demand
 Stay close to customers by keeping records

Actual & potential cust./ Transactional/ Promo/ Product/ Geodemographic (ACORN) info

Applications:
Direct Mail, Telemarketing, Loyalty mk, Campaign planning, Target mk, Distributor mgt syst., Mk evaluation

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Managing a DM Campaign
 MK plan

 Identifying and understanding the target audience

Consumer: ACORN – Business: organization/ individual type

 Setting campaign objectives: financial – communication – marketing

generating sales, making a sale

 Creative decisions
communication, target market analysis, brand benefits/weaknesses, offer dvpt , message communication, action plan

 Media decisions
 Direct mail: consumer lists, consumer lifestyle lists, directory, house list
who, what , why, where, when
 Telemarketing: inbound, outbound
 Direct response marketing: DRTV = teleshopping – 25mn product demo = infomercial
 Catalogue marketing:

 Campaign execution and evaluation

in-house or through a specialist DM agency

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 Internet and IT applications
 IT revolution: impact on salesforce productivity
Remote access email Word processing/ Spreadsheet
Time mgt software Database files Mobile phones
Desktop publishing Presentation software PPT Diary packages
CRM Internet Telemarketing software
SF software

 MyYahoo or else: attract and hold users – B2C, B2B – improved efficiency, enhanced buyer-seller R and processes
 E-COMMERCE: Internet keys: email and ecommerce
Publish/ Interact/ Transact/ Integrate (B2B extranet: e-network linking cnies to their trading partners)
EDI (e-data interchange) used for invoices
Barriers: locating websites, design, reluctance of new medium, security fears

 NEW ERA: popularity, profitability

 Back to REALITY: setting lasting R between cnies and cust.
 Key IMPACTS: - Building Customer-centric Selling Arenas
- Focusing on the right cust.
- Creating quality in Communications
- Understanding buyer behavior patterns (1. Whether the b. builds a R, 2. Scope of goods)
4 competitive landscape: Opportunity spot, Opp. Store, Loyal links, Loyal chains
- Changing approach to brand management
- Pricing
- Creating interactive opportunities with cust.
- Building cust. R.
- Performance measurement

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 CRM & IT applications
 Cust.-Cny contact points:
Competitors SF, email, websites, phone, distributors, fax
 QCi customer management model
Cust. Experience measurement
 CRM software: sharing information
CM activities  Software: Territory mgt, journey planning, recruitment and
Targeting selecting, sales training (CBT), sales forecasting, determining
Win-back
Enquiry mgt
salesforce size, salesperson evaluation.
Analyzing
and
The Pb. Mgt Measuring  Retail and MK
proposition the effect
SCM is the concept of product provision from suppliers’
planning Welcoming


Cust. Dvpt
production lines to retailers’ tills. The right products, in
Getting to know
cust. the right quantities, at the right times.
 EPOS and EFPTOS, Cust. Loyalty cards
mfrs do buy EPOS data from their cust.
Processes
 Space mgt systems
 DPP systems (Direct Product Productivity) low
essential generates in-store cust. Flow – modify its
People and organizations

packaging, trading terms, stocking, store position &

Information and Technology other variables
 Category mgt: customized merchandizing (tailored pdt
QCi customer management model assortments, space allocations, pricing, promotions)
 EDI (Electronic Data Interchange) order/ invoice pdts
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Sales settings
 Forces affecting selling and sales management

 Behavioral forces
 Rising cust. Expectations and being concerned w/ fulfilling of higher-order needs
 More professionally minded org. buyers
 Cust. avoidance of buyer-seller negotiation
 Expanding power of major buyers
 Globalization / Fragmentation

 Technological forces
 Sales force automation: laptop, EDI, videoconferencing, extranet
 Virtual sales offices
 Credit cards as charging platforms, used for databases
 Electronic sales channels: internet, TV home shopping

 Managerial forces to respond to the environmental changes, strategies and tactics to enhance sales effectiveness
 Direct marketing: direct mail, telemarketing
 Blending of sales and mk: intranet
 Qualification of Sp. and sales managers
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Sales Settings
 A sales channel is the route that goods take through the selling process from supplier to customer.

 Selecting / Reappraising Sales Channels

 Market
 Channel costs
 Profit potential
 Channel structure pull strategy: advertising to create brand loyalty, pre-sell the product
 PLC
 Non-marketing factors amount of finance available

 Characteristics of Sales Channels

Direct – Intensive – Selective – Exclusive

 Industrial, Commercial, Public authority selling (= org. buyers)

 Resale
 Outlet category: Multiples (≥10, similar range of merchandize), Variety chains (≥5), Cooperative
societies, Department store, Independents, Mail order, Direct selling
 Trade marketing focus: which product / sizes / packaging / prices / promotion retailer want

 Franchising (VMS) – franchisor & franchisee – franchise

 Mfrs to retailers (cars) – Mfrs to wholesalers (Pepsi, Coke) – Wholesalers to retailers (Spar) –
Sce firms to retailers (hotels, car rentals, fast foods…)
 Agreement: expertise, promotion, central purchasing, standard of operations, training, royalty

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 Sales settings
 Services
 Intangible, inseparable, variable (non-standard), perishable (inability to stock), no ownership
 7Ps= 4Ps + People + Process + Physical evidence
 Trust is essential

 Sales promotion
 Objectives: encourage repeat purchase, build loyalty, encourage visit,
build up retail stock level, widen/ increase distribution
 Price reductions, vouchers or coupons, gifts, contests/ competitions, lotteries, cash bonuses
 Techniques: consumer promo (pull), trade promo (push), salesforce/ personnel promo (2-6 months)
 Promotion integrated in the marketing communications
 Premium offers: Self-liquidating premiums, On-package gifts, Continuities, Coupons plans, Free samples

 Exhibitions
 Activities promoting the organization: trade show, events (concerts, races…), conferences
 Objectives: define the market (segments) / potential purchase value / status of contact to aim at /
potential customers / new product / communication level

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 Sales settings
 PR
 Public: community, employees, government, financial community, distributors, consumers, opinion leaders

 Definition: PR consists of all forms of planned communication, outwards, and inwards, between an
organization and its publics for the purpose of achieving specific objectives concerning mutual
understanding

 Corporate identity, Corporate PR

 PR is not: free advertising, propaganda, publicity

 Objectives: create a better environment for the organization and its activities
 Attract sales inquiries  Minimize competitor advantage while catching up
 Reinforce cust. Loyalty  Open a new market
 Attract investors/ merger partner/ smooth acquisition  Launch a new product
 Attract employees  Reward key people with recognition
 Dissolve or block union problems  Bring about favorable legislation

 Integration: technician or policy-making (corporate strategic plans) role

 Consultancies: in-house and/or external specialist

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 International / overseas
selling
 Balance of payment, the ≠ between export earnings and import expenditure
Trade surplus/ deficit, Invisibles= Services – Capital account, surplus, net capital inflow

 EU: removing taxation differentials, frontier controls and other forms of restriction open market
 Advantage in terms of selling: 1. How to reach the customers, 2. How can you sell into this market, 3.
What sales literature is necessary, 4. How should you advertise, 5. How will you provide after-sale service.
 Each country will adopt a particular expertise

 WTO, GATT: 1. Non-discrimination, 2. Consultation, 3. Tariff negotiation, 4. Trade liberalization

 Overseas benefits: 1. Non-availability, 2. Competitive costs, 3. Differentiation

 Culture is the distinctive way of life of a people that is not biologically transmitted, evolving and changing over
time.
 Reward and punishment principle.
 Abstract (values, attitudes, ideas and religion)
 Material (level & type of technology, consumption patterns)
 Achieve the balance ‘Think global, Act local’
 Develop cultural skills: convey respect, cope w/ ambiguity and frustrations, show empathy, avoid judging
others, control self-reference use, humor to prevent frustration
 Aesthetics, Religion, Education, Language, Social organization, Political Factors, Attitudes and values,
cultural change. 29
 Overseas selling
 Organization  Pricing
 1. Multinational marketing  1. Freight
 2. International marketing  2. Import (tariffs, quota)
 3. Exporting  3. Purchasing alliances (reciprocal trading)
 4. Direct, Indirect  4. Transfer pricing
 Intermediary  Japan
 1. Agent
 2. Distributors
 3. Licensing
 4. Export houses (home-based)
 Direct
 1. Subsidiary
 2. Joint-venture
 3. Direct selling

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 Law and ethical issues
 Contract: legally binding
 An invitation to treat (negotiate) is not an offer, it is an invitation to shoppers to make an offer to buy
 Terms and conditions: state the circumstances under which the buyer is prepared to purchase and the
seller is prepared to sell; define the limit of responsibility for both buyer and seller.

 Terms of Trade: overseas – Define the aspects of delivery and costs per Incoterms
 Bill of lading: is a receipt for the goods shipped, a transferable document of title to the goods allowing
the holder to claim his or her goods, and evidence of the terms of the contract of shipping.
 Ex-words – FOB – FOR (Rail) – FOW (Wagon) – FAS – CIF – C&F – Free delivered (import license)

 Business practices and legal controls  Consumer protection

 False description  By the law
(misleading statement, made-in, price)  Code of practice
 Faulty goods (advertising, market research, direct selling)
 Inertia selling (unsolicited goods/ services)  Trade associations
 Exclusion clauses (limit mfr liability)  Consumers’ associations
 Buying by credit  Salespeople Ethical issues
(disclose APR, cooling off period for doorstep sell)
 Bribery
 Collusion between sellers
 Deception
 Hard sell (high pressure sales tactics)
 Reciprocal buying
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 Effective SF Selection 1
 Sales attraction
 1. Working methods 2. Independence 3. Earning

 International sales
 Expatriates, Host-country nationals, Third-country nationals

 Job description
 Title, duties and responsibilities, direct supervisor, technical understanding degree, area, degree of control

 Personnel specification
 Physical requirement – Attainment – Aptitudes and qualities – Disposition – Interests – Personal
circumstances

 Central dynamics of sales ability

 Empathy – Ego drive – Ego strength – Self-motivation

 Sources
 Own staff – Agency – Schools – Competition – Other industries – Unemployed

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 Effective SF Selection 2
 Communication
 Achieve impact: ad size, content, headline, major job attraction

 Application Form
 Personal – Education – Employment history – Other interest
 Purpose: shortlisting, interview, post-interview

 Interview
 Type: Screening – Selection
 Objectives: form a clear and valid impression of the strengths and weaknesses
of the candidates
 Setting: relaxed, informal, low table
 Conduct: Establish rapport, reduce anxiety, themselves, experiences, attitudes, behavior, expectation
 Interview techniques: Playback - Rewards: ‘uh, uh’ ‘mmm, yes, I see’ eye/head behavior –
Silence – Probes – Summarizing – Neutral questions – Selling the job/ control the interview

 Psychology tests
 Multiple personal inventory test: based on the forced choice technique
 Different test might be required for different situations

 Role playing
 Short-term relationship sales, one-off sales

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Motivation
 Relationship between needs, drives and goals: ‘The basic process involves needs (deprivations) which set drives in
motion (deprivation w/ direction) to accomplish goals (anything which alleviates a need and reduces a drive)’.

 Maslow’s Hierarchy of Needs

Physical (physiological, safety) – Social (belongingness/ love, Esteem/ status) – Self (self-actualization)
Satisfied need is not a motivator of behavior – Different Sp. will have different combination of needs

 Herzberg’s dual-factor Theory

Hygiene: physical working conditions, security, salary, interpersonal relationships
Motivator: nature of work, achievement, recognition, responsibilities, interest value

 Vroom’s Expectancy Theory

Effort  Expectancy  Performance  Instrumentality  Reward  Valence  Value of reward
SM spec and communicate these perf. Criteria, relate R. to criteria, attainable target perf.,
VET = a diagnostic model

 Adam’s Equity Theory

Unfairness can arise when an individual’s effort or perf. exceeds the reward which s/he receives.

 Likert’s Sales Management Theory

SMs provide a set of standard – Sales meeting ‘group method’ vs. Monopolist’

 Churchill, Ford, Walker Model of SF Motivation

…  Motivation  Effort  Performance  Rewards  Satisfaction  …
Implication: convince Sp. harder and smarter work, reward worth the extra effort

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Motivation in practice
 Importance of SM relationship
 Motivating factors
Self-satisfaction of doing a good job, Achievement targets, Acknowledgement of effort,
Satisfy Cust. Needs
 Financial incentives: Commission/ Bonus (fair, attainable)
 Setting sales targets and quotas
 Meeting between SM and Sp.
Regularly, to better understand the motivators/ demotivators, understand their values
and expectations
 Discuss more: 1. Analyse job problems and try to find solutions together, 2.
Sales targets
 Positive/ Negative stroking
 Merit-based promotion (dual route)
 Sales contest (consumer SFs)
 Leadership is the process of influencing the behavior of people towards the
accomplishment of objectives.
1. Coercive (-) 2. Authoritative 3. Affiliate 4. Democratic 5. Pacesetting (-) 6. Coaching

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Training
 Skills development  Methods
 Unconsciously unable  Lectures
 Consciously unable  Films
 Consciously able  Role Playing
 Unconsciously able  Case studies
 In-the-field training
 Training program components
 Cny objectives, policies and  Evaluation of training
organization
 Products
 Competitors
 Training SMs
 Selling procedures and techniques (M5)
 Sp. requires self-mgt, selling,
negociation skills
 Work organization and reporting
 SM requires managerial,
administrative, leadership skills

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Organizing a Salesforce
Structure
 Geographical full range
 Product specialization overlap
 Customer-oriented
 1. Market-centered industry type
 2. Account size KAM, 3 tier-systems (KA, Sp., telemarketing team), team selling
 3. New or Existing account prospecting vs. current cust.
 4. Functional specialization development vs. maintenance
 Mixed organization
 SF organization considerations:
 Geographical size
 Potential
 Cust. expectations
 Product line width
 Current selling practices
 Language

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Number of Salespeople
 Workload method
 # of Sp. = # of Cust. X Call frequency .
Average weekly call rate X # of working weeks per year

 Establishing Sales territories

 Workload = ni ti + n tk ni = # of calls to be made to cust. in category i

ti = average time per call for ea. category i
n = total call # to be made
tk = average traveling time to ea. call

Designing territories calls for a blend of sound analysis and plain common sense
Sales potential

 Territory Revision

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Compensation
 Objectives
 1. Motivate by linking achievement to monetary reward
 2. Attract and hold successful Sp. by providing a good standard of living,
rewarding outstanding performance, providing regularity in income
 3. Selling costs fluctuation in line with sales revenue
 4. Direct sales to specific company sales objectives
 Type of Sp.
 1. Creatures of habit
 2. Satisfiers
 3. Trade-offers
 4. Goal-oriented
 5. Money-oriented

 Compensation plans
 Fixed salary
 Commission only
 Salary + commission

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 SF Forecasting
 Planning: allocate company resources so as to achieve sales forecasts/ anticipated sales
 Market forecasting
 Forecast: Short-Medium-Long term
 Levels: international, national, industry, company, product
seasonally, geographically, salesperson
 Qualitative
 1. Consumer/ User Survey method (market research method)
 2. Panels of Executive Opinions (jury method, top-down method) then cny determines its share of ind. forecast)
 3. Salesforce Composite (grass-roots approach, bottom-up) ea. Sp. Aggregated – Detecting ≠ in figures Sp+SMgr reconcile)
 4. Delphi Method members do not meet
 5. Bayesian Decision Theory subj. & obj. techniques
 6. Product Testing and Test Marketing

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Quantitative forecasting techniques
 Quantitative
 Time series techniques: time is the only variable too much on past events
 Causal techniques: independent variable – forecasted dependent variable relationship

 Time Series Techniques

 Moving averages averaging and smoothing time series data, unable to predict up/downturn
 Exponential smoothing apportions ≠ weightings
 Time series analysis seasonality, fashion
 Z charts Moving annual total, Cumulative sales, Monthly sales

 Causal Techniques
 Leading indicators (correlation analysis) Define & establish linear regression relationship between some
measurable phenomenon and whatever is to be forecasted
 Simulation iteration, trial and error
 Diffusion models new products, diffusion of innovation theory
 Computer software dates very quickly

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Budgeting
 Sales department budget is the b. for running the mk function for the b. period ahead
 Selling expense b.
 Advertising b. (above/under-the-line promotion)
 1. Last year’s sales %
 2. Competitor parity
 3. Left over
 4. Objective and task
 5. ROI
 6. Incremental
 Administrative b.

 Sales budget total revenue, statement of projected sales, other b. represent expenditures

 Budget allocation
 individual Sp. sales quota/ target, in order to achieve the forecasted sales
 consumer products: disposable incomes and number of people in the target
 industry: number and size of potential customers, workload

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SF Evaluation
 SF evaluation process
 Set SF objectives
 Financial (sales revenues, profit & expenses)
 Market oriented (market share)
 Customer-based (cust. satisfaction, service levels)
 Determine sales strategy
 Set SF objectives: cny, territories, products, Sp., accounts
 Measure results and compare with standard
 Action taken to improve performance

 Purpose of evaluation
 Attainment and setting of objectives
 Motivation
 Training
 Compensation

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 SF Evaluation
 Setting standards of performance
 Gathering information Sp., SMgt field visits, Cust. research, cny records
 Quantitative measures of performance
 Input measures: # calls, calls/ potential accounts, calls / active account, # quotes, # calls on prospects
 Output measures: Sales revenue, profits, % gross profit margin, sales/ potential / per active account,
sales revenue as a % of sales potential, # orders, sales to new cust., # new cust.
 Hybrid ratios: Strike rate (# orders ÷ # quotes), Sales revenue/ call ratio, Profit / call ratio,
Ā order value (sales revenue ÷ # orders), Ā profit contribution / order (profits ÷ # orders)
 Expense analysis: ex/ sales revenue, ex/ profit, ex/ call, ex/ per square mile of territory
 Compensation analysis: total salary/ sales revenue, total salary/ profits

 Qualitative measures of performance field visits

 Sales skills
 Cust. relationships
 Self-organization
 Product knowledge
 Cooperation and attitudes

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SF Evaluation
 Winning or Losing Major Orders
 Are we going to win or lose this order?
 SMgr asks: who, when, where, why, how

 Appraisal interviewing
 Identify a Sp. strengths and weaknesses
 Give praise
 Sp. to write down 5-10 expectations to achieve during the next year
 Quaterly meeting to review expectation (met or shifted), give or withdraw recognition
and acceptance

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