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Recruitment

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Importance of Recruiting:

High Costs of Hiring & TrainingOpportunity / Future loss in wrong recruitment High Turnover (50% within 2-3 years) Increased role of Salesperson..

Pre-recruitment Form

Build up a reservoir

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Sources of Recruitment

Present EmployeesCompetitors: Premium to be paidNon competing forms – vendors, customersEducational InstitutionsEmployment AgenciesVoluntary applicants – Walk inMiscellaneous Sources – Rotary, chambers

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Recruitment Process

Job Analysis Analysis of environment in which

salesperson must work Duties & responsibilities Observe & record the various tasks of the

job as they are performed

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Recruitment Process

Job Description Written job descriptor of what a jobholder

does, how it is done, why it is done Tool for hiring, managing and firing

Job Specification Minimum acceptable qualification that a

candidate needs for performing the job successfully

Ambition, enthusiasm, persuasiveness, discipline

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Recruitment Process

Attracting a Pool of TalentsNo. of applicants will generated by a firm will determine future success / failure.

SelectionCandidate who best meets the qualification & has the greatest aptitude for the job.

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Requirements in Sales Personnel

Mental Aptitude Dimensions

Mental Alertness

Business terms and memory recall aptitude

Communication skills

Numerical ability

Mechanical interest

Personality Dimensions

Honesty or character strength

Sociability

Cynicism

High energy levels

Dominance

Competitiveness

Emotional maturity

Work habits

Work motivation

Criteria Used to Select Sales Personnel

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Selection Process

Wide range of procedures / techniques.Simple one step system (personal interviews) to complex multiple systems (preliminary interview tests – final interviews)

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1. Initial Screening / Interview or Internal (conducted by staff member/subordinate

2. Formal application form (central record of all pertinent information collected during process)

3. Employment Tests Intelligence Tests: learning / alertness /

reasoning ability Sales Aptitude Tests: Selling know how /

Tact / Diplomacy Interest Tests: Pattern of a sales applicant’s

interest in selling Personality Tests: Measure assertiveness,

initiative & extroversion; both objective and projective tests (Myers-Briggs); Perceptual ability, emotional stability

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Honesty Tests (life insurance) Psychometric tests: Mind of the individual,

strength and weaknesses Knowledge Tests: Knowledge about

company, products, competitors, prices4. Comprehensive Interviews (Both come to know

each other)5. Reference checks6. Physical examination7. Making the selection

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Sales Training

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Sales Training

1. Initial Sales Training Varies between 3-9 months; ineffective if

less than 3, more than 9. Not intended for natural salespeople, or

people who do not want to change; difficult to decide; so offered to all

2. Refresher Training GE: 20 days a year Forget 50% of learning within 5 weeks Xerox: 87% Reinforce skills in Initial Training

3. Buddy System New accompanies old

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4. Training by manufacturer to distributor5. Training by manufacturer to customer

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Benefits of Training

Training Faster DevelopmentImprove Morale Increase Sales

Reduce Turnover

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Designing Sales Training

1. Determine Objectives; minimizing times sales people have to be away from field Increase sales: Efficient closing strategies Increase profits New accounts penetration: Improving time /

account management New distribution channel Product training Customer understanding Report writing

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Designing Sales Training

2. Review sales activities in the organization and prioritize them

should relate to actual selling situations 3. Identify training needs 4. Decide on who should be trained 5. Extent of training (how much)

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Implementing Sales Training Program

1. The Right Trainer Staff Trainer Outside Experts: (expensive, difficult to

customize, but more effective) Sales Manager (No Time)

2. Timing: (Initial / Refresher)3. Place of Training

a. Centralized Training b. Third Party Training c. Training Tours d. On Line Training e. On site training f. Postal training g. Satellite training

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Methods of Training (Group)

1. Lectures: goods for basic applied knowledge, but ill suited for training; cannot convey act of selling

2. Discussions: Trainer leads, stimulates; case studies, useful when participants are experienced

3. Audio cassettes4. Demonstration (Movie, Slide Presentations)5. Role Playing (better result if done in front of

experienced group).

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Methods of Training (Individual)

1. On the job – Training (Telling – Showing – Practicing – Evaluating)

2. Correspondence: ‘Home Study’3. Personality Development

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Evaluation Kirkpatrick’s four stage model: Reaction (salesperson bias affects evaluation) knowledge acquisition behavior change / transfer of learning (can be

measured through observation) organizational outcome

Methodology1. Interview Salesperson for reaction 2. Interview Trainee3. Interview Customer

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Sales Force Compensations

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Characteristics of Compensation Plan

1. Fair; Counting only sales volume & ignoring others

like training novices, securing is not fair, comparable to industry

2. In sync. with co. objectives Should direct activities of sales people so as

to achieve company aims, eg. If new business/servicing important then compensation should be based on new accounts

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Characteristics of Compensation Plan

3. Flexibility must acknowledge disparities in territory;

acknowledge pioneering activities, weaning customer away from competitor

4. Incentive and motivation Direct link between effort, results and

rewards, Bonus/Commission5. Security of Steady Income6. Ease of administration & comprehension

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Types of Compensation plans

1. Straight Salary: Used in organization require sales people to mainly sell and maintain customer relationships; also for team selling in industrial markets

Benefits Stable income, sense of security Reduces costs in growth market Better direction & control by

management because sales people do not depend on sales for pay.

Switching territories / quotas does not rouse resistance

Related work is taken w/o grudge

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Negatives Complacency, no extra effort in selling Sales are distorted in favour of easy to

sell products Capable sales people do not feel

rewarded Turnover rises

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Types of Compensation Plans

Straight Commission Most effective for small and new

organizations; may be different for different products, at different volumes etc.

Benefits Objective measure to judge performance Incentive to sales people for volumes Exodus among low performers Helps in setting targets Hinders transfer of sales people between

territories

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Negatives Customer service / relationship building

overlooked Little control over sales people – become

proprietarily do not give reports, do not follow up leads, shed prices, force sell

Focus is on sales not on profits Hinders transfer of sales people between

territories Wide differences of pay leading to de-

motivation Difficult in declining stages of product

life cycles High turnover

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Compensation plans

3. Sliding Scale Commission Constant Plan Regressive Progressive

4. Combination Plans Fair balance between security &

incentive Balance between sales activities & efforts Becomes difficult to comprehend or

account with complexity; involves a lot of calculations and administration

Have to be regularly analyzed and monitored in keeping with changes in external environment

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Developing a Plan Type of Industry and position of firm in Industry Awareness of company objectives

Market share New customers Reduced expenses

Specific ObjectivesWhat does the comp. plan aim to achieve? Income and security Fair and equitable Flexible

Describe the job List all components Measured with other similar jobs Relative importance

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Developing a Plan

Determining general levels of compensation What system does competitor use? What is average compensation? How are competitors doing with their

plans? What are the risks of departing from

industry patterns? Skills / experience / education Level of income for comparable jobs in

industry Level of income for comparable jobs in

company

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Methods of Payment Salary Commission Bonus Employee Stock Options Special Prizes Drawing Account Special Cash Incentives Non Cash Incentives Fringe Benefits Sales Force Expenses

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Pre-testing plan

Should be tested against possible, maximum and minimum sales

Administering the plan Evaluating the plan Periodic monitoring is essential for taking into

consideration changes within and outside the company

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Some Compensation ToolsSales Contests1. To encourage increase in sales volume2. To give a push to certain products 3. Also for dealers, distributors and consumers4. Necessary to pay attention to theme, timing,

number of awards, expenses 5. Should be evaluated in terms of effect on

various business functions (sales and profits, sales force motivation, customer relationships etc.)

6. Should be used only as promotional tool

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Some Compensation ToolsSales Force Expenses1. A good expense plan should be:

Beneficial to sales person Beneficial to organization Easy to administer Easy to understand

2. Types of expense plan Company pays all (usually expense

quotas are given) Sales person pays all; used in case of

state commission plans Company partially pays; fixed

traveling/DA

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Some Compensation ToolsFringe benefits:1. Has become important in the sales function2. Various FBs include

Social security Pension and retirement Insurance: Medical and accident Holidays and Leave Others like Company car, interest-free

loans, subsidized housing and food, mobile telephones, customer entertainment expenses

3. Most FBs are non taxable; certain benefits like education and insurance are highly valued, sometimes more than commissions