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Sales Force Management 2017
Course Outline (6/10)
Krzysztof Cybulski Ph.D. Marketing Chair Faculty of Management Warsaw University
Program of Sales Force Management Course
1. The Role of Sales Force in Today’s Changing World
2. Recruiting, Selecting & Hiring The Salespeople
3. Sales Training & Coaching Programs
4. Motivating the Sales Force
5. Salespeople Compensation Plan
6. Organizing the Sales Force. Functions of Sales Manager
7. Elements of Sales Planning and Sales Department Budgeting
8. Monitoring, Control and Evaluation of the Sales Force
9. Sales Organization Diagnosis
10. Special Sales Force Management Problems and Key Trends
Final Test
Agenda
Main Tasks of Sales Force
Leading Sales Force
Designing Sales Organization
Sizing Sales Organization
Inside or Outside Sales Force
Sales Territory Management
Sales Management as a Carrier
Main Duties and Responsibilities of Sales
Managers
Leading Sales Force
Hiring Salespeople
Hiring Salespeople
Salespeople Socialization and Training
Salespeople Socialization and Training
Profiling and Recruiting Salespeople
Profiling and Recruiting Salespeople
Establishing
Sales Force
Objectives
Establishing
Sales Force
Objectives
Designing Sales
Force
Organization
Designing Sales
Force
Organization
Evaluating and Selecting Candidates
Evaluating and Selecting Candidates
Establishing Sales Force Objectives
Prospecting – they find and develop new customers.
Communicating – they communicate information about company products and services.
Selling – they sell products by approaching the customers, presenting their products, answering objections and closing sales.
Servicing – in addition, salespeople provide services to customers (e.g. consulting on problems, providing technical assistance, arranging finance).
Information Gathering – salespeople carry out market research & intelligence work, and fill out sales call reports.
Designing Sales Force Organization
Territorial (Geographical) SF Structures
Product SF Structures
Market SF Structures
Functional SF Structures
Key Accounts SF Structures
Mixed SF Structures
Designing Sales Force Organization
Designing Sales Force Organization
Geographical Structure:
Each sales rep is assigned an exclusive territory.
Advantages:
Lowest possible costs because of low travel time &
administration expenses
Simplicity of organizational structure & information relations
Clarity in who is responsible for whom; one salesperson for
one customer
Disadvantages:
Salesperson has to sell the whole product line
Difficulties for dissimilar, complex products, no
specialization
Perhaps too much attention to easy-to-sell products
Designing Sales Force Organization
Product Structure:
Each sales rep is completely responsible for one product or
product line. Product specialization is particularly warranted
where the product are technically complex, highly unrelated, or
very numerous.
Advantages:
Better control of selling effort
Salespeople start to be experts in the products and needed
selling processes
Better control over product costs
Disadvantages:
High traveling costs
Duplication of calls & selling effort
Designing Sales Force Organization
Market Segments Structure:
Firm’s salesperson are often specialize along
industry or customer lines.
Advantages:
Better understanding of customer’s needs
Better allocation of marketing & selling effort due
to customers ranking
Disadvantages:
Higher costs related with extensive travel
Duplication of calls & selling effort
Designing Sales Force Organization
Key Accounts Structure:
Some firm create a separate corporate division for dealing with
major accounts; few major customers account for large amount of
company’s sales.
Advantages:
preferred supplier status
long, intense and profitable interaction
allows for close integration of manufacturing, logistics, marketing,
R & D
Disadvantages:
Excessive dependability on few buyers
Higher costs
Lack of experienced key account managers
Higher risk in general
Sales Force Sizing
How many salespeople are needed?
How many should be generalists?
How many should be specialists?
How many sales managers are needed?
How many telemarketing are needed?
How many support people are needed?
Sales Force Sizing
How much the company should
spend on the sales force?
What percent of sales should be
allocated to sales force expense?
How will sales and profits vary with
different sales force sizes?
Sales Force Size Estimation
Workload Method
Marginal Productivity Method
Average Productivity Method
Does Sales Force Become Too Small?
Numerous external and internal change forces
can cause a company’s sales force to become too
small.
External force include changes to company’s
customers, its competitors, and its environment.
Internal forces include new company strategies
and productivity enhancement initiatives.
Does Sales Force Become Too Small?
External change forces:
Market expands
Customers ask more from the sales force
Buying process changes so there are more
purchase influencers
Customers needs become more sophisticated
Customers require global reach
Competitors are expanding their sales forces
Does Sales Force Become Too Small?
External change forces:
New, larger, wealthier, smarter, more aggressive
competitors
Opportunity to take advantage of competitor’s
weaknesses
Better economic conditions
Outlook for future sales is better than company
expected
Industry deregulation and consolidation
Tight labor markets
Does Sales Force Become Too Small?
External change forces
Start up sales force
Launching new products
Entering new markets
Sales strategy (selling process) require more
salespeople
Targeting more customers and prospects
Rising market opportunity at lower financial risk
Does Sales Force Become Too Small?
Internal change forces
Increasing sales
Increasing market share
Increasing customer satisfaction
Increasing new business development
Increasing consultative, value-adding services
Reducing workload and travel per salesperson
because of large territories
Does Sales Force Become Too Big?
External forces create need to downsize the sales force
Market contraction
Buying process changes
Customer consolidation
Some customer prefer buy via internet or telesales
Customer need fewer services from salespeople
Fewer, weaker competitors
Competitors are downsizing their sales forces
Does Sales Force Become Too Big?
External forces create need to downsize the sales force
Commodification, increased price pressure, margin erosion
Weak economy
Financial success leading to overstaffing
Outlook for future sales is below company expectations
New sales channels
New technology reduce salesperson’s work
Does Sales Force Become Too Big?
Internal forces create need to downsize the sales force
Mergers/acquisition
Corporate strategy change
Shifting to a product or market emphasis that requires fewer
salespeople
Selling process and go-to-market changes that require
fewer salespeople
Targeting fewer customers
Selling fewer products
Does Sales Force Become Too Big?
Internal forces create need to downsize the sales
Pulling out of markets
Switch from revenue to a cost focus
Increasing productivity per salesperson
Reducing calls to unprofitable accounts
Reducing costs
Reassigning sales force tasks to less expensive
personnel (outsourcing)
Inside or Outside Sales Force
Own Sales Department
Outsourcing Salespeople
Mixed Solution?
Inside or Outside Sales Force
Inside or Outside Sales Force
Main Inner Determinants of Sales Force
Company’s Resources
Company’s Strategy
Position of Sales Department in the Company
Role of Personal Selling in the Promotion-Mix
Knowledge, Experience & Skills of Managers
Understanding of Modern Management Concepts
Inside or Outside Sales Force
Main External Determinants of Sales Force Management
Specific Character of the Industry
Market Position of the Company
Competitors’ Strategies & Activities of Rivals’ Sales Force
Available Managers & Salespeople
Access to Technology & Know-How
Sales Territory
Territory management is a customer group
or geographic area over which either an
individual salesperson or a sales team has
responsibility.
These territories are usually defined based
on geography, sales potential, its history or a
combination of these factors.
The ultimate aim of this division of areas is to
maximise sales and profits, and to allocate
resources efficiently.
Sales territory management why it is
important?
Sales territory management is more important than
many may realize. It can boost your sales team’s
morale, increase sales, provide a larger customer
base and inspire team cohesion. So what is it and
what do you need to focus on for efficient
management of sales territories?
It is very important to create sales territories that are
balanced. When a sales territory is out of balance,
there are two things that can happen.
If a territory is being under-serviced, the sales team
or salesperson is spread too thinly and it leads to
sub-optimal levels of activity.
Sales territory management why it is
important?
Those responsible for the territories will seek out too
few leads, identify too little prospects and spend too
little time with customers because they are
overworked. This leads to customers going to
competitors and you losing sales.
Over-servicing in a territory is where the sales team
has too little work and too many team members to
service a small area. This raises costs and prices
overall which ultimately leads to reduced sales.
Precious resources are also then not being utillized
in more important areas. This can lead to under-
servicing in other areas.
Sales territory management why it is
important?
Unbalanced territories can cause many problems.
Some of these include the unfair distribution of sales
potential amongst the sales force, distorted
compensation amongst sales reps and, reps leaving
the company to seek out better balance and
compensation elsewhere.
One of the things people can do to form good sales
territories is sales potential forecasting. This helps to
determine sales targets and identifies areas that are
worthy to allocate sparse resources to. Forecasting
determines the number of prospects in an area and
their combined (and individual) buying power.
Sales territory management why it is
important?
There are three main reasons why sales management usually
employs territories. It can be customer-related which increases
market coverage and provides good customer service. This
makes for higher sales figures and greater customer
satisfaction.
The second reason can be related to the salespeople
themselves. It increases enthusiasm and motivation in teams. It
is great for effective performance evaluation and decreases
employee turnover while providing reward potential for the
amount of effort taken.
The last reason can be releated to management. Control is
enhanced with territory allocation and is great for promotion
coordination. It provides potential for staff incentives and better
allocation of costs per territory.
Sales territory management why it is
important?
What do you need to take into consideration
when establishing territories?
Type of product or product line you have
Competition in territories
Channels of distribution and the transport system
Workload of the salesperson and the nature of the
assignment or job
Sales potential and servicing requirements of territory –
territories with limited potential can serve as a training
ground for new sales reps
Performance of a particular salesperson – this will
determine if they get more or less challenging territories
Sales territory management why it is
important?
Territory management can help spread out the
workload for your sales team, allowing them to
complete tasks more efficiently, build better
customer relationships and increase the good-
quality leads that they get.
Just as important is the motivation it provides to your
sales team if they feel like they are being productive
and accomplishing a lot of the sales goals they set
out to do
Sales and Sales Management as a Carrier
Sales Representative
Senior Sales Representative
Selling Specialist
Key Account Manager
Client Team Leader
National Account Manager
Sales Supervisor
Sales and Sales Management as a Carrier
Product Manager
Category Manager
District Manager
Regional Sales Manager
National Sales Manager
Vice President of Sales
Sales Managers their Duties and Responsibilities
Understanding the firm’s objectives, strategies &
market position
Preparing marketing (sales) plans & programs
Conveying these plans & programs to the
salespeople
Transforming these plans & programs into selling
tasks & methods
Organizing salespeople into effective and efficient
structures
Developing and updating sales forecast
Sales Managers their Duties and Responsibilities
Allocatining selling resources based on sales
forecasts & customer needs
Recruiting, selecting, training and assigning
salespeople to the sales territories
Motivating, compensating, and supervising sales
personnel
Synchronizing sales functions with other
marketing functions and production
Assessing sales performance by salespersons,
product lines, customer group and geographic
areas
Monitoring continuously competitors’ actions
Challenges of Newly Appointed Sales Manager
Choosing a leadership style
Supporting
Coaching
Mentoring
Team building
Representing
Persuading
Recognizing
Rewarding
Conflict management
Planning
Problem solving
Informing
Delegating
Clarifying
Monitoring
Leadership Behaviors and Styles
RELATIONSHIP-ORIENTED TASK-ORIENTED
Basic Leadership Styles
low task
and high relationship
high task
and
high relationship
low task
and
low relationship
high task
and
low relationship
High Low
Task behavior
Charismatic Leadership
Words and actions which transform the basic values,
beliefs, and attitudes of employees in such a way
that they are willing to perform beyond the standards
levels expected by the organization.
Articulate a vision
Challenge the status quo
Provide a role model
Reasons for Supervision
Leader
Training
Sales assistance
Enforcement Better
performance
Improved morale
Amount of Supervision Needed
Optimal
Amount of Supervision High Low
High
Low
Under Over
Morale Building Process
Integrate interests: match the person with the job
Foster open and frequent communication
Coaching and Mentoring Activities
Develop a strong corporate culture and a supportive organizational climate
Leader
Why aren't Sales Managers Doing a Better Job?
Ilogical selection of
Sales Managers
Peter’s Rule
Inadequate Training
Orientation towards
Sales not Relationship
Marketing
Insufficient blending of
Sales and Marketing
Functions
Key Words
Organizing Sales Efforts
Sizing and Deployment
Inside and Outside Sales Force
Sales Managers their Duties & Responsibilities
Sales & Sales Management as a Carrier
Tasks and Skills of Newly Appointed Sales Manager
Why aren't Sales Managers Doing a Better Job?
References
Darmon, R.Y.(2007). Leading the Sales Force, Cambridge
University Press.
Zoltners, A.A., Sinha, P., Lorimer, S.E. (2009), Building a Winning Sales Strategy, Amacom.
Zoltners, A.A., Sinha, P., Lorimer, S.E. (2004).Sales Force Design for Strategic Advantage, poalgrave macmillan.
Zoltners, A.A., Sinha, P., Lorimer, S.E. (2001).The Complete Guide to accelerating sales force performance. Amacom.
