To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 17©2003 Prentice Hall, Inc.

Chapter 17

Managing the Managing the Sales ForceSales Force

PowerPoint by Karen E. James Louisiana State University - Shreveport

To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 17©2003 Prentice Hall, Inc.

Objectives

Review the types of decisions firms face in designing a sales force.

Learn how companies recruit, select, train, supervise, motivate, and evaluate a sales force.

Understand how salespeople improve their selling, negotiation, and relationship-building skills.

To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Types of Sales Representatives

Solution venderSolution vender

Demand creatorDemand creator

TechnicianTechnician

MissionaryMissionary

Order takerOrder taker

DelivererDeliverer

To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Figure 17-1: Designing a Sales Force

To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Steps in Process

Objectives and strategy

Structure

Sales force size

Compensation

Objectives– Sales volume and

profitability– Customer

satisfaction Strategy

– Account manager Type of sales force

– Direct (company) or contractual

To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Steps in Process

Objectives and strategy

Structure

Sales force size

Compensation

Types of sales force structures:

– Territorial– Product– Market– Complex

Key accounts

To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 17©2003 Prentice Hall, Inc.

Discussion Scenario

Ariel Jones has tremendously increased the number of accounts and the dollar value of sales within her territory. She’s so busy servicing existing accounts that she has little time to seek new business. Management has decided to “split” her territory by giving 50% of her existing client base to a new sales rep.

What are the pros and cons of this strategy? Can it be implemented in a manner that minimizes potential negative consequences?

To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Steps in Process

Objectives and strategy

Structure

Sales force size

Compensation

Workload approach:– Group customers by

volume– Establish call

frequencies– Calculate total yearly

sales call workload– Calculate average

number of calls/year– Calculate number of

sales representatives

To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Steps in Process

Objectives and strategy

Structure

Sales force size

Compensation

Four components of compensation:– Fixed amount– Variable amount– Expense allowances– Benefits

Compensation plans– Straight salary– Straight commission– Combination

To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 17©2003 Prentice Hall, Inc.

Designing the Sales Force

Figure 17-2: Managing the Sales Force

To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Recruiting begins with the development of selection criteria

– Customer desired traits– Traits common to successful sales

representatives Selection criteria are publicized

Various selection procedures are used to evaluate candidates

To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Personality testing is one method of screening candidates.

To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Typical Training Topics

Sales presentation techniques

Company background and products

Company characteristics

Procedures and responsibilities

Competitors’ products

Training Training TopicsTopics

To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Many firms specialize in sales force training.

To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

The amount of time needed and the training method used vary with the level of task complexity.

Successful firms have procedures to aid in evaluating the sales force:

– Norms for customer calls– Norms for prospect calls– Using sales time efficiently

To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Greater emphasis on phone and Internet usage

Greater reliance on inside sales force

Time-and-duty analysis

Configurator software

Using Sales Time Efficiently

To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Configuator software packages assist in complex pricing tasks.

To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Motivating the Sales Force

– Most valued rewards• Pay, promotion, personal growth, sense

of accomplishment

– Least valued rewards• Liking and respect, security, recognition

– Sales quotas as motivation tools– Supplementary motivators

To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Evaluating the Sales Force

– Various sources of information may be used

– Types of formal evaluation include:• Performance comparisons

• Knowledge assessments

To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 17©2003 Prentice Hall, Inc.

Managing the Sales Force

Sources of Information When Evaluating the Sales Force

Call ReportsCall Reports

Customer SurveysCustomer Surveys

Other Sales RepresentativesOther Sales Representatives

Personal ObservationPersonal Observation

Customer Letters/ComplaintsCustomer Letters/Complaints

To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 17©2003 Prentice Hall, Inc.

Personal Selling Principles

Figure 17-3: Managing the Sales Force: Improving Effectiveness

To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 17©2003 Prentice Hall, Inc.

Personal Selling Principles

Major Aspects

Sales professionalism

Negotiation

Relationship marketing

Sales-oriented approach– Stresses high

pressure techniques Customer-oriented

approach– Stresses customer

problem solving Steps in industrial

selling process

To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 17©2003 Prentice Hall, Inc.

Personal Selling Principles

Figure 17-4: Major Steps in Effective Selling

To accompany A Framework for Marketing Management, 2nd Edition Slide 24 in Chapter 17©2003 Prentice Hall, Inc.

Personal Selling Principles

Major Aspects

Sales professionalism

Negotiation

Relationship marketing

Reps need skills for effective negotiation

Negotiation is useful when certain factors characterize the sale

Negotiation strategy

– Principled– BATNA

To accompany A Framework for Marketing Management, 2nd Edition Slide 25 in Chapter 17©2003 Prentice Hall, Inc.

Personal Selling Principles

Major Aspects

Sales professionalism

Negotiation

Relationship marketing

Building long-term supplier-customer relationships has grown in importance

Companies are shifting focus away from transaction marketing to relationship marketing

To accompany A Framework for Marketing Management, 2nd Edition Slide 26 in Chapter 17©2003 Prentice Hall, Inc.

Discussion Scenario

Salespeople who meet or exceed their assigned quotas are typically given higher quotas the following year.

How might this practice impact a company’s 1) internal marketing efforts with employees, and 2) relationship marketing efforts with external customers?