AMBA VI
MARKETING MANAGEMENT
Sales Management
Sales Management Issues
Uniqueness of managing sales people
Recruiting/Selection/Training
Motivating Salespeople
Managing Sales Reward Systems
Evaluating Salespeople
The uniqueness of managing Salespeople
Boundary Spanners
Evaluation/Control
The salesperson’s divided loyalties
Recruiting
Motivation
Reward systems
The Importance of Recruiting
The Turnover Problem
20% of ALL salespeople quit/fired in first year
55% of ALL salespeople quit/fired in five years
The Cost (first year costs of a salesperson)
Compensation $42,861
Benefits $10,931
Field expenses $33,764
Training Costs $26,679
TOTAL DIRECT COSTS $114,235
INDIRECT COSTS (Lost sales) $????
The Management Problem
Variables Affecting Management
Performance Action
APTITUDE Recruiting & Selection
PERSONAL CHARS. Recruiting & Selection
SKILL LEVELS Training & Supervision
ROLE PERCEPTIONS Training & Supervision
MOTIVATION Compensation/Rewards
ORG. & ENV. Sales Org. structure
What makes a good salesperson
Personal Computer Manufacturing
Threshold Competencies
Communication
Information Collection
Personal Sensitivity
Relationship Building
Technical Knowledge
Photographic Equipment Mfg.
Threshold Competencies
Decisiveness
Information Collection
Org. Awareness
Relationship Building
Systematic Thinking
What makes a good salesperson
Personal Computer Manufacturing
Differentiator Competencies
Focused Achievement
Org. Awareness
Personal Time Planning
Quick Thinking
Photographic Equipment Mfg.
Differentiator Competencies
Focused Achievement
Job Commitment
Persistence
Presentation Skills
Stress Tolerance
Job Qualifications - Survey of top sales execs. Said...
Enthusiasm
Well organized
Ambition
General experience working with people
high verbal skills
Specific experience in sales
Outstanding recommendations
Ability to receive and follow instructions
Sociability
Personal Integrity
Program content of sales training Vs. Successful sales person
Sales Skills (30% of actual success)
New Hires - 56% of training time
1-3 years - 65% of training time
Sales Knowledge (18% of actual success)
New Hires - 43% of training time
1 - 3 years - 35 % of training time
Attitudes (52% of actual success)
New Hires - 1% of training time
1 - 3 years - 0% of training time
Obstacles in Sales Training Programs
Top Management is often not dedicated to sales training
Sales training programs are not adequately funded
Sales people are often not enthusiastic about sales training
Sales people resent training’s intrusion on their time
Sales people resist changes suggested in training
Motivation in the salesforce
Motivation defined
Intensity - The amount of mental and physical effort put forth by the salesperson
Persistence - The salesperson’s choice to expend effort over a period of time
Direction - The salesperson’s decision as to where their efforts will be spent
The Problems
Effort … Results =?
Observing it?
The Theories
Content Theories
Process Theories
Content - Herzberg’s Hygiene
Job Environment can be broken down into two dimensions
Hygiene
These are factors that, if insufficient, can cause dissatisfaction on the job. They include pay, working conditions, relationships
Motivation
These factors are related to long term motivation, job satisfaction and performance. They include achievement, recognition, and opportunity for promotion.
Process - Expectancy Theory
Expectancies
A salesperson’s perceptions of the linkages between effort and performance (work more hours … perform better)
Instrumentalities
Salesperson’s perceptions about the correlation between performance and various rewards (increasing sales volume leads to more $)
Valence for rewards
Salesperson’s perception of the desirability of receiving increased rewards for improved performance
Role Perceptions and Motivation
Groups Influencing the Salesperson
Company, Sales Manager, Customers, Family
Salesperson’s Role Perceptions
Expectations - What do others expect me to do?
Ambiguity - How sure am I about what other people expect of me?
Accuracy - Is what I think they expect of me really what they expect?
Conflict - Does meeting the expectations of one group mean not meeting the expectations of another
Current Issues in Salesforce Motivation
How individualized should motivation be?
It is rare is most organizations to find individualized motivation programs… cost!
What will be effects of an aging population on sales force motivation
Career plateauing, job burnout
How should the expectations of today’s emerging salesforce be addressed in motivations programs?
Salesforce Rewards Ranked by Preference
Pay
Promotion
Sense of accomplishment
Personal growth opportunities
Recognition
Job security
Components/Objectives of Financial Compensation Plans
Sales Contests
Stimulate effort targeted at short term objectives
Incentive Payments
Direct effort at strategic objectives, reward top perf.
Commissions
Motivate high selling effort
Salary
Motivate non-selling efforts, adjust for differences in territory potential
Benefits
Satisfy security needs of salespeople, be competitive
Total Compensation
Recognition
Contests
Over-target Incentive pay
Target Incentive Pay
Salary
Benefits
Sales Expenses
Intrinsic Reward Focused Efforts
Outstanding Pay
At Risk Pay
Fixed Compensation
Security Needs
Reimbursement
Special Compensation
Incentive
Compensation
Seniority
Long-Term
Performance
The Compensation Equation
Evaluating salespeople
Most sales organizations evaluate sales performance on an annual basis
They employ a combinations of input criteria (customer satisfaction) and output criteria (sales volume)
Performance evaluations are most often conducted by field sales manager
Performance evaluations become part of permanent employment record
