26 Feb Activities Under Sales Management
The major decision areas in the sales force management include:
- Establishing Sales Force Objectives: The first task of the sales manager is to define objectives. These objectives provide standards for comparison to allow the manager to ask, “how well is the sales force doing”? The objectives should be stated in precise measurable terms and should specify a time period for their accomplishment. Objectives are first established for the sales force as a whole and then are broken down into objectives for each individual sales person. Overall sales force objectives are typically stated in terms of total rupee or unit volume, market share or profit and individual sales people objectives are expressed in terms of rupees or units. Usually the following criteria are used for setting the objectives of the sales force:
- Contribution of profit: It may be primary goal of the company established for its sales force. Sales volume and product mix usually influence profits as well as the cost of selling activity.
- Return on assets: This objective takes into account the capital investment for selling activities in such categories as offices, automobiles and warehouses.
- Sales cost ratio: It is the scale, many companies use to evaluate the success of their sales force. Sales expenses divided by rupee sales volume is the criteria.
- Market share: It may also be the objective of the sales force. Sales management may not really care about short term profits if market share is growing.
- Achievement of company or business unit marketing goals: Achievement of company or business unit marketing may imply involved perception, increased knowledge of the company, or wider acceptance of the particular point of view.
- Determining the Sales Force Size: The optimal size of a firm’s sales force depends on how it is structured, sales force productivity and numerous other factors. The optimal size changes as the firm’s market conditions and marketing objectives change.
- Recruiting and Selecting the Sales Force: Recruiting is the process of attracting applicants for sales positions. Recruiting can be done through reference by present employees, newspaper advertisements, and announcement in the trade publication, through public and private employment agencies.
After recruitment (i.e., inviting the applicants) selection takes place. The exact formula for a successful salesperson varies from situation to situation. No single factor is crucial for the success of the sales person. Never the less, several attributes usually do seem to contribute to its success. The attributes can be like maturity, personnel selling and sales management skills, appearance, cooperativeness, communication and public speaking skills, disposition, punctuality and mannerism.
The 3 steps in the sales force recruitment and selection are :
- Determining the number and type of people wanted by preparing the written job description.
- Recruiting an adequate number of applicants.
- Selecting the most qualified persons from among the applicants.
- Training and Developing the Sales Force: New sales people must be thoroughly trained before they are put into the field. Experienced sales people must also be trained so that they can do an even better job of selling. The training of sales force is important because it can help them to do better job, increase their morale, lower selling costs and improve customer relations. A comprehensive training program should provide help for the sales people in all their areas of responsibility.
The new sales person must learn the basic facts about the company and its goals, plans, and policies. The more they understand the company, the more they are prepared to communicate to both present and potential customers the message that company wants its customers to hear.
The experienced sales people must learn about changes in products and policies. Selling skills and interpersonal skills can always improve, and morale may rise simply as a result of spending time away from routine selling.
- Compensating the Sales Force: In developing a compensation package for a sales force, the sales manager must first decide what he wants the compensation program to accomplish. This decision will determine to a large extent the type of compensation and how much the total compensation package will cost.
- Motivating The Sales Force: Motivating sales people can be a particularly difficult job for the sales manager. However, it is the responsibility that must be performed successfully if the sales force is to work up to its maximum potential and achieve its own and the company’s goals. For motivating the sales people, financial and non-financial incentives play a very important role. Research has shown that sales people’s performance is dependent on expectancy perceptions. Studies have shown that the role of the gales manager is very important in developing a sales person’s expectations. The sales manager and company policy are the two most significant factors that determine the sales job satisfaction. Income is important, but it ranks only third as determinant of satisfaction.
For motivating the sales persons, the following guidelines are to be followed:
- The sales manager should understand salespeople’s needs.
- Goals must be established in order to obtain motivation like obtaining certain sales volume figure, calling on so many new customers in one month, increasing the size of average order or reducing the travel time by certain percentage etc.
- Achievement of goals must allow sales people to achieve their needs.
- The sales manager and sales persons should jointly set goals.
- The sales force must clearly understand the goal.
- Goals should be neither too difficult nor too easy to achieve.
- Sales quotas are perhaps the most important goal and must be carefully established.
- Setting up Sales Territories: The defining and allocating of territories to salesmen must be given serious thought by the sales manager. The allocation of territories is not merely a matter of a map and a pencil or a pair of scissors. It requires a fine judgment on a variety of factors. The object of dividing up the ground into territories and allocating appropriate territories to salesmen is to cover adequately the entire field of operations at the lowest cost.
The following guidelines are to be kept into consideration while establishing sales territories:
- A sales person should not have to spend more than two or three nights a week away from home to cover the territory.
- A territory will provide adequate income for the sales person and to have growth potential.
- Travel routes in a territory will be arranged to keep mileage and travelling time to an acceptable minimum.
- The number of established customers in a territory should be somewhat less than the sales person can call on and maintain the call frequency demanded by the product.
- A suitable plan for sales people to live near the geographical centre of their territory should be developed.
- The potential volume of a territory will cover direct expenses of maintaining a sales person there plus an acceptable profit margin.
- Territorial lines will be observed by sales personnel-sales in the territory are credited to the territory’s sales person regardless of who makes the sale.
- Supervising And Evaluating The Sales Force: Every person has expectations about performance. It is necessary to supervise and evaluate any business activity against those expectations for purposes of reward, promotion and improvement. Various companies use various means of performance evaluation. Quantitative evaluation is fairly popular because the information used is generally easy to measure. The evaluation may be individual evaluation as well as group evaluation. For some companies, individual evaluation may dominate performance reviewers. Self evaluation can play a significant role in job performance evaluation, especially when instruction is main goal of the evaluation.