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Chapter 17
MANAGEMENT OF THE SALES FORCE
EXTENDED PRESENTATION OUTLINE
Frequently, salespeople are given the opportunity to advance to the position of
sales manager and higher management positions that offer greater challenge and
increased economic rewards. Effective organization and management of a sales force is
an important responsibility of the sales manager.
As part of the Reality Selling Today Video Series, this chapter features an
interview with Jaime Barouh from McKesson, a supplier of pharmaceutical and medical
products.
I. Applying Leadership Skills to Sales Management
A. First promotion of many salespeople is to sales manager.
B. People who rise to the position of sales manager must understand the difference
between leadership and management.
1. Managers who lack certain leadership skills can actually deteriorate
salesperson performance.
2. Leadership is the process of inspiring, influencing, and guiding employees to
participate in a common effort.
3.
Leadership is a series of skills that can be acquired through study and practice.
1. Sales manager typically performs such management functions as planning,
2. An external management function, focused on bringing in orders and revenue
from outside the company.
3. Requires coordination and cooperation with almost every internal department
including marketing, finance, and distribution
4. Sales management involves organization of the sales force, recruitment,
training, supervision, and motivation.
5. More likely to function in a virtual office environment.
6. Sales managers can have a dramatic influence on the salespeople.
a. Can have an advantageous, neutral, or even detrimental effect on
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E. Structure: Structure is the set of written and unspoken policies, practices, and
expectations that surround the job of the salesperson.
1. Sales managers who display structure clearly define their own duties and
those of the sales staff.
2. Active role in directing subordinates’ work.
3. Policies and procedures are clearly defined, and subordinates know what is
expected of them.
4. Evaluate salespersons productivity and provides feedback.
5. Behaviors providing evidence of structure:
a. Planning takes place on a regular basis.
6. Structure: important aspect of sales management, too much structure can
create problems.
a. Effort to become better organized and more systematized, some sales
organizations have developed detailed policies and procedures robbing
salespeople of time, energy, and creativity.
b. Overcontrolling sales managers aren’t just annoying; they are also
inefficient.
F. Consideration: sales manager who displays the dimension of consideration is
more likely to have relationships with salespeople that are characterized by
mutual trust, respect for salespeople’s ideas, and consideration for their feelings.
1. Behaviors providing evidence of structure:
a. Regular and effective communication receives a high priority.
1. Situational leadership is based on the theory that the most successful
leadership occurs when the leader’s style matches the situation.
1) If sales manager fails the character test, they fail as a sales manager.
2) Character is composed of your personal standards of behavior,
including your honesty, integrity, and moral strength.
3) Important part of your relationship strategy and major ingredient
1. Coaching is an interpersonal process in which the manager helps the
salesperson improve performance in a specific area.
2. Coaching process has two primary areas of focus:
3. A coaching strategy involves four steps:
a. Document performance needs.
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b. Get the salesperson to recognize and agree there is a need to improve
performance in a specific area.
c. Explore solutions.
d. Get a commitment from the salesperson to take action.
III. Recruitment and Selection of Salespeople
A. Careful recruitment and selection of salespeople is very important.
1. Difficult task has now become more sophisticated.
2. About 20 to 25 percent of the salespeople currently employed are selling
products or services not suited to their personality.
3. Successful salespeople are often difficult to identify.
4. Selection of sales personnel today is more of a “science” and less of an “art.”
a. Ability to identify sales aptitude accurately can be acquired.
1. Outline duties the person will perform, prepare a job description.
2. Must have a clear picture of job requirements before beginning recruitment
process.
3. Some sales managers make every effort to discover the success factors
contributing to the achievements of high-performance salespeople.
4. Prepare a job description (after careful study of requirements)
a. “Job description” is an explanation of what the salesperson will do and
under what conditions the work will be performed.
b. Spell out in as much detail as possible the abilities and qualities that the
applicant needs to be successful.
c.
No substitute for knowing what the job requires.
C. Search out applicants from several sources.
1. Rule of thumb: Interview at least three applicants for each opening.
2. Suggested sources for new employees:
a. Candidates within the company
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D. Select the best-qualified applicant.
1. More difficult as products become more complex, customers become more
sophisticated, and competitors become more aggressive.
2. Selecting the best-qualified applicant never easy, but there are some
qualifications and characteristics that all sales managers should look for:
a. General mental ability
b. One of the most important qualities is a high level of interest and
enthusiasm for job.
c. High degree of self-motivation
d. Another very important quality is integrity.
e. Suggest background checks and interviewing for character by asking
ethics-based questions.
f. Personality and skills testing: to increase the quality of new hires, many
companies are placing more emphasis on personality and skills testing.
1. Different assessment instruments from companies such as HR Chally
2. Test results always should be used in conjunction with information
obtained from the interview with the candidate and the findings of
1. Give the new employee a thorough orientation to your business operation.
a. Provide orientation before the person begins working.
1) Include a review of company’s history, philosophy of doing business,
2. Initiate a training program to help the person achieve success.
a. Carefully planned and executed sales training can make a major
1. The size of the firm should not dictate the scope of the training program.
2. The program should include three dimensions.
a. Knowledge of the product line, company marketing strategies, territory
3. Size of the firm should not dictate scope or format of the training program.
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4. Program should have three dimensions:
a. Knowledge of the product line, company marketing strategies, territory
5. Important part of the sales training program is foundation-level instruction.
a. This aspect of sales training focuses on the basics.
1. Internal motivation, an intrinsic reward, occurs when a duty or task is
performed.
2. External motivation is an action taken by another person that involves
rewards that cause a worker to behave in ways to ensure receipt of the award.
B. Motivation experts agree that organizations should attempt to provide a mix of
1. Design programs that focus on several important aspects of the salesperson’s
job.
2. Evaluate your incentive program often to determine what plan has the most
impact.
3. Avoid setting goals that are unrealistic.
VI. Compensation Plans
1. Each plan must be chosen to suit type of selling job, the firm’s marketing
objectives, and type of customer served.
2. Salespeople who are involved in value-added selling earn highest amount of
total compensation.
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E. There are five basic compensation plans, which include:
1. Straight commission plan – the only direct monetary compensation comes
from sales; no sales, no income.
2. Commission plan with a draw provision or guaranteed salary – similar to
straight commission but with more financial security.
3. Commission with a draw or guaranteed salary plus bonus – offers more direct
financial security.
4. Fixed salary plus bonus – fosters company-centeredness and provides
financial security if salary is competitive; bonus incentive motivates.
5. Straight salary – fosters company-centeredness and provides financial
1. Purpose of strategic compensation planning is to guide salespeople in the right
direction.
2. Compensation plans can be designed to achieve a variety of sales objectives:
a. Specific product movement. Bonus points can be given for the sale of
certain items during specified “push” selling periods.
b. Percentage sales increase. Sales levels can be established with points that
are given only when those levels are reached.
c.
Establish new accounts. A block of points can be awarded for opening a
new account or for introducing new products through the existing outlets.
d.
Increase sales activity. For each salesperson, points can be awarded based
on the number of calls.
G. No easy way to develop an effective compensation plan.
H. Guidelines for developing a good compensation plan
1. Be sure that sales and marketing objectives are defined in detail.
2. Compensation plan should be field-tested before full implementation.
3. Carefully explain compensation plan to sales force.
4. Change compensation plan when marketplace conditions warrant.
a. One reason for poor showing of many plans is firms fail to revise plans as
business grows and market conditions change.
b. Review the compensation plan at least annually.
c. Annual review ensures alignment with conditions in the marketplace and
the company’s overall marketing strategy.
VII. Assessment of Sales Force Productivity
A. As the cost of maintaining a sales force increases, sales managers must give more
attention to measuring productivity.
1. Goal is to analyze the profitability of each salesperson’s sales volume.
2. Complicated because sales territories, customers, and business conditions vary