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CHAPTER 16
MANAGING WITHIN YOUR COMPANY
Outline of Chapter
I. Building Internal Partnerships
A. The Importance of Internal Partnerships
B. The Role of Sales
C. Selling Internally
II. Company Areas Important to Salespeople
A. Manufacturing
B. Administration
C. Shipping
D. Customer Service
E. Marketing
F. Sales
III. Partners in the Sales Organization
A. Sales Management
1. Sales Executives
a. Size and Organization of the Sales Force
b. Forecasting
c. Expense Budgets
d. Control and Quota Setting
e. Compensation and Evaluation
B. Field Sales Managers
1. Evaluating Performance
2. Training
C. Managing Ethics in Sales
1. Ethics and the Sales Executive
2. Ethics and the Field Sales Manager
a. Responding to Unethical Requests
D. Salespeople as Partners
1. Geographic Salespeople
2. Account Salespeople
3. Product Specialists
4. Inside Versus Outside
E. Sales Teams
IV. Selling Yourself
Teaching Suggestions
1. If you didn’t do this in Chapter 2, begin by asking students what a sales representative represents.
If you did ask that question back in Chapter 2, that’s ok. Just start out with a quick review. Many
students define sales representative as someone who presents product benefits—the salesperson
represents a product. Actually, the dictionary defines representative as one who acts as a delegate
or agent for another, meaning another person, and a product is usually not a person. Ask: Why is
that distinction important? Because it focuses the salesperson on staying acutely aware of the needs
of those being represented. Who are those other people that the salesperson represents? Students
will say the company, the customer, themselves, and perhaps society. You can take this discussion
in two directions. One is to discuss how the salesperson acts as a delegate of society, customers,
etc. and what this means in terms of determining what is ethical or not. But the context of this
chapter should lead the students to pose the question, "Who in the company does the salesperson
represent?" (If you had a discussion on the meaning of representative back in chapter 2, refer back
to it now, and get them to focus on this issue of whom they represent in the company.) Students,
based on reading the chapter, should include manufacturing, administration, shipping, customer
service, and management. This should lead to a discussion of how salespeople make promises that
other people fulfill ("It will be there Wednesday," "Sure, you can pay over 90 days," and others).
Salespeople need to know what they can and cannot promise, but they also have to have confidence
in their internal partners to deliver quality service to the customer.
You can then explore the concept of roles, role sending, role clarity (and conversely, role
ambiguity), and role conflict. Examples such as the following can be used to explore roles.
Management wants to clear out the inventory of the Omni-Form fabricator. Accordingly, they have
cut prices 10% and added a 5% commission bonus for every Omni-Form you sell. The technicians
(the ones who install and fix your company's products, including the Omni-Form) think the Omni-
Form is a piece of junk. They told you not to sell it—customers will hate it plus it makes their (the
technicians) lives miserable because they have to fix it all the time.
A customer's needs are such that you think the Omni-Form is the best product. The technician says
to sell them the Maxi-Form but it costs too much. The credit department says it doesn't matter, they
can't get credit anyway. Your manager reminds you that you need one more sale this month to make
your quota. (This example is based on a true story – names changed, of course.)
These examples point out how role conflict occurs. You may also want to get into a brief
discussion of the ethics associated with the decisions that the rep must make. Also, it is important
to note any long-term ramifications your decisions could have. For example, what will happen in
your relationship with service if you sell the Omni-Form? Then you can discuss leadership
behaviors, how these affect role clarity and direct salesperson behavior.
2. Forecasting is a difficult topic for students to comprehend because they fail to see the importance
of the link between the forecast and later actions at the field level. Personalizing forecasting can
help. One way is to ask students what jobs they plan to search for, and what industries they expect
to work in when they graduate. What is the basis for those expectations? What you should receive
is a list of judgmental techniques. Where can they go for more solid information (sources of
quantitative forecasts)? They will get into that more in the next chapter but it helps in
understanding forecasting now. Then discuss the flexibility they have built into their plans, in case
their forecasts are wrong. Pick out some industries that are currently struggling or growing. What
would have happened to the students if they had graduated five years ago and forecasted
incorrectly that a struggling industry would have thrived? Could they now make the switch easily
to a growing industry?
The same is true for companies and salespeople. They make decisions based on their forecasts that
lock them into certain strategic directions. As time goes on, they may have difficulty changing their
direction. What forecasts do salespeople make? One is total sales for the next period. This forecast
is used by sales management. But salespeople also make personal forecasts. That is, they forecast
sales potential from various account that they personally use to allocate sales efforts, as we
discussed in the last chapter. Therefore, this discussion should emphasize the importance of good
forecasting, as well as all of the uses of forecasts.
You may also want to discuss pipeline management here. If you are selling NetSuite in class, you
can illustrate how such software helps in forecasting through pipeline management. Simply by
multiplying conversion ratios against the average value of a sale and the numbers in each stage (the
number of leads, suspect, prospects, etc.), you can derive the total value of the pipeline, which can
then be used to set a forecast.
3. Exhibits 16.2 and 16.3 illustrate different compensation plans. It may also help to discuss quotas.
One method would be to put quotas on each area of performance, such as whether a rep had
the minimum number of total sales, but also sales by type of product or whether other things such
as end-of-aisle displays or coop advertising targets were met if selling through retailers.
Commission could be based on total points earned, while bonuses could be paid on achieving quota
in each category. This allows for more prescriptive control (the manager can see exactly where the
salesperson falls short), yet allows for the rep to be rewarded for either total performance (total
point performance) or complete performance (meeting quota in each category).
Once you have gone through the commission plan differences, ask students why would a company
pay a salesperson a salary? Some companies use very little sales management. They pay their reps
a straight commission and expect that commission, and the forces of natural selection (the strongest
survive) to take care of their management for them. So why would any company pay a salary?
a. to compensate for non-selling activities such as situations where a lot of technical expertise and
customer support activities are necessary (salary can be used in conjunction with commission
—the commission incents the rep to get more sales, the salary compensates for non-selling
activities)
b. when sales cycles are long (otherwise reps would starve between paychecks)
c. when sales results are the result of team efforts
d. when other components of the marketing mix are more important in generating sales (the extra
incentive of commission would not change sales greatly)
4. In this chapter, we have tried to provide students with methods of responding to ethical situations
that involve their manager. Provide students with the following scenario:
Your manager tells you to recommend the Deluxe model of your product in a particular account.
The customer's needs are such that the economy model is best suited. The customer trusts you and
has not shopped the competition at all. The customer, being a school system, qualifies for a
government discount but your manager told you to charge full price.
Then go over each method of responding to unethical requests. What would enable the salesperson
to choose a particular strategy? For example, what would make negotiation a particularly good
choice?
5. Exhibit 16-7 presents a team selling organization. Your students may have difficulty understanding
the differences between team selling and multi-level selling, and between team selling and product
based and account-based territories. In team selling, the account manager coordinates all sales
activities in the account. Thus the account manager tells the product specialists and the supply
specialists when to call on the account, who to call on within the account, what strategy to use, etc.
In product based territories, each specialist would prepare a separate strategy and would not
necessarily coordinate sales efforts with other salespeople from the same company. A similar
concept drives national account marketing. The geographic rep who may call on 150 grocery stores
in Arkansas may also call on local Wal-Marts. But the NAM for Wal-Mart determines what
strategy to use with Wal-Mart and coordinates the activities of all geographic reps across the
country that have Wal-Marts in their territory. Or it is possible that the geographic rep may call on
all stores in Arkansas but Wal-Marts, leaving Wal-Marts entirely in the hands of the account
manager.
Then use Exhibit 16-8 to present multi-level selling.
Suggested Answers to Ethics Problems
1. It took you four months to find a job, and you were almost out of money when you finally landed
your position. But today your boss asked you to do something unethical. You aren’t sure what the
corporate culture is yet because you are new at the company. How do you respond?
If you are using this in class, ask if anyone has a friend who experienced this. Start by asking if it
is easy to get a job right now. The more you can personalize this, the better students will learn.
2. Your company pays straight commission based on gross margin and you have the ability to
determine price, thereby influencing gross margin. The product, though, is standard and changes
are not made to it when it is sold. What should determine how much you charge someone?
Factors that will influence price in this situation can include:
Quantity
Competitive pressure
Suggested Answers to Questions and Problems
1. The director of sales took a call during a leadership meeting. He interrupted the meeting to say
to the CFO that a client in Mobile, Alabama, wanted a rush order but that the credit department
wouldn't allow it. The customer had a history for late payment and its last invoice would be late
tomorrow. If this was your account, what would you do? Would it matter if the rush order was
small or large?
Yes, it might matter, because if the order was large, you would definitely want to do something.
This occurred while one of the authors was working with a consulting client. The salesperson left
2. Reread “From the Buyer’s Seat 16.1.” How can you help your buyer get the right buy-in from
executives above that person and users across the organization? The situations discussed there
are primarily IT purchases. Why do those seem to require buy-in?
IT is used by everyone in a company. While any particular solution may have a smaller group of
users, typically the number of users for any solution is large, relatively speaking. For IT to work
3. A company that rents office equipment to businesses pays its salespeople a commission equal to
the first month's rent. However, if the customer cancels or fails to pay its bills, the commission is
taken back, even if the customer cancels 10 months later. Is this policy fair? Why or why not?
Why would the company have this plan?
Most students will say that this is unfair. The rep did the job by selling it. But the company's
4. Reread the chapter-opening profile of Sean Fulton. Are you a lone wolf or a team player? Based
on what you have seen in examples and profiles in the book, can you identify sales positions
where a lone wolf approach would work and where it wouldn't? What is the difference?
Answers will vary greatly from student to student, in part because of the assumptions made about
the nature of the situation but also as to how they see themselves. Some sales positions where a
customized to a particular retailer’s interests.
5. What is the role of the geographic salesperson in a national or strategic account? Assume that
you were a NAM. What would you do to ensure the support of geographic reps?
Geographic reps are the implementers of sales strategy, customer service reps, and the eyes and
ears of the NAM. They make the calls on local decision makers to present the sales strategy
How would that support differ if you were a product specialist and worked in a team situation?
As a product specialist, how would you get the support of the account manager?
In this situation, it is important for the product specialist to understand the account manager’s
6. Consider your own experience in group work at school. What makes groups effective? How can
you translate what you have learned about group work into working as part of a sales team?
We hope that one thing students learn is that groups are more effective when the members share the
7. Reread Sales Technology 16.1. Do you think new college graduates are better prepared for
working in sales from their homes than were previous generations? Why or why not? How can
you feel like you are part of a company if you rarely see anyone else from that company?
8. A sales manager gets one too many complaints about pushy salespeople, poor follow-up after the
sale, and a lack of customer care, and wonders if the compensation plan is to blame. What can a
manager do with compensation to promote greater customer service? Are there other ways to
motivate good customer service?
Some companies use salary to promote greater customer service, while others tie compensation to
employee, or through customer service goals such as no complaints during a certain period.
9. Many wise people say to worry about the things you can control and not to worry about the
things you can’t control. What does that mean for a salesperson, when so many promises a
salesperson makes are actually fulfilled by someone else?
It helps to remember that not everyone is perfect and people in other areas are bound to make
mistakes. Since the salesperson doesn’t have control over shipping, manufacturing, credit, and so
10. A sales exec recently shared that he was considering a pooled bonus for all field support reps.
He felt that because someone could be dropped into a hot territory, sales and commissions could
be very high; conversely, someone dropped into supporting a poor territory could work hard and
not get a bonus. A pool bonus where everyone shares equally would protect that salesperson.
Then an experienced FSR pushed back: “I don’t like subsidizing poor performers. If you paid us
straight commission, we’d know who could make it and who couldn’t. Sure, it may take awhile to
get rid of the deadwood, but after that, sales would skyrocket!” Explain why you agree or
disagree with this statement. Would it matter if instead of a support rep (who don't actually close
sales), the question focused on account execs (who do make sales)?
Like many questions in the book, this is based on a real example, and the question arose because a
salesperson earned over $1m in one year due to a change in how a territory was organized and how
one account bought. While she is a good salesperson, there was no way the company could pay her
ten times more than anyone else just based on who got what territory.
11. Salespeople are paid more than just about everyone in the company. This compensation
difference can create jealousy, particularly among those who don’t trust salespeople anyway and
think salespeople just play golf and entertain their way to the big bucks. How can you combat
these misperceptions? Does it really matter what others think about sales, or will the need to
serve customers and thereby serve the company be enough?
It really does matter what others think about sales and salespeople. If others in the company feel
you are overpaid and underworked, they’re going to be less likely to try to help you. And since you
are often the one who brings the voice of the customer, it may not buy into that “it’s all for the
Suggested Answers to Case Problems
Case 16-1: Castleberry Controls
Questions:
1. Evaluate the district’s performance. Draw conclusions (where are we doing well? Doing poorly?)
but don’t fix anything yet. Justify your conclusions.
2. Compare the performance of Mills and Gross. What are some possible explanations for the poor
FloMaster sales?
3. The VP of sales says the problem is a compensation plan problem. How would you fix it?
Focusing on compensation is not the correct solution, because reps are making the calls on the
4. The company is planning to create a new position of product specialist. This salesperson will
work with territory managers and will have a sales quota for FloMaster only. The product
specialist will work with one sales team (8 to 12 salespeople) and once a territory rep has
identified a FloMaster prospect, the rep will bring in the product specialist. How should the
compensation plan be adjusted? Why?
Assuming that the points are as high as they can go, then the rep will need to be paid fewer points,
and the product specialist will receive the rest. So a product specialist could get 3 points and the
5. The VP of sales managed to get the product specialist idea approved by the CEO, even though
the CEO argued that the salespeople were just too lazy to make the effort to sell the FloMaster.
Lower the compensation on it to the territory reps and everyone will sell the FlexFlow at its
lower price, the CEO says. The best way to get more FloMaster is to cut compensation on
FlexFlow to 20 points. What do you think should be done? Why?
Again, the issue is not compensation or effort. Looking at Table 4, it is clear that the reps are
Case 16-2: IKOH Products
Questions:
1. Answer Rick’s questions as if you were Jackson. To help you with your answer, consider that he and
the service reps are in Milwaukee, distribution is in Chicago, and the corporate office (where credit,
payroll, and other such functions are located) is in San Francisco. Regarding Wisconsin, would it
matter to your answer if they were a new customer versus a long-time customer? Why or why not,
and if so, how?
The manager’s two questions were: How will you fix Wisconsin and how will you fix your problems
that no one else seems to have?
To fix Wisconsin, it’s more important to get the product shipped than to fix the original problem or
assign blame. He needs to appeal to the Credit person on behalf of the company and customer – it is
time to beg for help. If he has damaged the relationship too much, he needs to ask the manager to step
in and help out.
2. Regarding Wisconsin Resources, would it matter to your answer if this were a new customer versus a
long-time customer? Why or why not, and if so, how?
3. What should or could Sarah do to help Jackson? Assume his sales performance is pretty good and
she doesn’t consider firing her an option.
Sarah should help Jackson develop a strategy for building relationships with the other areas in the firm.
She also needs to identify why these relationships are so poor. With her experience and relationships,
she has much better insight into the individuals and departments involved and can guide him to figuring
END OF CHAPTER ROLE PLAY
Chief Engineer
Today a salesperson is going to ask you to set up some kind of custom tool that a client can log
into and use to manage IT spend across all divisions separately, even though they make decisions
independently. Your objections are as follows:
1. I have no budget for any special features for any customer.
2. We have some serious bugs in some other products that I have my team working on – they
have no time for this.
Also, ask how will this interface with their accounting system and what do they currently use?
This important, you are curious because it could take some time if the system doesn’t interface
easily with the Gartner solution.
Engineering has taken a hit in terms of reputation over these bugs that your team is now working
on. You’d like an easy victory of some kind, like this custom thing to help get a large account, so
your team can look good. But don’t bring that up. First hit the rep with the objections, then let the
rep ask questions. Keep saying no until questions about the implications of the custom system or
the bugs are asked. Then you can note that it is really just a simple interface and custom system
already exists, it is just a matter of creating the interface with their current accounting system.
Plus some security has to be added to keep other people from coming along and accessing
someone’s information.
Legal Department
Today a sales rep wants you to change a contract. Listen to everything, then say no – it has to go
through all kinds of approval processes and it just isn’t worth it. Plus the new language has to be
written and the costs of the new terms have to be run through the CFO’s office to make sure that
the company can still turn a profit on the deal. The best the rep can hope for is that you will run it
by the CFO and see what they say.
One objection is that the laws of California are far more favorable to the customer than to the
vendor. You’ll need to get higher authority, maybe the COO or the CEO, to get this approved.
The bugs in the current release have really hurt sales. Like everyone in the company, you have a
quarterly bonus riding on company profit. If this deal is profitable, you’d like to see it happen so
you can get your bonus. After all, you were hoping to establish a college account for your new
baby.
Chief of Operations
Today a sales rep wants you to allow a plumbing manufacturer to come in and disrupt everything
trying to sell their products. No way! People have too much work to do! Quarterly bonuses are at
stake because salespeople aren’t doing their job making sales! If the rep can figure out a way to
minimize impact on employees and if the rep can convince you that this sale is worth it, then ok.
But really, send out DVDs? Does anyone even have a DVD player anymore?
EXERCISE 16-1 SALES FORCE STRUCTURES
Your assignment is to locate and interview the sales managers of two sales organizations. One organization
should be large, the other should be small. The purpose of the interviews is to explore the sales forces'
structures; how many salespeople are managed by one manager, what types of territories do they have, how
many regional, district, and field sales managers are there, and so forth. Ask about previous structures, how
the company changed over time and why. How does the structure reflect the company's strategy?
You can pair up to conduct the interview, but write your papers individually. You can use, as a format to
your paper, comparisons and contrasts between the two companies.
