Sales Final

begin by examining the needs, dreams, and behaviors of people you want to affect with your solution. you will continue to view the world through this lens throughout the design process.

'Desirability' lens

what is technically and organizationally ( )

'Feasibility'

 Sales Contests  EqualPay  TeamCompensation  GlobalConsiderations  Changing the Reward System

Additional Issues in Managing Salesforce Reward Systems

• Decisions lie outside the sphere to which moral judgments apply. • Seeks profitability. Other goals are not considered.

Amoral Management

An appraisal of all salesforce activities and the environment in which the salesforce operates.

Assess Training Needs: Methods......Sales Force Audit

Customers are queried about how salesforce is performing.

Assess Training Needs: Methods.....Customer Survey

An investigation of the tasks, duties, and responsibilities of the sales job.

Assess Training Needs: Methods.....Job analysis

Sales managers assess training needs while observing salespeople in the field.

Assess Training Needs: Methods.....Observation

Evaluation of particular tasks or skills of the salesforce

Assess Training Needs: Methods.....Performance Testing

Salespeople are queried as to what types of training they need.

Assess Training Needs: Methods.....Salesforce Survey

• Links behaviors to specific results • Salespeople are used to develop performance results and critical behaviors • Positive feedback about behaviors may be more affective than positive output feedback

Behaviorally Anchored Rating Scales (BARS)

Is an ongoing measurement and analysis process that compares an organization's current operating practices with the "best practices" used by world- class organizations.

Benchmarking

Evaluate Training Alternatives...Selecting Sales Training Methods

Classroom/Conference Training, On-the-job Training (OJT): (Mentoring, Job rotation) Behavioral Simulations Absorption Training

The continuous development of salespeople through supervisory feedback and role modeling.

Coaching

Combination pay plans are more complex and difficult to administer. A common criticism of combination pay plans is that they tend to produce too many salesforce objectives.

Combination Plans: Disadvantages

• Combination pay plans are flexible. • They are also useful when the skill levels of the salesforce vary. • Combination pay plans are attractive to high-potential but unproven candidates for sales jobs.

Combination Plans: adv

Aligning customer/supplier strategic objectives, Listening beyond product needs, Understanding the financial impact of decisions, Orchestrating organizational resources, Consultative problem solving, Establishing a vision of a committed customer/supplier relationship, Engaging in self-appraisal and continuous learning

Competencies ofSuccessful Salespeople

Importance of obtaining market information from customers. Importance of quid pro quo

Considerate

• Rates that remain unchanged over the pay period. Pay is linked directly to performance.

Constant rates:

Assess the costs incurred by the sales organization to generate the achieved levels of sales.  Compare the costs incurred with planned budget.  Corporate resources earmarked for personal selling expenses for a designated period represent the total selling budget. 

Cost Analysis

• Don't design the plan centrally and dictate to local countries • Don't create a similar framework for jobs with different responsibilities • Don't require consistency on every performance measure within the incentive plan • Don't assume cultural differences can be managed through the incentive plan • Don't proceed without the support of senior sales executives worldwide

DON'Ts of Global Compensation

• Do involve reps from key countries • Do allow local managers to decide the mix between base and incentive pay • Do use consistent performance measures (results paid for) and emphasis on each measure • Do allow local countries flexibility in implementation • Do use consistent communication and training themes worldwide

DOs of Global Compensation

Evaluate Training Alternatives.... Selecting Sales Training Locations

Decentralized(e.g., district or regional offices) Centralized(e.g., corporate headquarter)

an approach to innovation that draws from the designer's toolkit, taking a human-centered approach to enable the cultivation and development of ideas into tangible strategies and offerings. It accelerates innovation to help create better solutions for the challenges facing business and society.

Design thinking is

Conduct Follow-Up and Evaluation:

Difficult to measure effectiveness of sales training, Reasonable attempt must be made to assess whether current training expenditures are worthwhile and whether future modification is warranted

Design the Sales Training Program:

Finalize the Training Program, Schedule Training Sessions, Make Necessary Travel Arrangements, Make Necessary Accommodation Arrangements

Allocate shared costs to individual units based on some type of cost allocation procedure.

Full Cost Approach:

• Salespeople are evaluated using some type of performance evaluation form • Especially useful in evaluating behavioral and professional development criteria • May be filled out by customers • Disadvantage is providing evaluations that discriminate sufficiently

Graphic Rating/Checklist Methods

Negotiation strategies, Listening skills and handling objections, Competitive product knowledge

Hard Bargainer

Frame Opportunities. An opportunity area is a stepping stone to idea generation. The framing of an opportunity space should be narrow enough to ensure you address the initial challenge, yet broad enough to allow for truly innovative solutions.a mindset of possibility, opportunities should start with the phrase "HOW MIGHT WE...?" (which is often abbreviated on sticky notes as HMW).Brainstorm Ideas, flexing your creativity as you answer the HMW question

IDEATE

involves generating a number of ideas that will shape your final solution.

IDEATE

One method for increasing both their lifespan and ultimate effectiveness is to Try Experiments. The best experiments do not test an idea as much as help evolve it. Experiments make an idea real and therefore help communicate its value and potential.

IMPLEMENT

bridges the project room and reality, with a focus on evolving ideas into successful solutions.

IMPLEMENT

focuses on the problems and opportunities that motivate the search for a solution.

INSPIRE

starts with Defining the Challenge. Next, you will use qualitative research techniques to Observe Users with the objectives of developing deep empathy for your users, questioning assumptions, and inspiring new solutions.Finally, you will Form Insights from your qualitative research data.

INSPIRE

The three main phases of the design thinking process are:

INSPIRE, IDEATE, and IMPLEMENT. I

• Seeks profitability and organizational success at any price. • Selfish. Management cares only about its or the company's gain.

Immoral Management

Methods for Reinforcing New Sales Skills Acquired During Training:

Incentive compensation for new sales behaviors Technology reinforcement and support Coaching by outside specialists Participation in a community Web site based on the training

Relate to the observable selling efforts a salesperson must make  Number of sales calls  Number of presentations  Number of proposals  Number of new clients contacted Ensure the reps are performing core selling activities

Input-Based Goals (Activity-Based Quotas)

Evaluate Training Alternatives.... Selecting Sales Trainers:`

Internal, External

Evaluate Training Alternatives..Selecting Sales Training Media:

Internet Computer-Based (e.g., DVD & CD-ROM) Video Conferencing Satellite Television Paper-Based

Perform Sales Training...Sales manager's primary responsibility during training:

Monitor progress of the trainees. Ensure adequate presentation of the training topics

• Management activity conforms to a standard of ethical or moral behavior. • Seeks profitability within the confines of legal obedience and ethical standards

Moral Management

Selling results a rep is expected to achieve  Number of orders received  Revenue generated  Sales volumes  Profits

Output-Based Goals (Outcome-Based Goals)

Expenditure percentage multiplied by sales forecast.

Percentage of Sales:

Organization can direct emphasis to what it considers important in the sales area. • Bonusesareparticularly useful for tying rewards to accomplishment of objectives.

Performance Bonuses: adv

It may be difficult to determine a formula for calculating bonus achievement if the objective is expressed in subjective terms. • If salespeople do not fully support the established objective, they may not exert additional effort to accomplish the goal.

Performance Bonuses: dis

Importance of qualifying prospects. Techniques for qualifying prospects

Persuader

 Compares profits and asset investments  Expressed in terms of ratios of inputs to output  Productivity improvements are obtained in one of two basic ways: 1. Increasing output with the same level of input 2. Maintainingthesamelevelof output but using less input 

Productivity Analysis

Analyzing the profitability of different organizational levels of different types of sales. • Income Statement Analysis • Activity-Based Costing • Return on Assets Managed

Profitability Analysis

Allocates costs to individual units on the basis of how the units actually expend or cause these costs.  Places greater emphasis on more accurately defining unit profitability by tracing activities and their associated costs directly to a specific unit.

Profitability Analysis: Activity-Based Costing (ABC)

Profit contribution as percentage of sales X Asset turnover rate = (Profit contribution / Sales) X (Sales / Assets managed)  Calculations provide an assessment of profitability and useful diagnostic information.  ROAM is determined by both profit contribution percentage and asset turnover.

Profitability Analysis: Return on Assets Managed Analysis (ROAM)

• Rates that increase as salespeople reach pre-specified targets.

Progressive rates:

• Rates that decline at some predetermined point.

Regressive rates:

Adequacy of Sales Managers Adequacy of Management Practices

SALES MANAGEMENT EVALUATION

Sales force Organization; Recruitment and Selection Sales Training; Compensation and Expenses Supervision, Morale, and Motivation Sales Forecasting; Budgeting; Quotas Territories and Routing; Sales Analysis Cost/Profitability Analysis; Sales force Evaluation 

SALES MANAGEMENT FUNCTIONS

Extra- organizational Factors: Political Legal; Economic Demographic;  Technological; Competitive; Market; Customer intra organizational Factors: Company Organization, Sales Marketing Department Links Marketing Mix, Sales Other Department Links 

SALES ORGANIZATION ENVIRONMENT

The proportion of commission to total pay should be higher when: sales are driven more by the individual salesperson's skills, efforts, and initiative than by other factors beyond the salesperson's direct control (e.g., price, quality, company reputation, sales support).

Salary vs. Commission

Importance of quid pro quo, Advantages of having a satisfied customer base, How customers can assist salespeople

Sales Job Facilitator

Situation: Time Constraints Nature of Tasks History and Norms Power: Sales Manager Power: Salespeople Other People Leadership Skill: Anticipation, Diagnostic, Selection, Communication(Influence Strategy, Communications, Mechanisms) Needs:Salespeople Other People Goals and objectives: individual organization

Sales Manager's Leadership Effectiveness

• Comprehensive, systematic, diagnostic and prescriptive tool. • Assesses the a firm's sales management process. • Provides direction for improved performance and prescription for needed changes. • Should be performed regularly. • Should be conducted by someone from outside the sales organization.

Sales Organization Audit

Although it is an expensive and time-consuming process, the sales organization audit generates benefits that usually outweigh the costs.

Sales Organization Audit

Multiple factors must be assessed • Four types of analyses are typically necessary to develop a comprehensive evaluation of any sales organization • Conducting analysis in each of these areas is a complex task

Sales Organization Effectiveness Framework

Activities related to working with sales subordinates on a day-to-day basis.

Sales Supervision:

The degree to which a sales trainee feels competent and accepted as a working partner

Sales training helps socialize the new hires, providing them with a positive: Initiation to Task

An understanding ofwhat tasks are to be performed, whatthe priorities of the tasks are, and howtime should be allocated among thetasks.

Sales training helps socialize the new hires, providing them with a positive: Role Definition —

Developed at all levels of the sales organization and for all key expenditure categories.  Objective is to determine the lowest expenditure level necessary to achieve the sales quotas.  Two approaches to setting the selling budget:  percentage of sales method  objective and task method

Selling Budgets

Ensure competence in the use of sales and sales support tools, such as CRM technology. Minimize sales force turnover rate. Prepare new salespeople for assignment to a sales territory. Improve teamwork & cooperative efforts

Set Training Objectives

Increase sales or profits, Create positive attitudes and improve salesforce morale, Assist in sales force socialization, Reduce role conflict and ambiguity

Set Training Objectives

Introduce new products, markets, and promotional programs. Develop salespeople for future management positions. Ensure awareness of ethical and legal responsibilities Teach administrative procedures (e.g., expense accounts, call reports

Set Training Objectives

Methods for Reinforcing New Sales Skills Acquired During Training:

Sharing sales methods and languages with the sales team Coaching by the sales manager Follow-up training classes Clear statement of management expectations

• Identify behaviors associated with effective leadership • "This is how a leader behaves" - how a leader interacts or behaves with subordinates • Two dimensions - social interaction between the leader and followers, and completion of the group's task(s)

Situation factors...Behavior Approach

• Leadership style is contingent upon situation • "Assess the situation then adjust behavior" • Leader's style is stable...but situation can change

Situation factors..Contingency Approach

Identify traits of an effective leader • "Great Man" theory - People are born with traits that help develop leadership skills • But...people can still learn to lead when lacking some of these traits

Situation factors..Trait Approach

 Data-driven methodology that attempts to eliminate defects in any process.  - 3.4 mistakes per million opportunities.  Improve processes by reducing variation  Credited with saving large companies hundreds of millions of dollars.

Six Sigma

Policies regarding socializing and giving gifts to customers. Ethical and legal implication of transacting business

Socializer

Strong incentive to perform • Income is linked directly to desired results. • Straight commission plans offer cost-control benefits.

Straight Commission: adv

Straight commission plans contribute little to company loyalty. • Problems may also arise if commissions are not limited by an earnings cap.

Straight Commission: dis

Salaries are simple to administer • Planned earnings are easy to project. • Salaries can provide control over salespeople's activities, and reassignments are less of a problem. • Salaries are useful when substantial development work is required.

Straight Salary: adv

• Salaries offer little incentive for better performance. • Salary compression could cause perceptions of inequity among experienced salespeople. • Salaries represent fixed overhead.

Straight Salary: dis

Selling the "substance" not just the "sizzle." Straightforward techniques for handling objections

Straight Shooter

Salespeople have an ongoing need to learn "how to sell," including questioning, listening, developing trust, and managing relationships.

Training needs...Sales Techniques:

Salespeople must know competitive offerings in terms of strengths and weaknesses.

Training needs..Competitive Knowledge:

Salespeople should know their customer needs, buying motives, buying procedures, and personalities.

Training needs..Customer Knowledge:

Salespeople must know their product's benefits, applications, competitive strengths, and limitations

Training needs..Product Knowledge:

Salespeople should continuously work onimproving their decision-making and professional behavior.

Training needs..Self-Management:

Salespeople should learn to maximum work efficiency.

Training needs..Time & Territory Management:

uses rewards and punishments to drive behavior and performance.

Transactional leadership style :

Legal Reminders for Salespeople

Use factual data, Thoroughly educate customers,Don't overstep authority, Be careful when communicating with competitors, Don't engage in "bait and switch", Don't try to force the customer to buy only from your organization, Don't engage in discrimination, Don't tamper with a competitor's product, Do not disparage a competitor's product, Avoid promises that will be difficult or impossible to honor

what is financially viable

Viability'

A process whereby an individual influences other group members to move toward or achieve a common goal. 1 a process 2 Occurs in a group 3 Involves influence 4 Involves movement toward a goal

What is Leadership?

 Harder goals will prolong effort  Tight deadlines lead to meeting completion dates, which helps work get accomplished

affect persistence

Take a we approach • Address only one or two problems at a time • Don't focus on criticizing poor performance, reinforce good performance • Foster involvement • Recognize differences in salespeople and coach accordingly • Coordinate coaching with more formal sales training • Encourage continual growth and improvement • Insist salespeople evaluate themselves • Obtain agreement with respect to punishments and rewards • Keep good records

affective coaching

gain entry, building rapport, secure attention

approach

Ensure the effort put into selling products earns good return  When sales are short of expectations, may need to revise marketing mix variables

assess roi

Sales Training Process:

assess sales training needs, set training objectives, evaluate training alternatives, design sales training program, perform sales training, conduct follow-up and evaluation

consists of criteria related activities performed by an individual salespeople, including: • Sales calls • Customer Complaints • Required Reports Submitted • Training Meetings • Letters and Calls

behavior

Those given in return for acceptable performance or effort. They can include nonfinancial compensation.

category rewards: Compensation Rewards

sale, secure follow up

closing

Comparing results helps determine what factors cause sales to be lower or higher in one area than another  Example: competition, customer demographics, etc.

compare result

is a discipline that uses the designer's sensibility and methods to match people's needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity."

design thinking

 Goals provide focus and direction  Direct attention and efforts toward goal-relevant behaviors and away from less relevant behavior

direct effort

the extent to which an individual determines and chooses efforts focused on a particular goal.

direction

 Goals are energizing  Higher goals produce more effort than lower goals  Knowing what's expected gives reps a target

energize reps

• Consider the criteria on which members will be evaluated and the methods used to evaluate performance. • Establish a link between team performance and positive outcomes to promote individual and team effort. • May be beneficial to allow team to help develop goals and evaluation criteria.

evaluating team performance

5 Sources of power:

expert, referent, legitimate, reward, coercive

When rewards such as pay and formal recognition act as motivators

extrinsic

Goals help direct efforts toward certain sales activities  Example: growing markets

focus selling efforts

service the sale, expansion selling-upselling

follow-up

 Goals affect problem-solving skills  People will seek new ways to accomplish difficult goals

increase problem solving

will inform the rest of the process and should be phrased in a human-centered way with a sense of possibility.

initial challenge

The force within us that activates our behavior:

intensity, direction, persistence

When doing the job is inherently motivating

intrinsic

Sales manager customize their leadership style to each individual salesperson. The objective is to build a long-term relationship based on mutual trust

leader-member exchange model LMX

• <15% include customer retention and satisfaction metrics in goals •Customer satisfaction can be difficult to measure • Sometimes easier to count number of customer complaints than gauge the service customers are getting - More accurate but time-consuming approach is to develop customer satisfaction measure consisting of a number of metrics - Ex: student advising

metrics related to customer service

Achievable goals can help motivate the sales force  Goals serve as benchmarks to help gauge how reps are doing

motivate sales force

ask questions, listen---most time is spent here

needs

concerns or objections, time, need

negotiation

those beneficial factors related to the work situation and well-being of each salesperson

non compensation rewards

Direct Effect: Against the Firm EX: Embezzlement, Stealing Supplies,Expense Account Cheating

nonrole

• Management By Objectives (MBO) • Mutual setting of well-defined and measurable goals within a specified time period. • Managing activities within the specified time period toward the accomplishment of the stated objectives. • Appraisal of performance against objectives.

objective-setting method

sales organizations, zone, regions, districts, territoires, accounts

organizational level analysis

• Occurs when a manager's evaluation of a salesperson is affected by considerations other than the specified criteria • Common sources of bias: - Personal relationships - Perceived difficulty of territory - Outcomes (i.e., ends justifies the means)

performance evaluation bias

The extent to which the goal-directed effort is put forth over time.

persistence

5 KNOWS--- product, company, industry, competition, customer

pre call preparation

what is the sales process?

pre call preparation prospecting approach needs presentation negotiation closing follow-up

• Assess improvements in certain characteristics of salespeople that are related to successful performance in the sales job • Characteristics include - Attitude, product knowledge, initiative and aggressiveness, communication skills, ethical behavior

professional development

• Salespeople have an impact on gross profits through the specific products they sell and/or through the prices they negotiate for final sale. • Salespeople affect net profits by the expenses they incur in generating sales. Examples: Net profit dollars • Gross margin per sale • Return on investment • Number of orders secured • Selling expenses versus budget

profitability

referrals, cold calls, direct mail

prospecting

• Rank all salespeople according to relative performance on each performance criterion • These methods force discrimination as to the performance of individual salespeople • May be complex • Rankings only reveal relative performance evaluation

ranking method

Delays or other problems with distribution of products New competitors and competing products entering marketplace Environmental factors affect customer demand and cause customers to postpone or cancel their purchases Change in laws and regulations preventing or restricting use of products and services or making them more expensive • Changes in the way firms do business, for example, as a result of new technology

reasons for not meeting sales goals

• Flawed sales projections based on limited marketing research • Changes in marketing mix variables resulting in inferior products or services • Increase in cost of supplies passed on to buyers via higher product prices • Promotional campaigns don't produce projected results

reasons for not meeting sales goals

• Salespeople measured objectively based on results such as - sales, market share, and accounts • A sales quota represents a reasonable sales objective for a territory, district, region, or zone • Some research shows that rewards for achieving results have a negative effect on performance and satisfaction

results

Direct effect: for the firm ex: Bribery • PriceFixing • Manipulation of Suppliers

role distortion

direct effect: against the firm ex: Superficial Performance Appraisal • Not Confronting Expense Account Cheating • Palming Off a Poor Performer with Inflated Praise

role failure

performancestandardbywhich salespeople are measured (Ex: quotas) - Synchronize direction and efforts of sales force with plans developed by top managers - Benchmark performance - Achievement of goals can be motivating and is usually tied to compensation

sales goals

Direction, Aligning People, Motivating & Inspiring, Change

sales leardership

The ability to influence others to achieve common goals for the collective good of the sales organization and company.

sales leardership

Planning & Budgeting, Organizing & Staffing, Controlling & Problem, Solving, Predictability

sales management

activities related to the planning, implementing, and controlling the sales function

sales management

Objectives Sales Management Program Implementation of the Program

sales organization planning systems

Communication skills influence strategies:

threats (coercive power), promises (reward power), persuasion (expert, referent power), maniplation

Uses inspiration and commitment to a vision to drive behavior and performance.

transformational leadership style

Comparisons with Forecasts Comparisons with Sales quotas Comparisons with Previous period • Comparisons within Sales Organization • Comparisons with Industry/Competitors

types of analysis

Total Sales • Type of Distribution • Type of Product • Order Size • Type of Account

types of sales

Job Security, Recognition, Sense of Accomplishment, Promotion, Pay, Personal Growth Opportunities

types of sales force reward

Include only direct costs in the profitability analysis.

 Contribution Approach:

Budgets and objectives/tasks are tied together during planning.

 ObjectiveandTask:

• Salesperson is evaluated by multiple raters. • Helps salespeople better understand their ability to add value to their organization and their customers.

360-Degree Feedback

refers to the amount of mental and physical effort put forth by the salesperson.

Intensity

• Job satisfaction related to turnover, absenteeism, motivation, and organizational commitment • Job satisfaction may be related to performance (direction of relationship is unknown) • INDSALES may be used to measure job satisfaction • Results may identify areas where manager may intervene to improve job satisfaction

Salesperson Job Satisfaction