MGT 4303 Exam 3

sales training topics

~(1) product knowledge- knowing how the product is made and how it is used/not used [customers also want to know how competitive products compare w/ each other on price, construction, performance and compatibility] [many benefits accrue as salespeople acquire product knowledge- (1) pride and confidence in product quality (2) self assurance emanating from technical knowledge of product make up (3) communication w/ customers through use of operational vocab peculiar to industry (4) understanding of product functioning that allows effective diagnosis of customer problems ~(2) market/industry orientation- need to know how particular industry fits into overall economy, detailed knowledge of present customers (their buying policies, patterns, preferences, products they produce, their customers) ~(3) company orientation- companys policies on salary structure/benefits/etc ~(4) time and territory management ~(5) legal/ethical issues ~(6) technology ~(7) specialized training topics- price negotiations/objections, detailed financial info is given to help see added value of pricing policies

analyze needs

~analyze needs of sales force [observe salespeople and ask what they need to know that will help them perform more effectively] ~consider job analysis, job description, sales force and marketing, sales managers, evaluation of previous training programs, customers ~sales training analysis should answer (1) where in the organization is the training needed (2) what should be the content of training program (3) who needs the training ~determine objectives- specific/realistic/measurable objectives are essential [review needs, consider long term and short term issues, compare training objectives with company goals]

develop and apply selection procedures

~aspects of selection procedure- application, personal interview, reference checks, psychological tests (intelligence, personality, aptitude/skills) ~primary purpose of application is to collect info about recruits physical characteristics and personal history [screen for basic qualifications such as educational experience] [helps managers prepare for personal interview w/ applicant] ~personal interviews reveal insight into applicants mental abilities and personality [in structured interviews each applicant is asked to same predetermined questions where unstructured interviews ask only a few questions to direct conversation and allows applicant to talk freely] ~checking references ensures accuracy of factual data about applicant [supply additional info and opinions about prospects aptitude and past job performance]

performance vs effectiveness

~behavior refers to what salespeople do- the tasks on which they expend effort while working ~performance is behavior evaluated in terms of its contribution to goals of org [reflects whether salespersons behavior is good or bad in light of orgs goals and objectives] ~effectiveness refers to some summary index of org outcomes for which an individual is at least partly responsible [doesnt refer to behavior directly b/c it is a function of factors not under salespersons control] ~salespeople should be evaluated solely on phases of sales performance over which they exercise control ~quotas are critical benchmark on which salesperson evaluations are based [acceptable measure b/c quotas supposedly consider variations in environmental factors across territories] ~sometimes quotas are arbitrary and not based on objective assessment of all factors that facilitate or constrain salespersons ability to make a sale ~other measures besides sales and profits are needed to evaluate performance more directly- these are objective and subjective measures ~objective- reflect statistics the sales manager can gather from firms internal data ~subjective- rely on personal evaluations by someone inside org [gathered via direct observation or input from customers]

salespersons role is affected by many factors (how salespeople influence performance)

~boundary position- salespeople are likely to experience more role conflict that other individuals in a company b/c they work at boundary of their firms [salespeople receive demands from customers so orgs that have diverse goals/policies/problems] [customer and salespersons own org want salesperson to be consistent w/ their own goals so demands on salesperson are often incompatible] ~"remote" sales force-salespeople operate from remote locations and spend very little time in company offices [this can increase role stress and lead to lower performance] [benefits of remote sales force include lower costs and stronger relationships as salespeople get close to customers] [managers help salespeople feel less isolated by remaining in regular contact and assuring reps they are vital part of org] ~interaction w/ people- people in engineering/production/credit departments may pressure individual to conform to their diff expectations [large number of people from diverse departments and orgs who depend on salesperson increases prob that at least some demands will be incompatible]

measuring broad benefits

~broad benefits of training include improved morale and lower turnover ~morale can be partially measured by studies of job satisfaction [a follow up job satisfaction study after corrective sales training program would determine if morale changed noticeably] ~measure reactions by asking participants to complete evaluation form either immediately after session or several weeks later ~objective examinations are needed to measure what trainees learned [to what extent did they learn facts, concepts and techniques covered in training session]

organizational and environmental factors

~can influence sales performance in 2 ways- (1) by directly facilitating or constraining performance (2) by influencing and interacting w/ the other performance determinants [role perceptions and motivation] ~organizational factors include company marketing budget, current market share for products, degree of sales force supervision ~direct relationship b/w performance and environmental factors like territory potential, salespersons workload, intensity of competition ~including salespeople in decision making process on territory design and technology decisions may increase performance over time [this can lead to less role ambiguity and more job satisfaction]

avoiding errors in subjective performance evaluation

~common instructions used to train managers in the appraisal process- (1) read the definition of each attribute thoroughly and carefully before rating (2) guard against common tendency to overrate (3) dont let personal likes/dislikes influence your ratings (4) dont permit your evaluation of one factor to influence your evaluation of another (5) base your rating on observed performance of salesperson not potential abilities (6) rate on general success or failure over whole period not just one instance (7) have sound reasons for your ratings

sales training methods

~common methods of sales training- on the job training (OJT), individual instruction, in house classes, external seminars

determining job qualifications and selection criteria [analyze the job and determine selection criteria]

~decide which traits and abilities are most important for which job and which are less critical [thought should be given to trade offs among qualification criteria] ~evaluate personal histories of existing salespeople to determine what traits differentiate b/w good and poor performers [if new employees have attributes similar to those of people who are currently performing job successfully they may also be successful]

evaluate and review program

~develop monitoring systems, monitor program, analyze reactions and learning behavior, measure results, conduct cost/benefit analysis, revise program if needed before next session ~what do we want to measure, when do we want to measure, how do we measure the training ~sales managers and evaluations of sales performance provide proof of value of training [changes in performance can be due to other factors besides training]

measuring specific benefits

~effectiveness of training aimed at securing more new customers is assessed by examining call reports to see whether new customers are being called on ~most training programs have several objectives so multiple measurements of effectiveness are necessary part of evaluating benefits

recruitment and selection issues

~establish policy concerning responsibility for recruitment and selection (who will participate in the process, who has authority to make hiring decisions) ~analyze the job and determine selection criteria (conduct a job analysis, write a job description, develop a statement of job qualifications) ~find and attract a pool of applicants (internal sources, external sources) ~develop and apply selection procedures to evaluate applicants (application blanks, interviews, reference checks, formal tests)

objective measures of performance

~fall into 3 categories- output measures, input measures, ratios ~output measures show results of efforts expended by salesperson [input measures focus on efforts sales reps expend rather than results of those efforts] ~input measures are important b/c there is often a lag b/w inputs and results so focusing on efforts lets sales manager evaluate salesperson during selling process ~output- number of orders, average size of orders, number of cancelled orders, number of active accounts, number of prospective accounts ~input- total number of calls, days worked, calls per day, selling time vs nonselling time, phone calls to prospects ~ratio measures- sales expense ratio (expense/sales), cost per call ratio (total costs/number of calls)

rewards

~firm may choose to evaluate and reward diff dimensions of sales performance [total sales volume, quota attainment, customer satisfaction, profitability of sales, new accounts generated, services provided to customers, etc] ~extrinsic rewards are those controlled by people other than salespeople [include pay, financial incentives, security, recognition, promotion] ~intrinsic rewards are those that salespeople attain for themselves [feelings of accomplishment, personal growth, self worth]

find and attract applicants

~firms attempt to hold down recruiting costs in hopes that good training program can convert marginal recruits into solid sales performers ~primary objective of recruiting process is not maximize total number of job applicants [too many recruits can overload selection process forcing managers to use less screening procedures] ~self selection by prospective employees is most efficient means of selection so recruiting effort should discourage unqualified people from applying ~recruiting communications should point out both the attractive and unattractive aspects of job to be filled, spell out required qualifications, state likely compensation

on the job training (OJT)

~five keys for effective OJT- (1) teaming [bringing people w/ different skills to address issues] (2) meetings [setting aside times when employees at diff levels and positions can get together and share thoughts on various topics] (3) customer interaction [including customer feedback as part of the learning process] (4) mentoring [providing informal mechanism for new salespeople to interact and learn from more experienced ones] (5) peer to peer communication [creating opportunities for salespeople to interact for mutual learning] ~when OJT and coaching occur together it is called one on one training ~often involves job rotation- assigning new salespeople to diff departments where they learn about manufacturing, marketing, shipping, credits, servicing, etc ~after OJT many trainees proceed to formal classroom training

BARS system

~focuses on fact that number of factors affect employees performance but some of these factors are more critical to job success than others ~requires managers to consider a wide range of components of salespersons job performance ~includes clearly defined anchors in behavioral terms leading to thoughtful consideration by managers of just what comprises performance ~emphasizes behavior and performance rather than just effectiveness ~relatively costly to develop since they require a good deal of up front time from many people ~only effective in evaluating salespeople performing very similar functions

motivation

~how much the salesperson wants to expend effort on each activity or task associated with the job ~motivation is function of persons expectancies and valences for performance ~expectancies are salespersons estimates that expending effort on specific task will lead to improved performance on some dimension ~salespersons valence for performance is a function of salespersons instrumentalities and valences for reward [instrumentalities are salespersons estimates that improved performance will lead to increased attainment of particular rewards] [valences for rewards are perceptions of desirability of receiving increased awards as a result of improved performance]

dangers of paying salespeople too little

~if poor salespeople are hired at low pay, poor performance will result [if good salespeople are hired at low pay the firm is likely to have high turnover w/ resulting higher costs for recruiting and training replacements and lost sales]

objectives of sales training

~improve customer relationships- having same salesperson call on given customer for extended period of time can enhance relationship b/w company and customer especially when salesperson can handle customer questions, objections and complaints (the topics covered in sales training programs) [inadequately trained salespeople cant provide these benefits and customer relations suffer] ~increase productivity- giving salespeople the skills they need to improve their performance and make positive contribution to firm ~improve morale- when sales trainees know what is expected of them they are less likely to experience frustration that arises from trying to perform job w/o adequate preparation ~lower turnover- if sales training can lead to improved morale lower turnover results ~improve selling skills- time and territory management [improving basic selling skills leads to improved performance in field]

incentive ceilings

~in favor of ceilings- ensure top salespeople will not earn so much that other employees in firm suffer resentment and low morale, protect against windfalls (such as increased sales due to introduction of successful new products) and salespersons earning might become large w/o corresponding effort, make firms sales compensation expense more predictable and controllable ~against ceilings- reduce motivation and dampen sales force enthusiasm, salespeople may reach ceiling early and be inclined to take it easy the rest of the year

establish responsibility

~in firms w/ small sales forces the recruitment and selection of new people is primary responsibility of top level sales manager ~in larger multilevel sales forces attracting and choosing new recruits is usually too extensive and time consuming for a single executive ~in some firms HR people assists sales managers in hiring new people [helps reduce duplication of effort but HR may not be as knowledgeable about the job and qualifications necessary]

job analysis and determination of selection criteria [analyze the job and determine selection criteria]

~info about selling jobs content comes from (1) current occupant of job (2) sales manager who supervises that person

internal sources [find and attract applicants]

~internal sources are people already employed by the firm [while external sources include people in other firms, advertisements, recruiting agencies, universities, internet] ~when job involves technical selling that requires substantial product knowledge and industry experience firms focus on employees in other departments within company and on personal referrals of people working for other firms in industry ~recruiting current company employees for sales force has distinct advantages- (1) company employees have established performance records and are more of known quantity than outsiders (2) recruits from inside firm require less orientation and training b/c they are already familiar w/ company (3) recruiting from within can bolster company morale [employees become aware that opportunities for advancement are available outside of their own department]

salesperson performance

~is a function of 5 factors- (1) role perceptions (2) aptitude (3) skill level (4) motivation (5) personal/organizational/environmental variables ~success of salesperson is combination of these factors which can influence performance positively or negatively

job description [analyze the job and determine selection criteria]

~job descriptions guide firms recruiting efforts, guide design of sales training program, serve as standards for evaluating salespersons job performance ~good job descriptions of sales jobs typically identify (1) nature of product/service being sold (2) types of customers to be called on [including policies concerning how often calls are to be made and who should be contacted] (3) specific tasks and responsibilities to be carried out (4) relationships b/w job occupant and other positions within org (5) mental and physical demands of job (6) environmental pressures and constraints that might influence job performance

satisfaction

~job satisfaction refers to characteristics of job that salespeople find rewarding ~satisfaction is a complex attitude and salespeople can be satisfied/dissatisfied with many diff aspects of the job ~dimensions of job satisfaction- the job itself, pay, company policies and support, supervision, co workers, promotion and advancement opportunities, customers ~salespeoples satisfaction is also influenced by their role perceptions [people who perceive great deal of conflict in job demands tend to be less satisfied] ~job satisfaction is likely to affect motivation to perform

problems w/ subjective performance measurement

~lack of outcome focus- simply identified attributes thought to be related to performance w/o systematically assessing whether the attributes actually are critical ~ill defined personality traits- personality factors are appealing to evaluate on but their actual relationship to performance is questionable ~halo effect- rating assigned to one characteristic may significantly influence ratings assigned to all other characteristics ~leniency or harshness- some sales managers rate at extremes [diff managers use of diff definitions of performance can undermine whole performance appraisal system] ~central tendency- some managers rarely rate people at the ends of the scale [reveal very little about true differences in performance] ~interpersonal bias- perceptions of peoples behaviors are influenced by how much we like/dislike their personality ~organizational uses influence- when appraisals are used for development of employees managers pinpoint weaknesses more freely [if appraisals are used for promotions managers may be more lenient] ~outcome bias- when sales manager allows outcome of reps decision to overly influence their performance ratings

incentive and compensation policies

~management policies concerning rewards (such as recognition or promotion) can influence desirability of such rewards in salespersons mind [if lots of people get recognition each year this may not be a motivation b/c it doesnt seem special] ~if rewards are perceived to be not fair it can impact wide range of employees attitudes and motivations ~reward mix- relative emphasis placed on salary vs commissions or other incentive pay [likely to influence salespersons value estimates of certain rewards and help determine which job activities and types of performance they will put the greatest effort]

why is motivation important

~managers try to find right mix of motivation elements to direct salespeople to do certain activities but rewards that motivate one salesperson may not motivate another ~salespersons motivation is not directly under sales managers control but it can be influenced by things the sale manager does [such as how they supervise or reward the individual]

motivation (how managers influence performance)

~may influence salespeoples performance indirectly by affecting interest in company rewards and size/accuracy of their expectancies and instrumentalities ~managers can attain good performance by increasing personal rewards and making path to those rewards easier to follow (providing instructions and training, reducing roadblocks, increasing opportunities for personal satisfaction) ~the more accurate salespeoples role perceptions are the more motivated they are likely to be ~the more frequent the communication b/w salesperson and manager the less role ambiguity the salespeople are likely to experience (and the more accurate their instrumentalities are)

psychological tests

~measuring applicants mental abilities and personality traits ~intelligence tests- determining whether applicant has sufficient mental ability to perform job successfully [how well you comprehend, reason and learn] ~aptitude tests- determine whether applicant has interest in or ability to perform certain tasks and activities [instead of measuring persons native abilities they measure current skill level at certain tasks- some skills can be taught or improved through training programs] ~personality tests- contain many questions, require substantial time to complete, gather info about some traits irrelevant to evaluating salespeople ~reasonably intelligent person can fudge results by giving answers they think mgt wants to here rather than answers that reflect applicant [view testing as extensive burden and invasion of privacy]

measurement criteria

~measuring what participants learned is not enough b/c obtained knowledge may not produce desired behavior changes ~specify objectives and content of sales training program, criteria used to evaluate program, design of research so benefits can be ambiguously determined ~reaction (did participants respond favorably to the program?), learning (did participants learn concepts or skills?), behavior (did participants change their on the job behavior?), results (what personal or organizational results occurred?)

deciding on the mix and level of compensation

~mix of rewards that motivates a sales force at one time ay lose its appeal as members personal circumstances and needs change and as new salespeople are hired ~decision about how much total compensation salesperson may earn is crucial in designing effective motivation program [determine gross amount of compensation necessary to attract/retain/motivate salespeople] ~smaller firms cant afford extensive training programs so may have to offer above average compensation to attract experienced sales reps from other firms

when is a sale a sale

~most incentive plans credit a salesperson w/ a sale when the order is accepted by the company less any returns and allowances ~sometimes credit when goods have been shipped or payment has been received by customer [shipment of goods is long and company wants salespeople to maintain close contact w/ customers to prevent cancellations]

external sources [find and attract applicants]

~most of the time there wont be enough qualified internal candidates to meet needs of sales force ~(1) referral of people from other firms- current salespeople know requirements of job, often have contacts w/ other salespeople who may be willing to change jobs, and can help sell available job to potential recruits ~(2) advertisements- ads are placed in newspapers to attract applicants for less demanding sales jobs that dont require specific qualifications ~(3) professional recruiting agencies- these specialize in finding applicants for more demanding sales jobs [when company clearly understands demands of job and knows the kind of candidates its looking for these orgs can be helpful] ~(4) universities- effective source when sales job is viewed as first step towards career in mgt [college graduates have less selling experience and require orientation and training] [also tend to job hop unless jobs are challenging or promotions are rapid] ~(5) internet- unique aspect of sales coupled with need to meet and interview individuals in person make internet difficult for recruiting purposes [good screening device since large number of applicants can be processed easily]

develop and implement the program

~must decide whether training program is in house or hire an outside org ~large companies develop most of their own programs where small companies often use outside training professionals ~evaluate previous training program methods, consider costs/benefits of various training methods, establish training budget, develop training materials, train the sales trainers, establish timing, select locations

personal variables

~personal variables (such as job experience, managers interaction style, performance feedback) affect amount of role conflict and ambiguity salespeople perceive ~desire for job related rewards (higher pay/promotion) differs w/ demographic characteristics such as age, education, family size, career stage, organizational climate ~as role of salespeople has evolved into building and maintaining relationships they are now asked to engage in organizational citizenship behaviors (being good corporate citizens) ~org citizenship behaviors encompass sportsmanship [willingness to endure less than optimum conditions w/o complaining], civic virtue [making recommendations to management that will improve overall performance of org], conscientiousness [willingness to work beyond normal expectations of job] and altruism [helping others in org] ~salespeople who engage in these activities perform better on both outcome based measures and behavior based measures

when should a salesperson receive incentive payments

~plans offering salary plus commission were more likely to involve monthly incentive payments while salary plus bonus plans more often made incentive payments on annual schedule ~short intervals b/w performance and receipt of rewards increase motivating power of plan [but increase administrative expenses and make absolute amount of money received appear small so salespeople are not impressed w/ rewards]

pros and cons of hiring salespeople from competitors

~pros- (1) reduce learning curve [take less time to get up to speed and selling for company since they already know industry and are familiar w/ products having sold against them in the past] (2) external motivator [hiring salespeople from competitors motivates current salespeople to demonstrate they are better than new hire] (3) knowledge base [much of knowledge of experienced salespeople bring to the table is not easily trained and rather is the result of spending time in the field] ~cons- (1) square peg in round hole [assimilating competitors into company culture can be difficult- have to unlearn what they currently know and adapt to new culture] (2) customer trust [salesperson suddenly switches companies and argues that new products do better job of meeting customers needs] (3) short term vs long term strategy [hiring competitors offer short term benefits (lower training costs, reduced learning curve) but they are less loyal and have potential to create cultural conflict]

dangers of paying salespeople too much

~rationale is that it will attract the best talent and motivate sales reps to continue working for higher and higher sales volumes ~overpaying increases selling costs and reduces profits, cause resentment and low morale among firms other employees, becomes impossible to promote good salespeople into management b/c then they would be payed less ~at some compensation level the next dollar earned would likely show diminishing returns in terms of motivation

role perceptions

~role of salesperson is set of activities to be performed by anyone occupying that position ~role is defined through expectations, demands and pressures communicated to salesperson by the role partners (parters include people both outside and within firm who have vested interest in how salesperson performs job) ~role perceptions component has 3 dimensions- perceived role conflict, perceived role ambiguity, and role inaccuracy ~perceived role conflict arises when a salesperson believes the role demands by 2 or more of their role partners are incompatible [so cant satisfy them all at the same time] ~perceived role ambiguity- occurs when salesperson believes they dont have info necessary to perform job adequately [ex: uncertain about what some role partners expect in certain situations] ~role inaccuracy- degree to which salespersons perceptions of demands from role partners are not accurate [salespersons belief is wrong but they dont realize this]

why are role perceptions important

~role perceptions can produce dissatisfaction with the job [can also affect salespersons motivation] ~role stress (role conflict and ambiguity) doesnt necessarily imply a negative job outcome (quitting) ~a certain degree of role conflict and ambiguity enables salespeople to make creative decisions ~B2B salespeople are particularly vulnerable to role stress [since they spend so much time with customers] ~personal factors (such as traveling, work demands) and organizational factors (such as infrequent meeting w/ supervisor) can affect peoples role perceptions [these factors can be controlled by sales management policies]

components and objectives of financial compensation plans

~salary- motivate effort on nonselling activities, adjust for differences in territory potential, reward experience and competence ~commissions- motivate high level of selling effort, encourage sales success ~bonuses- direct effort toward strategic objectives, provide additional rewards for top performers, encourage sales success ~sales contests- stimulate additional effort targeted at specific short term objectives ~benefits- satisfy salespeoples security needs, match competitive offers

sales aptitude

~sales ability is though to be a function of (1) physical factors such as age and attractiveness (2) aptitude factors such as verbal intelligence and sales expertise (3) personality characteristics [empathy and sociability] ~most managers believe that things a firm does to train and develop its salespeople are most critical determinants of success but many also believe certain basic personal traits (strong ego, self confidence, drive to achieve, etc) are requirements

other types of compensation

~sales contests- require clearly defined specific objectives, an exciting theme, reasonable prob of rewards for all salespeople, attractive rewards, promotion of event by company and effective follow through [may hurt cohesiveness and morale of sales force when they compete for rewards] ~expense accounts- expense reimbursement plans range from unlimited reimbursement for all reasonable and allowable expenses to plans where salespeople must pay expenses out of total compensation ~nonfinancial rewards- (1) opportunities for advancement [to make advanced sales positions over management positions more attractive as promotions firms provide extra perks] (2) recognition programs

salespersons role perceptions (how salespeople influence performance)

~sales managers job is to create environment that will stimulate and motivate salespeople while reducing negative effects of role stress ~salespersons role is defined through 3 step process- role partners communicate expectations, salespeople develop perceptions, salespeople convert these perceptions into behaviors ~stage 1: role partners communicate expectations- role partners include reps immediate supervisor, other executives in firm, customers and members of customers orgs, salespersons family [they all try to influence persons behavior through org policies, operating procedures, training programs, social pressures, rewards and sanctions] ~stage 2: salespeople develop perceptions- salespeople perform according to what they think these individuals expect even when their perceptions are not accurate ~stage 3: salespeople convert perceptions to behavior- both job behavior and attitudes can be affected if there is role ambiguity or conflict

measuring the costs and benefits of sales training

~sales training is time consuming and costly activity [does it produce enough benefits to justify its existence?] ~sales training roadblocks- training cant solve the problem, your busy salespeople are not open to learning new skills, managers dont support the training system, conflicting methods and philosophies are taught at diff sessions, training isnt relevant to companys needs, training format doesnt fit the need, e learning is overused or used in the wrong situations, theres no follow up after training, trainer cant relate to sales team

role perceptions (how managers influence performance)

~sales training programs can prepare salespeople to deal w/ job related conflicts and ease tension ~when sales managers structure and define jobs salespeople seem to experience more conflict ~too close supervision decreases salespersons flexibility in dealing w/ diverse role expectations w/ which salespeople must contend ~give salespeople greater voice in what they do and how they do it to reduce role conflict ~close supervision may actually reduce role ambiguity but salespeople should have some influence over standards used to control and evaluate performance ~reduce role ambiguity by reducing number of people who report directly to sales manager [tends to make job related issues clearer to salespeople] ~close supervision can reduce ambiguity but it can increase role conflict and job dissatisfaction when salespeople feel they dont have enough latitude or enough creative input

straight salary, straight commission and combination plans

~seek to create pay for performance plan that uses both salary and incentive programs to maximize salespeoples performance ~answer questions when designing effective combination plans- (1) what is the appropriate size of the incentive relative to base salary (2) should a ceiling be imposed on incentive earnings (3) when should salesperson be credited w/ a sale (4) should team incentives be used [if so how should they be allocated among members of sales team] (5) how often should salesperson receive incentive payments ~straight salary- useful when compensating new reps, when firm moves into new sales territories that require developmental work, when sales reps must perform many nonselling activities [advantages- maximum security, easy to administer, yields predictable selling expenses] [disadvantages- provides no incentive, requires closer supervision of sales reps] ~straight commission- useful when highly aggressive selling is required, when nonselling tasks are minimized, when company cant closely control sales force activities [advantages- maximum incentive] [disadvantages- little financial security, manager has minimum control over sales force, selling costs are less predictable] ~combination- useful when sales territories have relatively similar sales potential, when firm wishes to provide incentive but still control sales activities

salespersons role is affected by many factors (how salespeople influence performance) [continued]

~selling in a team- inside salespeople and customer service reps create additional contact w/ customer that often requires greater coordination w/ field reps [this may create role conflict as salespeople deal w/ expectations and demands of many individuals in sales team and org as a whole] ~innovative role- as a result of innovative roles (frequently have to produce innovative solutions to nonroutine problems) salespeople tend to experience more conflict b/c they must have flexibility to perform at high level [authority to develop and carry out innovative solutions] [need for flexibility brings conflict w/ standard operations to maintain status quo] [face role ambiguity and inaccurate role perceptions b/c they face unusual situations where they have no standard procedures or past experience to guide them]

team vs individual incentives

~should incentives be tied to overall performance of entire team or should separate incentives be keyed to individual performance of each member ~if both group and individual incentives are used which should be given greater weight

sales skill levels

~skill levels are individuals learned proficiency at performing necessary tasks [include such learned abilities as interpersonal skills, leadership, technical knowledge, presentation skills] ~aptitude consists of enduring personal abilities while skills are proficiencies that can improve rapidly w/ learning and experience ~salespersons past selling experience and extensiveness and content of firms sales training programs influence skill level

360 degree feedback

~sources of feedback useful to salespeople are external customers, internal customers (people within your firm who may not have external customer contact but who nonetheless add value that will ultimately benefit external customers), other members of selling team, anyone who reports directly to sales manager, sales manager ~integrating feedback from these sources of performance info into formal evaluation process ~self evaluation- orgs should encourage salespeople to prepare honest assessment of their own performance against established objective and subjective performance criteria [this should be done before formal performance review with manager] ~when appraisals provide clear criteria whose development included input by salespeople (and appraisals are perceived as fair and used in determining rewards) salesperson job satisfaction increases

analyze the job and determine selection criteria

~steps- (1) conduct job analysis to determine what activities/tasks/responsibilities and environmental influences are involved in the job to be filled (2) write job description that details the findings of the job analysis (3) develop a statement of job qualifications that describe personal traits and abilities a person should have to perform the job ~responsibilities of given sales job changes as customers, firms account management policies, competition and other environmental factors change [companies need to conduct new analyses and update description to reflect changes]

overview of salesperson compensation and incentives

~the way the reward structure is implemented in a sales org is through the compensation plan ~questions that drive compensation plan- (1) which compensation method is most appropriate for motivating specific kinds of selling activities in specific selling situations (2) how much of a salespersons total compensation should be earned through incentives (3) what is the best mix of financial and nonfinancial compensations for motivating sales force ~salary adjustments are useful to reward salespeople for performing customer relationship building activities that may not directly result in sales in short term [help adjust for differences in sales potential across territories] ~incentive pay directs salepeoples efforts toward specific strategic objectives during the year as well as provide additional rewards for top performers ~commission is based on short term results so are useful for increasing reps selling efforts ~bonuses are usually additional incentives to motivate salespeople to reach high levels of performance rather than part of basic compensation plan ~nonfinancial incentives might take the form of opportunities for promotion or reconition

subjective measures of performance

~there is always bias when assessing qualitative performance factors [even well designed systems rely on personal judgment] ~manager rates salesperson on (1) sales results [volume of sales, sales to new accounts, selling of full product line] (2) job knowledge [knowledge of companys policies/prices/products] (3) management of territory [planning activities and calls, controlling expenses, handling reports and records] (4) customer and company relations [standing w/ customers/associates/company] (5) personal characteristics [initiative, appearance, personality, resourcefulness]

developing successful sales training programs

~top management may not be dedicated to sales training or training program may not be adequately funded [some salespeople resent intrusion on time and resist making changes suggested by training programs] ~training is viewed as cost of doing business rather than investment [management expects training to solve all companys sales problems and if problems arent resolved they will cut budget] ~too many training programs are conducted w/o any thought of measuring benefits [essential for management to evaluate benefits]

issues in sales training

~training should provide specific details about certain industries and teach salespeople how to develop close relationships w/ customers [expertise in product knowledge, specifications and applications] ~3 issues should be considered- who should be trained (new and/or experienced salespeople), what should be the primary emphasis in the training program (relationship building, product knowledge, company knowledge, customer knowledge, generic selling skills), how should the training process be structured (on the job training vs formal centralized program) ~sales training may be needed due to new product offerings, changes in market structure, new technologies, competitive activities, reinforce and upgrade critical selling skills, increase motivation

proportion of incentive pay to total compensation

~when firms primary selling approaches are for short term sales a large incentive component should be offered ~if particular combination plan is not very effective at motivating salespeople the incentive portion is probably too small to generate much interest ~individuals can choose proportion of incentives [people who want greater security can choose to half more base salary and vice versa]

training needs change with time

~when procedures or products change everyone should receive additional training ~training needs vary greatly based on individuals involved [if someone is having sales slump they may need training but salespeople not in a slump resent being included] ~new recruits- experienced recruits need less training than inexperienced but most firms require ever new hire to go through some formal training [length depends on philosophy of company- some companies think it should be spread over a long time and include a large dose of learning by doing] ~experienced salespeople- over time peoples knowledge of competitors and market conditions become dated and personal selling styles can become less effective [additional training occurs when sales rep is being considered for promotion of company policies/products change]