Sales Force Management
Sales force management is the process of efficiently and effectively making sales through the planning, coordination, and supervision of others. Effective sales management involves a wide range of activities, including planning; organizing, recruiting, and selecting sales personnel; enabling and motivating the sales force to sell (e.g., training, print materials or samples); supervising and coordinating sales efforts (e.g., assigning territories or routes); and controlling and monitoring the sales force. Two types of control systems are typically used in sales force management: outcome-based and behavior-based. Both approaches have advantages and disadvantages due to the inherent nature of the sales job. Ethics is becoming an increasing concern in many sales departments. However, the treatment of ethical violations is not always consistent across high- and low-performing sales personnel.
Keywords: Commission; Control System; Criterion; Ethics; Job Description; Performance Assessment; Sales Management; Target Market
Sales Force Management
To the skilled salesperson, sales jobs can offer the potential to earn more than salaried jobs. On the other hand, sales jobs do not offer the security of a salaried job and, therefore, do not appeal to everyone. From a management point-of-view, the nature of sales jobs can make managing a sales force a different task in some ways than managing other groups of professionals in the workplace. In addition, the fact that much of a salesperson's work may be performed outside the office where s/he cannot be directly observed, makes the task of managing a sales force even more difficult.
Sales Force Management
In general, management can be defined as the process of efficiently and effectively accomplishing work through the coordination and supervision of others. Sales management is the process of efficiently and effectively making sales through the planning, coordination, and supervision of others. Effective sales management involves much more than performing administrative tasks to coordinate the activities of the sales force. To be effective, the management of a sales force must encompass a wide range of activities, including planning; organizing, recruiting, and selecting sales personnel; enabling and motivating the sales force to sell (e.g., training, print materials or samples); supervising and coordinating sales efforts (e.g., assigning territories or routes); and controlling and monitoring the sales force.
In order for a sales force to be effective, the objectives and activities of the sales function must be planned in such a way to make the best use possible of both the sales force and the marketing budget necessary to sell the organization's goods and services to potential customers. Activities involved in management planning for a sales force include understanding the qualifications, abilities, and experience of the sales force and how best to use the personnel and other resources of the sales function in the organization. The sales manager also needs to understand the demographics of the target market as well as its needs and motivations in order to better prepare the sales force for success. By better understanding the capabilities of the sales force and the needs of the prospective customers, the sales manager can better develop a plan that will leverage the strengths of the sales force and enable each individual member to reach his/her optimal sales potential. The launch of new product or significantly upgraded product may require a reassessment of strategy, including further training, adjustments to compensation, and potentially a change in sales force personnel. In addition to developing a sales plan to best meet the needs of the customers, the sales manager also needs to organize the sales force to best match the requirements of customers and potential customers on an ongoing basis to improve the effectiveness and efficiency of the sales force.
Management of an effective sales force is predicated on the training and development of sales personnel. To do this, one must first articulate what it is that the sales force needs to accomplish. This task involves developing a job description that specifies the duties and tasks related to a job. Job descriptions may also specify the knowledge, skills, and abilities necessary to do the job as well as the performance standards that differentiate acceptable from unacceptable performance. A well-developed job description will not only give the sales manager criteria against which to judge the performance of the individuals in the sales force, but will also give him/her a guide to selecting the best candidates for the sales force. To optimize the effectiveness of the sales force, the manager — typically in conjunction with the human resources function of the organization — is responsible for the training and development of sales personnel. Even if the sales force comprises experienced sales personnel who have worked in other organizations or with other products, sales training needs to include specifics about the way that sales are conducted in the current sales department as well as training on the details of the products or services being sold so that the sales force can accurately and adequately answer the questions of potential customers. Similarly, the sales force needs to receive updated training on any changes in organizational policy that affect them and on new information about the organization's products or services so that they can better do their jobs.
Just knowing how to do the sales job and knowing the product or service being sold are not enough to create an effective sales force, however. The sales force must also be motivated to perform. For this reason, many sales departments pay their sales personnel at least in part based on commission (a set fee or percentage of every sale made). Such financial incentives are one of the most common motivators for sales jobs. Sales commissions tend to be an effective motivator of superior sales performance because they tie rewards directly to performance on the job. However, financial incentives are not the only way to motivate sales personnel to perform. Other ways to motivate the sales staff are through connecting job performance with various perquisites such as a company car for making sales calls or trips or paid vacations for being a top seller. Other motivators include job security and status (such as through a promotion, job title, or other award or recognition).
Another important activity in sales force management is controlling the sales function and monitoring the activities of the sales staff to make sure that they are effective and successful. To do this, management must set performance objectives for the sales force as well as ways to help enable the sales force to meet those objectives. Some ways to do this include setting standards for behavior (e.g., number of sales calls required during a given period of time), implementing ways to collect data on how well the standards are being met and making sure that the data are collected, analyzing the data to determine where objectives are not being met and why, and determining a plan of action for correcting these situations.
Sales Force Behavior Moderation
Determining the best way to control the behavior of members of a sales force is a topic that has been debated in the literature for years. Two general approaches to sales force control systems — or the procedures by which an organization observes, guides, appraises, and rewards its employees — have been posited.
Outcome-Based Sales Force Control
The approach of outcome-based sales force control systems focuses on the final outcomes of the sales process (e.g., whether or not a sale was made, total revenues earned by a salesperson in a given period of time). Whether or not a salesperson has met outcome-based standards tends to be both objective and clear: S/he either made the assigned sales quota for a time period or did not. In this way, outcome-based control systems for sales personnel are very similar to management objectives. Criteria of success are set ahead of time, and the employee knows the specifics of what constitutes acceptable behavior. As a result, outcome-based control systems for sales personnel tend to require relatively little monitoring or direction by management. Further, because they are results-oriented, outcome-based...
(The entire section is 3755 words.)