Category Archives: Sales Management – Part 2

Organisation Planning

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Introduction

1 These  notes discuss the different meanings of “Organisation” and “organise” and suggest using “Organisation Planning” as a term to describe a process which usually leads to a (formal) Organisation Structure. Organisation Planning involves six steps and the notes discuss each of these in turn.

2 They discuss the size of an “activity”, the listing and the grouping of activities, and include a detailed classification of grouping possibilities and how to use groupings to examine an Organisation Structure. The next step involves the organisation form and the notes discuss the following Organisation Structure forms: line, staff, line and staff, and committees.

3 The notes discuss (a) the problems of, and solutions to, the conflicts which arise from two-boss situations and (b) the level at which to introduce Staff Authority [1]. They discuss the need for positions, their number, the relationship of span of control to number of position levels, and centralisation versus decentralisation. They then discuss defining the work and position authority of each position and assigning appropriate individuals to each position.’

4 The notes conclude with a discussion on informal organisations and the inevitability of Organisation Structures.

Different Meanings for “Organisation” and “Organise”

Some Meanings for Organisation

5 Organisation has, at least, the following three meanings -

(a) a group of people (and resources) with a common objective

(b) the managerial structure of an Organisation

(c) the quality of coordination achieved between the various elements of a group.

[1] Readers should contrast Position Authority (Authority arranged by the Organisation) with Personal Authority (Authority given to a person by another) – not because of the Person’s official position in a group. The notes on this topic: ‘Some Important Elements in Delegation” provide many more details. Continue reading →

Supervising a Sales Force

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Introduction

1 Managers supervise Sales Representatives to – Improve the probability that they will make sales. This objective should imply profitable sales; but not all Managers seem to appreciate this point. Managers should remem­ber that Sales Representatives can sell a product at a loss if the Repre­sentative spends a very high proportion of their time selling one Prospect who has a low potential for future sales.

2 This situation occurs less often in the retail selling field, but even here the technique of tactfully and pleasantly disengaging oneself from the “window-shopping” type proves valuable.

The Need for Supervision

3 Even if all Sales Representatives had appropriate motivation and could see their own selling faults, the need would still exist for someone to decide what each Representative should do in relation to all other person­nel – in order that the Company achieves its Sales objectives.

4 Supervision primarily entails giving direction to each person’s work and in relation to the work of others. It should ensure that people do what they should do and do not do useless things or activities which harm over­all Company objectives. Good supervision will also: (a) provide guidance to improve the abilities and activities of Sales Representatives in their work and (b) encourage and help them so that they can more easily help themselves.

5   Sales Representatives have difficulties peculiar to their occupation since most of their work involves dealing with other people. Success or failure in a sale depends on decisions made by other people. While Repre­sentatives can influence the decisions they must face rebuffs, disappoint­ments, rudeness, and “brush-offs”. Supervisors need to offer encouragement and support to maintain high morale in their Sales force.

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Sales Territories

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Introduction

1 Sales Representatives need some direction in the way in which they should work. Without some direction, Representatives may duplicate work or ignore some objectives because no-one knows who should try to achieve them. However Managers who want to help Sales Representatives improve their performance should know what work their Sales Representatives should do ¬in order to assess success or failure. A territory or work area provides one key idea in assigning work to Sales Representatives.

A Meaning For Sales Territory

2 A sales territory consists of the places, people, or organisations within a specified area from which a sales representative has the right to seek business.

3 Often Sales Representatives can approach anyone within a geographical area. Sometimes restrictions exist and they can only approach some people and/or some Organisations.

4 Example. Harry, a Representative has the right to approach all textile manufacturers (or all Hotels or all Doctors or all Retail¬ers) as long as these businesses (and/or people) operate within his territorial boundaries.

5 The definition of a Sales Territory given above shows that two Sales Representatives can have different territories even though each territory has the same geographical area.

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Coaching Sales Representatives after a Call – A Few Principles

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A Meaning For Kerbside Coaching

1 The term “Kerbside Coaching” refers to the training which a Supervisor (or Sales Manager) carries out immediately following a sales call. It occurs when a Representative has just spoken to a Prospect/Customer and the Supervisor has observed the Representative’s behaviour and aims to improve the Representative’s performance in future selling situation.

2 Nowadays Supervisors will probably coach their Representatives while sitting in a car rather than “on a kerb”.

Some Principles Of Coaching

3 The following principles should help Coaches and Representatives gain benefits from coaching attempts.

Observe the Sales Call Carefully

4 Supervisors who wish to coach wisely and effectively will need to ob­serve the sales call carefully.

5 Further, Coaches will provide Representatives with a particular advan­tage if they can perceive things that others (particularly the Sales Repre­sentatives) do not perceive. In addition they will need to see relation­ships between things which others do not perceive or have a lower probabil­ity of perceiving.

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Records and Reports – An Aid to managing Representatives A

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Introduction

1 Reports and Records offer a useful aid to managing Sales Representa­tives.

2 A variety of reports exist which a Company may ask its Representatives to complete and send to their Manager or the Sales Office. Sales Managers should design reports to suit the needs of their particular Company since a report that helps one Company may not help another. No standard terms exist for naming such reports; many reports which serve essentially the same purpose have different titles.

3 These notes divide reports into:

(a) Routine reports dealing with individual Customers or Prospects

(b) Special reports on individual Customers and/or Prospects

(c) Reports related to the territory as a whole.

Routine Reports Concerning Individual Customers and/or Prospects Daily Call Reports

4 Every time Representatives contact a Prospect or Customer (by whatever means), they make a “call”. A record of what happened on each call will help Representatives analyse and review their work and have a record to help plan future calls. Further, it allows Representatives to build up Customer cards with all useful facts concerning past and potential sales and any other information which will help them sell better.

5 The form of this record will vary depending on whether Representatives (a) prepare a separate report for each call or (b) record all calls for a specified period (usually a day) one after the other on the same form.

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Control of Expenses

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Introduction

1 In carrying out their everyday work most outdoor Sales-Representatives incur expenses of some sort. Sometimes Managers neglect the control of Selling Expenses; however, they should not, because it costs a significant amount to keep Representatives.

The Need for Control

2 With business in general, reduction in overhead and increase in produc­tion without a proportionate increase in overhead, provide two methods of reducing unit costs. Most cost-conscious organisations aim for both meth­ods. Sales Managers should take the same approach. They should aim to reduce the cost of sales, while at the same time increasing the quantity of sales. Achievement of these objectives can give a substantial reduction in the sales expense per sales dollar.

3 Limits exist to this approach since too stringent a control of a Sales-Representative’s expenses may result in the Representative’s feeling “restricted” and developing a negative attitude. However, if Managers control expenses fairly and firmly, the Representatives morale need not suffer – in fact, it can be improved because of the respect they develop for their Managers. To achieve this improved morale, as well as to ensure effective operation of the expense control procedures, Companies should train their Representatives to recognise the need for control and to rea­lise the benefit which this control and the resulting improved competitive position of their Company must bring to them as Representatives. If the Company have a rational control system it can show Representatives the benefits and avoid any tendency for them to feel restricted. This training must accompany all cost-control procedures – particularly where they repre­sent a change from established practice.

4 Some Sales Executives do not favour the questioning of Sales- Represen­tatives’ expenses. This attitude has allowed expenses in some Companies to become excessive. Incentive rewards for Sales-Representatives who achieve low expenses per sales dollar provide a means of reinforcing effective training and encouraging cost-consciousness. For many Representatives the very use of a cost-control system implies that their Managers do not trust them, but the fact remains that one of the aims of an expense control system must discourage false claims by Sales- Representatives. People can argue that if an expense-control system does not do this job, Sales Manag­ers should not provide the Sales- Representatives with the temptation to use their expense accounts dishonestly. However, it does not prevent faked claims.

5 Example. Usually Companies make reimbursements dependent upon the showing of receipts particularly in respect of hotel and car expenses but people can fake these. The cost of close checking on these expenses and receipts could well exceed the amount which the Company could save through discovery of dishonest claims.  The need for control rates as ethical as well as financial, and while individual solutions to the problem exist, every Sales Manager should know that the problem does exist.

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Motivation and Sales Representatves

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Introduction

1 How well Sales Representatives perform depends on many factors. One major one involves just how much they want to succeed. The term “motiva­tion” describes this factor. In broad terms it means the drive to perform any activity.* The term “motivating Sales Representatives” describes the efforts made to make their desire to succeed in their position as strong as possible and to maintain it at that level.

2 One approach to achieving appropriate motivation patterns in Representa­tives involves giving them the opportunity to satisfy their needs.

The Needs Of Sales Representatives

3 Every individual strives to satisfy certain needs. A knowledge of the particular needs characteristic of Sales Representatives as a group will help Sales Managers who wish to achieve an appropriate motivational pattern for their Representatives. Most Sales Representatives will want to satisfy several or all of these needs listed below:

(a) Self-Respect – Most people need to respect themselves. Represen­tatives who rate their work as important and who believe they repre­sent a worthwhile Company and sell a worthwhile product will feel more satisfied with their job than people without this feeling/belief.

(b) The Respect of Others – This need related to a person’s status, prestige, and standing in the community.

(c) Self Expression – Most people like the chance to express them selves to others.

(d) Job Satisfaction – People need to class their work as interesting and useful.

(e) Opportunity – People do not like to feel they work in a “dead-end job” – they like to have something to which they can strive.

(f) Security – This need relates to feeling relaxed, happy and unwor­ried in situations. Representatives who believe they may lose their job or work in a situation where they receive conflicting instruc­tions will feel insecure.

(g) Competition – Many people like the opportunity to compete against others and to excel in their chosen field. However, too much competi­tion and repeated failure in competitive situations will not help a Sales Representative to feel secure.

* See the  Notes on: “Definition: Motivating” for a de­tailed discussion of the term “Motivation”.

 (h) Self Determination – most Representatives will like a position where they can take part in the planning of their own activities, i.e. they like to have some say in their own destiny.

(i) Adequate Remuneration.   Usually Representatives compare them‑
selves with others who do the same job. Provided they get the same as these others, usually they feel satisfied.

Importance of Motivation

4 The work of many Sales Representatives involves knock backs and disap­pointments. After a good deal of hard work someone else can beat them to a sale. They can lose a good Customer. A continuing decision to keep striv­ing will prove necessary to help them overcome these difficulties. Even when Sales Representatives have made their quota of sales, they still require an appropriate motivation to make the one extra call and to prepare their reports accurately and on time. Some Representatives feel uninter­ested and apathetic about their work. They see it as a means of livelihood and no more. Thus their job satisfies only one of their needs. An appro­priate change to their motivated pattern can release a vast reserve of productive energy which can increase sales.

The Importance of Attitudes

5 The attitudes of Sales Representatives toward their work, towards peo­ple, and towards their company and its products rates as particularly important. Sales Representatives with a suitable motivational pattern will have the right attitudes, prejudices, and manner of thinking. Sales Repre­sentatives with marked prejudices carry a handicap. They will find some people they cannot easily like. Often this attitude makes it harder to sell to these people – and, if they sense the prejudice, nearly impossible.

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How to pay Sales Repesentatives

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Introduction

1 Money acts as an important motivating factor for Representatives ­especially if their remuneration falls below what they rate as an accept­able level. Representatives who feel inadequately paid will feel discon­tented and will not put their full effort into their job.

2 In some selling situations, Representatives have a major effect on their remuneration i.e. the effort they put forward has a definite effect on how many sales they make. In this case, Companies should link their pay system to sales made. Where they achieve this linkage, they have a high chance of producing a high motivation for the Companies objectives and a high morale in their Sales team.

Some Objectives for Useful Payment Plan

3 A useful plan for payment of Sales Representatives should:

(a) Encourage Representatives to make maximum profitable sales

(b) Help establish a hardworking sales force with high morale.

(c) Strengthen the Company’s short-term and long-term position in the market.

(d) Prove simple and flexible.

(e) Assure Representatives that they will receive a total remunera­tion in line with their performance and fair in relation to that received by other Sales Representatives.

(f) Discourage bad selling (e.g. overstocking Customers, selling to bad credit risks, making unwarranted claims, or making promises which relevant people do not keep).

4 The above general objectives of a useful payment plan need additional specific objectives. In a particular Company, Managers need to decide for what activities they will reward Sales Representatives so they may concen­trate on these activities at the expense of other requirements. Any plan should encourage Representatives to concentrate on the important factors in the situation. Usually a number of such factors exist and Managers should give each one appropriate weight.

5 If Representatives’ remuneration depends on their success in some aspect of the sales task, Organisations should know how to measure accurately their performance in the relevant areas.

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Sales Contests

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Introduction

1 Most people in our culture respond to a challenge or competition ­particularly if they answer the challenge successfully and it leads to a feeling of personal satisfaction. A Sales Contest aims to make use of this aspect of Sales Representatives.

Objectives of Sales Contests

2 Most Sales Contest aim to increase sales; but they can have other objec­tives such as better/neater reports, more distribution of more products in more outlets, better gross margins, opening of new accounts.

Planning a Sales Contest

3 To some extent, the value of contests depends on just how well someone plans the whole contest. Faults of the following type will spoil contests: the contest methods do not really achieve the contest objective; no plans made on how to announce the contest to Contestants or keep them informed; rules do not allow each Contestant about the same chance of winning a prize.

4 Organisers of contests should aim to clearly inform all sales personnel about the particular contest particularly the( clearly-defined) conditions and limits which will govern the whole contest.

5 Each contestant should know:

(a) the purpose of the contest,

(b) how the organisers will assess each individual’s contribution,

(c) what constitutes a sale (if relevant),

(d) the number of points awarded for a sale (if the contest uses this approach),

(e) whether additional points come from volume,

(f) the standard performance

(g) the rewards and prizes.

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