STRATEGIC SALES FORCE
Learning Objectives:
To understand the importance of
establishing a Sales territory and Strategic
Sales Force Management.
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• 9.1 Introduction
• Today, most companies use sales people to bring their
company’s offering to the consuming or business publics.
The salesperson’s role is a key one in the organization. The
high cost of maintaining a sales force means that the
management is especially interested in how to efficiently
organize this vital element.
•
• Managing the sales force involves recruiting the right
number for the sales force, proper designing of the sales
territory which can lead to higher sales and profitability of
the organization with proper control on the cost.
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• Sales force management is the analysis,
planning, implementation, and control of sales
force activities. It includes:
• 1.Designing sales force strategy and structure
• 2. Recruiting, selecting
• 3. Training
• 4. Compensating
• 5.Supervising
• 6. Evaluating the firm's salespeople:
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• 1.Designing sales force strategy and structure : Each
company should select a sales force structure that
best serves the needs of its customers and fits its
overall marketing strategy. Salespeople constitute
one of the most productive and most expensive
assets of the company.
• Most companies use some form of workload
approach to determine sales force size. The workload
approach is an approach of setting sales force size,
whereby the company groups count into different
sizes and classes (or status) and then determines how
many salespeople are needed to call.
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• 2. Recruiting, selecting :
• Careful salesperson selection can greatly
increase overall sales force performance. A
good salesperson should have the following
qualities:
• a). Enthusiasm.
• b). Persistence.
• c). Initiative.
• d). Self-confidence.
• e). Job commitment.
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• 3. Training:
• Training programs usually have the following goals:
• a). To help salespeople to know and identify with the
company.
• b).To knows how products are developed and how
they work.
• c). To know about the competitor's strategies and
customer's characteristics.
• d). To learn how to make effective presentations.
• e). To understand field procedures and
responsibilities
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• Some final points in training include:
• • Encourage and motivate your sales staff through
enthusiasm and on-target information.
• • Keep it lively!
• • Provide useful information, and make sure they
understand why it is useful.
• • Make it specific.
• • Make future sessions build on techniques learned
from preceding sessions.
• • Have a reward system for those reps who have used
the new techniques and been successful.
• • Set up regularly scheduled training sessions.
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• 4. Compensating:
• To attract salespeople, a company must have an
appealing compensation plan. Compensation is made up
of the several elements:
• a). A fixed amount, usually a salary, gives the salesperson
a more stable income.
• b). A variable amount, which might be commissions or
bonuses, rewards for a sales- person for greater effort. c).
Expense allowances (which repay salespeople for jobrelated expenses) let salespeople undertake needed and
desirable selling efforts.
• d). Fringe benefits provide job security and satisfaction.
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• 5.Supervising:
• Through supervision, the company directs and
motivates the sales force to do a better job. The
company can use several positive incentives to
increase the sales force effort
• a). Sales meetings provide social occasions, breaks
from routine, chances to meet and talk with company
managers, and opportunities to air feelings and to
identify with a larger group.
• b). Sales contests can also be used to spur the salesforce to make a selling effort above what would
normally be expected. Incentives could be given.
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• 6. Evaluating the firm's salespeople:
• Evaluating the salespeople is an important
process in the sales force management
function. Evaluating your sales team's
performance is key to ensuring that your
team is ready to deliver maximum
performance and results.
This process
requires good feedback.
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• 9.2 How to design a sales territory?
• Territory planning, the design of your territories,
and how those sales territories are managed is
crucial to sales management success.
• The allocation of sales territories is often based
on criteria that have little to do with the proven
effectiveness of the sales reps. As a result,
resources are poorly allocated and revenue
targets are missed. Territories should be
designed such that your best sales person work
in the territories with the most potential.
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• Sales territories planning and design are very
useful for the following factors:
• • Sales territories allows the CMO to reduce
your sales cost. It also gives the sales force
defined
areas
of
accountability
and
responsibility.
• • Sales territory also gives you a data point to
evaluate sales performance and provides a
structure to maximize sales coverage. It can also
improve the customer experience by providing
relationship consistency.
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• Marketing managers face several sales force
strategy and design questions.
• To reduce time demands on their outside
sales forces, many companies have increased
the size of their inside sales forces and have
added:
• 1). Technical support people.
• 2). Sales assistants.
• 3). Telemarketers
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• The days when a single salesperson handled
large and important customers are vanishing.
Today, team selling, using teams of people
from sales, marketing, engineering, finance,
technical support, and even upper
management to service large, complex
accounts, is being used.
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• Sales opportunities and market conditions are
never same across the country. The changing
market conditions pose challenging questions to
the Sales Manager for designing a perfect sales
territory in a heterogeneous market.
• A company’s territorial structure is influenced by
the potential business in the market and based
on the potential business, the number of sales
people required, is worked out.
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• In territory planning, one has to keep in mind the
tremendous effect your territory design can have and
one has to also get the answers for the following
questions.
• Does the design provide an equal work load for each
member of the sales team?
• Does the territory design provide for adequate
income opportunities?
• Does the territory design provide a good distribution
of existing accounts?
• Does the territory design allow easy travel time
management?
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• Your goal should be to provide your sales people with
an energetic and motivating environment. If the
territory design does not provide the balance, then
there is a danger of destruction of motivation and
good will that is already built.
• When designing sales territories, the first step is to
select a geographical control unit as a territorial base.
Territorial sales force structure is a sales force
organization that assigns each salesperson to an
exclusive geographic area and sells the company's full
line products and services to all customers in that
territory.
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• The second step would be to determine the location
and potential of present and prospective customers
within each selected control unit with the help of
sources such as customer database, classified
telephone directories, trade directories, city
directories etc.
• The third step is to combine small geographic areas
based on the number of calls a sales person is
expected to make. One can even break down the
whole market into equal segment and appoint a sales
person for managing each segment.
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• The final step is like a review mechanism in
which the tentative territories may require some
modification or adjustment to cover the
difficulty faced in reaching to the maximum
customers and other special considerations.
• Sales managers are also using computers and
mapping softwares to design and realign their
sales territory. This methodology helps in indepth understanding of the sales territory and in
presenting it in a easy to understand graphical
way.
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• 9.3 Assigning sales people to territories:
• In today’s complex selling situation, the
presence of ideal sales person in a specific
territory is not always possible. Each sales
person has unique sales ability and there is
no guarantee that just because a sales person
was successful in one territory, he will also be
successful in another territory as well.
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• The sales person also varies in age, experience,
effectiveness, physical fitness, initiative,
creativity, communication skills, soft skills and
selling skills as well. The local customs, customer
preferences and background can also influence
the sales performance. Some sales persons can
handle large territories while some are suitable
only for the new sales persons. Some sales
territory are intentionally designed with
unequal
size
to
give
flexibility
for
accommodating all types of sales persons.
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• Based on the abilities and track record of the sales
person, sales territories are assigned to individual
sales person. Sales persons are required to assess the
sales potential and accordingly bring it to the notice
of sales manager for revising the sales territory and
remove out-of-date measures.
• After assigning a sales territory to a sales person a sales
plan should be put in paper to direct the sales person
as to how he should cover his territory. In addition to
routing sales persons, the sales plan should also focus
on scheduling their time as mismanagement of time
can give rise to increase in field selling costs.
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• The best way to design a routing plan is to
determine the daily call rates and desired call
frequency on the basis of present and
prospective customers spotted on a map of
the territory. Some of the commonly used
route patterns are the straight line, circular,
clover leaf, wedge and hopscotch patterns.
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• Many sales persons are now entering and
transmitting call reports on their smart phones,
tablets and even personal computers. The
central data base makes use of analytical tools
and sends useful reports to assist the sales
person in choosing the most promising
prospects, selecting the best approaches and
gaining some knowledge of the prospects
needed before the call. The sales person can
also plan for cross selling by marketing either his
own products or third party products.
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• 9.4 Advantages of a sales territory :
• The sales manager can plan better market coverage, effective
deployment of sales force and efficient distribution of work load
as well. The performance of the sales force can also be evaluated
and the sales territories may also be revised if need be. The
proper design of sales territory also helps the company to control
both direct costs and indirect costs. There is great opportunity of
serving the customers better because of restricting the sales force
to a specific geographic location. Sales people understand the
customer behavior and their decision making process and rates of
consumption. In case of smaller potentials of sales, the sales
manager makes use of advertising and sales promotions for
creating a demand and enhancing sales in their territory.
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• Sales territories also have tremendous
impact on:
• (a) The sales manager’s ability to target key
customers and prospects.
• (b) The results of one’s sale efforts
• (c) The wellbeing and success of each of the
sales people.
• (d) The future of the company
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• 9.5 When is it that a company does not design a Sales
territory?
• A scientific sales territory is generally designed by big
companies. Small or medium sized companies may
not plan sales territories but must try to connect with
customers on the basis of personal relationships.
Some of the branches may be scattered over a vast
geographic regions and hence it may not be possible
to plan out sales territories in such vast regions. If the
customers are to be tapped at multiple locations then
the concept of sales territory may not hold good.
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• With this we complete our session on
chapter 9 ‘STRATEGIC SALES FORCE’.
Next we move to Chapter 10
‘Sales Force Motivation and
Compensation’
’
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