staffing the sales force 2

7/30/2019 Staffing the Sales Force 2

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ADJUSTING FOR COVERAGE DIFFICULTIES

AND REDISTRICTING TENTATIVE

TERRITORIES To remove unrealistic assumption that geographical control

units have similar characteristics.

Large cities have greater sales potential than states requiringlesser coverage time at lower expense.

Differences in coverage difficulty represent differences inworkloads.

Control units are taken away from difficult to cover territories andadded to easily covered territories.

Total workload in any territory must not exceed the MAXIMUM

DESIRABLE WORKLOAD.

Ultimately territories defined have varying amounts of salespotential and different-sized workloads.

Optimum territorial arrangement is reached when incrementalsales for marginal selling expense is equated in all territories.


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STEPS FOR REDISTRICTING

TERRITORIES Determine number, location and size of customers and

prospects in each tentative territory.

Estimate time required for each sales call.

Determine length of time between calls, i.e. time required totravel from one customer to the next.

Decide call frequencies.

Calculate the number of calls possible within a given period.

Adjust the number of calls possible during a given period by

the desired call frequencies for different classes of customersand prospects.

Finally check out the adjusted territories with sales personnelwho work or who have worked in each area and make furtheradjustments as required.


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DECIDING ASSIGNMENT OF SALES

PERSONNEL TO TERRITORIES

territorial planning implicit assumption is that all sales personsare average.

Sales personnel vary in ability, initiative & effectiveness as well

as in physical condition & energy.

Reasonable & desirable workload for each sales person candiffer.

Effectiveness can also vary with the territory assigned.

In assigning sales personnel to territories, management seeksthe most profitable alignment of SELLING EFFORT to SALES

OPPORTUNITY.

The principle is to Assign each sales person to the particularterritor where his/her relative contribution to rofit is hi hest.


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ILLUSTRATION OF ASSIGNING

SALES PERSONNEL TO

TERRITORIES


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Assignment of Sales Personnel to Territories of

Equal PotentialTerritory Potential Sales

Personassigned

Ability Predicted

Sales

Contributi

on (25 %of sales)

A 500,000 1 1.00 500,000 125,000

B 500,000 2 0.8 400,000 100,000

C 500,000 3 0.7 350,000 87,500

Total 1,500,00

0

1,250,00

0

312,500


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Assignment of Sales Personnel to Territories containing Sales

Potentials proportionate to Salespersons abilities

Territory Potential Sales

Personassigned

Ability Predicted

Sales

Contributi

on (25 %of sales)

A 600,000 1 1.00 600,000 150,000

B 480,000 2 0.8 384,000 96,000

C 420,000 3 0.7 294,000 73,500

Total 1,500,00

0

1,278,00

0

319,500


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Assignment of Sales Personnel to Territories

containing differential Sales Potentials


Personassigned

Ability Predicted

Sales

Contributi

on (25 %of sales)

A 1000,000 1 1.00 1,000,00

0

250,000

B 300,000 2 0.8 240,000 60,000

C 200,000 3 0.7 140,000 35,500

Total 1,500,000 1,380,00

0

345,000


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Assignment of Sales Personnel to Territories containing Sales

Potentials proportionate to Salespersons abilities


Personassigned

Ability Predicted

Sales

Contributi

on (25 %of sales)

A 600,000 2 0.9 540,000 135,000

B 480,000 1 1.0 280,000 120,000

C 420,000 3 0.7 294,000 73,500

Total 1,500,00

0

1,314,00

0

328,500


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Assignment of Sales Personnel

ToTerritories where Ability Indexes

vary with the Assignment.


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ROUTING AND SCHEDULING SALES

PERSONNELMaintain lines of communication

Optimize sales coverage

Detailed information is required on

the numbers & locations of customers

the means & methods of transportation connecting customer

concentrations trading area boundaries arising out of natural travel barriers

Minimize wasted time

Backtracking, travel time & non-selling time is reduced

NOTE: A sales person has a different route each time he travels in

a territory if he has to achieve the desired call frequencies and

to incorporate calls on new prospects.

Routing Scheduling & Control

Call reports are compared with route & call schedules.


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MOTIVATION Motivation is goal-directed behavior to achieve

NEEDS lack of something that reaching a goal could

satisfy

DESIRES positive ardor or strength of feeling

Aspects affecting quality of salespersons job and why

additional motivation is necessary:


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Inherent nature of Sales Job

Succession of ups & downs

Interaction with pleasant & courteous people on one extremeto unpleasant & rude people

Working time as well as after-work hours away from homemissing out on family life.

Salespersons boundary position & Role Conflicts

Conflict of Identification Customer or Company?

Advocacy ConflictIdentifies with & advocates customersposition to other groups in Company

Conflict in interests of customer & company versus owninterests of earning based on selling as much as possible.


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Tendency towards Apathy

Dealing with same customers in same territory over yearsleads to losing interest & enthusiasm

Familiarity on both sides leads to incomplete use of effectivetechniques.

Maintaining a group identity

Working alone most of the time team spirit is weak Participating in a cooperative endeavor requires motivation &

working conditions to promote group feeling for achievinggroup performance standards.


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NEED GRATIFICATION & MOTIVATION All human activity - including salespersons behavior is

directed towards satisfying certain needs.

Different patterns of behavior arise out of different sets of needs.

Particular persons behave according to the nature of theirfulfilled & unfulfilled needs.

PRIMARY NEEDS

Inborn and fulfillment is basic to life itself

Physiological needs like food, water, rest, sleep, air etc.

Until these are satisfied others have little motivationalinfluence.

SECONDARY NEEDS

Arise from individuals interaction with the environment

Develop with maturity

Include safety & security; belonging & social relations; self-esteem & self-respect.


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REQUIREMENTS OF A GOOD SALES

COMPENSATION PLAN Provides a living wage preferably a secure income

Does not conflict with motivational program belonging to ateam

Fair does not penalize for factors beyond the salespersons

control

Easy for sales personnel to understand

Adjusts pay to changes in performance

Economical to administer

Helps to attain objectives of the sales organization.


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DEVISING A SALES COMPENSATION

PLAN

Define the Sales Job

Consider the Companys General Compensation Structure

Use Job Evaluation systems to compare with different jobs

Job Evaluation procedure is not scientific but judgment based

Ranking / Ordering of jobs without considering individuals doingit

Purpose to arrive at fair compensation relationship amongst jobs.


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Contd Job Evaluation Methods:

Simple Ranking only overall appraisal Classification or Grading based on job responsibility, skills

required, supervision given & received, exposure tounfavorable / hazardous working conditions.

All jobs in same class or grade have same basecompensation.

Point System establishing & defining factors common tomost jobs e.g. mental & physical skills, responsibility,supervision given & received, personality required, minimumeducation required etc.

Each factor is given minimum & maximum points, the ranges

depending on the relative importance of the factors.Appraised factor scores are combined into total point valuesfor each job.

Different bands of point scores signify differentcompensation classes.


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Contd

Factor Comparison Methodresemblespoint system but uses a scheme of ranking & cross-comparisons.

Generally evaluated in value terms.

Job Evaluations are made whenever decisions are made

about the relative worth of jobs sometimes informally

Many sales executives feel sales personnel compensation

levels should be based on the external demand & supply

factors.


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Most companies choose various

combinations depending on their particular

selling situation. Proportions of different

elements vary most however split thefixed to variable elements on a 60:40 to

80:20 basis.


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Special Company Needs & Problems

A company can usually construct a plan, which increases marketingeffectiveness to solve specific problems like:

Emphasizing high margin products

To obtain large volume orders

More effort on non-selling activities like more displays / local advertisementsby dealers / retailers

Focusing on getting new customers

Controlling traveling & other expenses and making collections

Gathering market information & reporting.

Consult present Sales Force

Reduce tentative Plan to writing & pretest it

Normally pre-testing is done mathematically usually computerized re-working on past year/s data.

Revise the Plan

Implement the Plan & provide for Follow-up

Periodic checkups indicate needs if any for further adjustments /revisions.

TYPES OF COMPENSATION PLANS


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TYPES OF COMPENSATION PLANS

Straight Salary Plan

Fixed sum at regular intervals total payments for theirservices

Common amongst industrial goods companies; jobs

requiring extensive missionary / educational work; jobs

including servicing and providing technical & engineering

advice; salespersons doing considerable sales promotion /non-selling work; trade selling order-taking salespersons

Provides strong financial control over sales personnel and

management can direct their activities along most

productive lines with minimum opposition.

Provides stability of income & freedom from financialuncertainties to the sales personnel

Since there are no monetary incentives manysales peopleend up doing just an average job.

staffing the sales force 2

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