International Sales Management

Transcription

1 Athens University of Economics & Business International Sales Management Day Four: Sales management Dr Charalampos (Babis) Saridakis Associate Professor of Marketing University of Leeds Leeds University Business School

2 Day one: Sales perspective Development and role of selling in Marketing Subject Characteristics of personal selling Types of personal selling B2B vs B2C marketing and selling The personal selling process and approaches Characteristics of sales manager The sales management process The Business Philosophies and the Marketing concept The relationship between Sales and Marketing Sales strategies Subject The planning process The link among objectives, strategies, tactics The marketing plan The place of selling in the marketing plan

3 Day two: Sales environment Consumer and organisational buyer behaviour Subject Consumer decision making process Factors affecting the decision making process Organizational buyer roles and trends in B2B buying Sales settings Subject Environmental forces that impact on sales Sales channels characteristics Sales promotion, exhibitions, public relations

4 Day three: Sales technique Sales responsibilities and preparation Personal selling skills Key account management Relationship selling International selling Direct marketing Internet and IT applications in selling and sales Management Subject Key responsibilities and preparation of salespeople Subject Characteristics of salespeople Selling process Subject Definitions, Managing buyer-seller relationships Subject Transaction vs Relationship selling/marketing Subject Organization for international selling and cultural factors Subject Definitions, objectives, pros/cons Subject Internet objectives as a sales tool E-commerce and Web2 interfaces

5 Day four: Sales management Recruitment and selection Subject Stages in the recruitment and selection process Characteristics of successful salespeople Optimizing the recruitment process Side-effects of poor recruitment Motivation and training Subject Motivation theories Leadership styles and types of compensation Salesforce training planning and implementation Organisation and compensation Subject Sales organization concepts Alternative sales organization structures Salesforce size determination Salesforce compensation frameworks

6 Day five: Sales control Sales forecasting and budgeting Subject Sales forecasting process Qualitative forecasting methods Quantitative forecasting methods The budgetary process Salesforce evaluation Subject Salesforce evaluation process Evaluation criteria Outcome vs behavioural criteria Law and ethical issues Subject Ethical considerations in the sales domain

7 DAY FOUR: SALES MANAGEMENT

8 Learning objectives At the end of the discussion you should be able to: Appreciate that importance of salesperson selection. Apply selection procedures in the context of recruiting salespeople. Understand certain motivation theories in the context of selling. Organize suitable sales training programmes. Appreciate the advantages and disadvantages of the various salesforce organisation structures. Determine the number of salespeople needed and balance between various sales compensation plans.

9 Recruitment and selection

10 Stages in the recruitment & selection process

11 Qualities required of trainee and senior sales executives Source: Reprinted from Mathews, B. and Redman, T. (2001) Recruiting the wrong salespeople: are the job ads to blame?, Industrial Marketing Management, 30: Copyright 2001, with permission from Elsevier.

12 Successful salespeople High energy level Good physical appearance High self-confidence Likeable Need for material things Self-disciplined Hardworking Intelligent Requires little supervision Achievement oriented High perseverance Good communication skills Competitive

13 Recruitment/Selection process Step 1 Planning for Recruitment & Selection Step 2 Recruitment: Locating Prospective Candidates Step 3 Selection: Evaluation and Hiring Job Analysis Job Qualifications Job Description Recruitment & Selection Objectives Recruitment & Selection Strategy Internal Sources External Sources Screening Resumes and Applications Initial Interview Intensive Interview Testing Assessment Centers Background Investigation Physical Examination Selection Decision and Job Offer

14 Planning Job Analysis: An investigation of the tasks, duties, and responsibilities of the job. Job Qualifications: The aptitude, skills, knowledge, personal traits, and willingness to accept occupational conditions necessary to perform the job. Job Description: A written summary of the job containing title, duties, administrative relationships, types of products sold, customer types, and other significant requirements. Recruitment and Selection Objectives: What the organization hopes to accomplish as a result of the recruitment and selection process. They should be specifically stated for a given period. Recruitment and Selection Strategy: The plan that the organization will implement to accomplish the recruitment and selection objectives. The sales managers should consider the scope and timing of recruitment and selection.

15 Locating prospective candidates External Sources Advertisements Private employment agencies Universities Job fairs Professional societies Databases Internal Sources Employee referral programs Internships

16 Evaluation and hiring Screening CVs and applications Interviews Testing Assessment centers Background investigation Physical examination Selection decision and job offer CVs and applications Evidence of job qualifications Work history Salary history Accomplishments Responsibilities Appearance and completeness 3 main families of tests: Aptitude tests (intelligence tests or logic). Personality tests detect stable personality traits such as extraversion, seriousness, empathy, etc. Real life situation that place candidates in professional situations.

17 Interviews Types of interviews Initial interviews Intensive interviews Interviews are usually overrated More managers rely on interviews than any other selection tool Locations Recruiter s location Neutral site Telephone Objective is to predict future performance Correlation with future job performance Psychological tests = 0.53 Biographical info (applications) = 0.37 Reference checks = 0.26 Experience = 0.18 Personal interview ratings = 0.14

18 Interviews Other types of interviews :

19 Optimizing recruitment in 3 steps 1) Analyze the position: Main categories of tasks salespeople can carry out: Relationship selling, promotional activities and sales service, entertaining, prospecting, travel, training/recruiting, delivery, product support, educational activities, office and channel support 2) Provide a clear view of the job: Company, customers and environment, job title, position, roles and missions, relations with the rest of the company, development opportunities, working conditions, salary and other benefits offered, qualities sought 3) Match the candidate profile to the job: Always use the description of the job to establish the candidate specific profile

20 Poor recruitment can lead to Inadequate sales coverage and lack of customer follow-up Increased training costs to overcome deficiencies More supervisory problems Higher turnover rates Difficulty in establishing enduring relationships with customers Suboptimal total salesforce performance

21 Motivation and training

22 Motivation - Definition The force within us that activates our behavior Motivation Intensity Direction Persistence The amount of mental and physical effort put forth by the salesperson. The extent to which an individual determines and chooses efforts focused on a particular goal. The extent to which the goaldirected effort is put forth over time.

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24 Motivational theories Maslow s hierarchy of needs Vroom s expectancy theory

25 Motivating factors for salespeople

26 Topics salespeople would like to discuss with their sales managers

27 Motivation Extrinsic vs Intrinsic Intrinsic When doing the job is inherently motivating. Does it ever happen? Extrinsic When rewards such as pay, promotion, and formal recognition act as motivators Categories of rewards Compensation rewards: - Given in return for acceptable performance or effort. - Can include nonfinancial compensation, such as recognition and opportunities for growth and promotion. Non-compensation rewards: - Beneficial factors related to the work situation and well-being of each salesperson. - E.g., Provide adequate resources to do the job. Allow people control over their own activities.

28 Financial compensation: Straight Salary Advantages Salaries are simple to administer. Planned earnings are easy to project. Salaries can provide control over salespeople s activities, and reassignments are less of a problem. Salaries are useful when substantial development work is required. Disadvantages Salaries offer little incentive for better performance. Salary compression could cause perceptions of inequity among experienced salespeople. Salaries represent fixed overhead.

29 Financial compensation: Straight Commission Advantages Income is linked directly to desired results. Straight commission plans offer cost-control benefits. Disadvantages Straight commission plans contribute little to company loyalty. Problems may also arise if commissions are not limited by an earnings cap.

30 Financial compensation: Performance Bonuses Advantages Organization can direct emphasis to what it considers important in the sales area. Bonuses are particularly useful for tying rewards to accomplishment of objectives. Disadvantages It may be difficult to determine a formula for calculating bonus achievement if the objective is expressed in subjective terms. If salespeople do not fully support the established objective, they may not exert additional effort to accomplish the goal.

31 Financial compensation and Sales volume

32 Salesforce compensation framework PROS - Security of a regular and stable income - Less sales force turnover Why Choose a Salary Plan? PROS - Higher level of loyalty - Better control over sales people for non selling tasks - When problem of measurement of the sales impact - Better administrative control over compensation - Easier to induce sales people to work consistently with company strategy CONS - Income levels tend to be lower than commission plans CONS - Subjectivity of job evaluation JOB SATISFACTION CONTROL

33 Salesforce compensation framework Why Choose a Salary Plan? PROS - Elimination of factors beyond the control of sales people influencing remuneration - Easier recruitment during economic downturns PROS CONS - May breed complacency - Difficult to motivate high performers when salary plans create the possibility of salary compression where the new trainee may earn almost as much as the experienced sales person - Sales leaders risk mutiny if they set wide salary gaps between high and low performers. - Profile of salespeople recruited may not be profile of top performers CONS MOTIVATION - Relatively fixed selling costs - More freedom in switching territories, reassigning sales people, entering new territories, or selling new product lines - Realization of greater profit when business is good - Burden for the firm during economic downturns - Risk associated with uncertain selling environments is bared by the company BUSINESS STRAGTEGY

34 Salesforce compensation framework Why Choose a Combination Plan? High Ratio Of Incentive To Total Compensation PROS - Sales person's impact on sales is important. - Sales effort productivity is high. - Sales job is programmable. - Performance criteria are measurable. PROS Firm's advertising, sales promotion or public relations investments are low. Offering's competitive advantage is not significant Firm is unknown Strategic objective is to increase sales volume Firm s financial position is weak Firm s emphasis is on selling new products CONS - Salespeople are primarily taking orders, checking inventory, providing customer service or indirectly generating sales. - Team selling. - Sales cycle is long. - Selling process is complex - Salespeople have little experience. - Performance criteria cannot be measured. CONS Firm's advertising, sales promotion or public relations investments are high Offering's competitive advantage of product is significant. Strategic objective is to emphasize long term customer relationships JOB DIMENSIONS BUSINESS STRATEGY

35 Non-financial compensation Opportunity for promotion: The ability to move up in an organization along one or more career paths. Sense of accomplishment: The internal sense of satisfaction from successful performance. Sales managers should facilitate salespeople s ability to feel this a sense of accomplishment. Opportunity for personal growth: Access to programs that allow for personal development (e.g., tuition reimbursement, leadership development seminars). Recognition: The informal or formal acknowledgement of a desired accomplishment. Job security: A sense of being a desired employee that comes from consistent exceptional performance.

36 Leadership styles Key leadership styles Associated behaviours Transformational leadership Visioning Inspiring Stimulating Coaching Teambuilding Transactional leadership Rewarding Correcting Authentic Leadership Self-awareness Internalised moral perspective Balanced processing Relational transparency Servant Leadership Serving the needs of the follower Enabling growth of the follower Power distribution versus power consolidation

37 Salesforce training: Definition A deliberate and formalized accumulation of information, concepts and skills that intend to foster competence and enhance the performance of salespeople (Wilson et al. 2002) Through training, the sales force can be stimulated to: Increase communication inside and outside the organization. Reduce inter- and intra- departmental misunderstandings. Learn new skills. Be introduced to contemporary ideas and ways of behaving. Enhance its productivity.

38 Sales training planning 1. Sales training needs Determination through management judgment, interviews with salespeople and customers, performance measures and organizational goals 2. Sales training objectives Improvement in salespeople knowledge (e.g. products, skills) Improvement in managing customer relationships Increase in salespeople s self-confidence and job satisfaction Decrease in sales costs, absenteeism and turnover rate Increased productivity 3. Training cost and duration Large investment in various forms of training, qualified trainers and logistics Careful consideration regarding the length of time that a company can tolerate keeping its salespeople out of action

39 Sales training implementation 1. Sales training topics Product knowledge Market and industry knowledge Company knowledge Sales techniques Management and marketing principles 2. Sales training methods Self study methodologies Reading assignments Pre-workshop assignments Programmed instruction Workshop methodologies Lectures Discussions On-the-job training Case studies Role playing Presentations

40 Sales training implementation 3. Who should do the training? Specialized training staff Firm s sales executives Special trainers from outside the firm 4. Where should the training take place? Centralized training (in the firm s central offices) Decentralized training (towards the salesperson work location) 5. When should the training take place? Before a salesperson goes out in the market to sell Continuously 6. Who should be trained? Salespeople with deficiencies and/or at an appropriate stage of readiness

41 Methods used to train sales managers

42 Components of a training programme

43 Measuring training effectiveness Reaction of trainees Attitude Questionnaires, comments, anecdotes, interviews Learning Understanding of concepts and ability to apply Before/After testing Behavior Observe behavior on the job Results Changes to sales productivity and other measures Do benefits outweigh the costs?

44 Sales training evaluation Evaluation Level 1. Reaction 2. Learning 3. Behavior 4. Results Definition How the trainees felt about the learning experience. The increase in knowledge - before and after. The extent of applied learning when back on the job. The effect on business by the trainee. Questions that must be asked Did the trainees like and enjoy the training? Was it useful? What proposals for improvement do they make? What principles, facts, and techniques were learned? Did the trainees learn what intended to be taught? Was there noticeable and measurable change in the activity and performance of the trainees when back on their jobs? What were the tangible results of the training for the firm? Measurements Feedback forms based on subjective personal reaction to the training experience. Post-training surveys. Typically assessments or tests before and after the training. Hard-copy, electronic, online or interview style assessments are all possible. Observation and interviews over time. Assessments such as evaluations by supervisors, colleagues, customer and subordinates; critical cases. Volumes, values, percentages, timescales, and other quantifiable aspects of organizational performance.

45 Practical exercise: Selling fountain pens

46 Organization and compensation

47 Salesforce organization For salesforce organization you need to answer 3 questions: 1. What functions they should perform? 2. How many sales personnel should be employed? 3. Within what type of the organizational structure they should operate?

48 Sales organization concepts Specialization: The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization. Centralisation: The degree to which important decisions and tasks are performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.

49 Determinants of specialization Customer Needs Different Market-Driven Specialization Product/Market- Driven Specialization Simple Product Offering Complex Range of Products Geography-Driven Specialization Product-Driven Specialization Customer Needs Similar

50 Organisation structures Geographical structure (If the number of salespeople under each regional manager exceeds eight, serious consideration may be given to appointing area managers) Product specialisation structure Industry-based structure Account-size structure

51 Strengths and weaknesses of organizational structures

52 Strengths and weaknesses of organizational structures

53 Organizing salesforce (example) A Large Chemical Company Direct Sales Force Account Teams Telemarketing Inbound Customer Base

54 Organizing salesforce (example) A Pharmaceutical Company Telemarketing Direct Sales Force Account Teams Geographic Sales Force Inbound Customer Base Partners

55 Organizing salesforce (example) A Large Computer Manufacturer Direct Sales Force Industry Teams Account Teams Telemarketing Inbound Outbound Geographic Sales Force Customer Base Partners Internet

56 Salesforce size: Workload approach Determines selling effort needed to adequately cover the market Number of salespeople required to provide this amount of selling effort is calculated Relatively simple to develop and is sound conceptually Total selling effort needed Number of salespeople = Average selling effort per salesperson

57 Salesforce size: Breakdown approach Determines the number of salespeople needed to generate forecasted level of sales Easy to develop Weak conceptually. Is it only sales that determines the number of salespeople needed? Salesforce size = Forecasted sales / Average sales per person

58 Salesforce size: Incremental approach Most rigorous for calculating salesforce size Compares the marginal profits and marginal costs associated with each incremental salesperson +ve quantifies the important relationships between salesforce size, sales, and costs -ve difficult to develop, and cannot be used for new sales forces / no historical data for accurate judgements

59 Own or outsourced salesforce? Fast growth It takes less time to reach the market with sales personnel that has already been trained instead of recruiting and training own sales force Lack of funds External selling is a business service, a company will be paid on the results achieved without bearing overheads Scattered customers Sales can be expanded by means of small and or distinct customers and selling to them with own forces is unprofitable

60 Readings Core reading: Jobber and Lancaster: Chapters 13, 14, 15 Further reading: Guenzi and Geiger: Chapters 8, 11, 12, 13, 15, 16 Donaldson, Cuevas and Lemmens: Chapters 4, 5, 11, 12, 14