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. Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.
86
Embed
Sales Organization Concepts - Welcome to University18unext.in/assets/Pu18SM3016/Sales mngmt class5 (8th Nov, 2011).pdf · Sales Organization Concepts ... Sales Force Specialization
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
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.
Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.
Sales Force Specialization Continuum
Some specialization of selling activities,
products, and/or customers
All selling activities and all products to all customers
Generalists Certain selling activities for certain products for certain customers
Specialists
Concepts of Sales Organisation
• A sales organisation assists the sales manager to carry out needed tasks efficiently and effectively to achieve results
• The basic concepts of the sales organisation are: • Degree of centralisation • Degree of specialisation • Line or staff positions • Market orientation • Effective co-ordination
Basic Types of Sales Organisations
Sales organisations are generally classified into four basic types:
• Line Organisation
• Line and staff organisation
• Functional organisation
• Horizontal organisation
We shall discuss main characteristics, advantages, and disadvantages of each type of sales organisation
Line Organisation
Characteristics: All managers have line authority to direct and control subordinates. Used in small firms / departments
2) Add number of promotions, retirements, transfers out, terminations, resignations expected from existing salespeople
3) Subtract expected transfers into the territory and existing salesforce
4) Make a total of new salespersons needed
• Territory sales managers submit their requirements to national / general sales manager, who calculates the total number of new salespersons to be hired
Outline Type of Salespeople Needed
The steps involved in the process are:
• Conducting a job analysis
• Preparing a job description
• Developing job qualifications / specifications
Conducting a Job Analysis
• It is done by a person from sales / H. R. department, or a consultant. It consists of two tasks:
(1) Analyse environment in which the salesperson would work – E.G. nature of customers, competitors, products.
(2) Determine duties and responsibilities of the salesperson. Obtain information from sales managers, customers, etc.
Preparing a Job Description
• It is a written document developed from the job analysis
• The detailed job description is a useful tool for recruiting,
selecting, training, compensating, and evaluating
salespeople
• Some of the points it generally covers are:
• Job title, reporting relationship, types of products /
services sold, types of customers, duties and
responsibilities, location and geographic area to be
covered
Developing Job Qualifications / Specifications
• These are generally based on job description
• Job specifications / qualifications include education, sales
experience, skills, and personality traits
• Many studies done, but no generally accepted job
qualifications for selecting salespeople, due to many types of
sales jobs
• Some methods used for developing job specifications are as
under:
• Study job description. Useful for a new company
• Analyse personal histories of salespersons
• Ask customers
Recruiting Salesforce
• Recruiting include activities to get individuals who will apply
for the job
• The general purpose of recruitment is to get enough qualified
candidates, to enable company select the right persons
• H.R. and sales managers must update information on
government employment regulations
• Recruiting stage / process includes following activities:
• Finding the sources of sales recruits
• Evaluating and selecting recruiting sources
• Contacting candidates through the selected source
Finding the Sources of Sales Recruits
• For identifying prospective candidates, firms use internal and external sources. They include:
Internal Sources External Sources
• Employee referral
programmes
• Current employees
• Promotions and transfers
• Advertisements in
newspapers and journals /
magazines
• The Internet (job sites)
• Educational institutions
• Employment agencies
• Job fairs
• Other companies
Evaluating and selecting Recruiting Sources
• Recruiting sources are evaluated based on the database built over number of years
• Evaluating factors are:
• Performance rating of salespeople, after 2 years working
• Percentage of salespeople retained, after 2 years working
• Total cost of recruiting
• Selecting most effective source of recruiting at least cost
• For a new company, selection depends on cost
• Contacting candidates through the selected source is done by H. R. department
Selecting Salesforce
• Selection process consists of seven major selection steps / tools
• Companies differ in using selection tools, depending on expenditure budget and time available
• Major selection tools / steps are:
• Screening resumes
• Application blank
• Initial interview
• Intensive interview
• Testing
• Reference check
• Physical examination
Screening Resumes
• It is done when the company receives many resumes
• This step / tool not required, if somebody else like employment agency does initial screening
• Initial screening of resumes are done by comparing with job specifications
Application Blank
• Widely used, it is a methodical way of collecting relevant information from the applicant
• Advantages of using application blank (also called “formal application form”) are:
(1) Easy comparison of many applicants
(2) Useful for asking question during interview sessions
Interviews
• Widely used selection tool
• A good predictor of the candidate’s performance
• Initial interviews are used for screening candidates
• Intensive interviews are conducted to get indepth view of candidates
• Purpose is to decide a candidate’s fitness for a job
Testing
• Many firms use tests as a selection tool – EG P&G, IBM
• Purpose of testing: To find whether applicants have traits / characteristics that lead to success in sales job
• Type of selection tests:
• Aptitude tests measure ability for selling and learning
• Intelligence tests find out mental intelligence or intelligence quotient (IQ)
• Interest tests find out level of interest in a sales career
• Knowledge tests measure knowledge of products, markets, etc
• Personality tests find out attitude or traits like empathy, self-confidence
• Tests must have reliability and validity
• Tests should be one of the selection tools and not the only tool
Reference Checks
• They are important due to possibilities of resume frauds and false personal information
• They are done by letters / e-mails, telephones, or personal visits
• Instead of candidate’s references, previous employers / customers to be included for reference checks
Physical Examination
• Objective is to find a physical problem that may prevent job performance of an applicant
• Most companies want their prospective employees to undergo physical examination
• Increasing number of firms ask applicant to complete the health information form without seeing a medical doctor
Hiring Stage
• After completing selection process, a list of candidates to be hired is made
• In hiring stage, two activities are performed:
(1) The company making the job offer
(2) Persuading the applicant to accept it
Socialisation Stage
• It is the process through which new salespeople learn values, norms, attitudes, and behaviour of people working in the firm
• Socialisation process starts before the new salesperson accepts the job offer and continues until the person is assimilated into the company culture
• Assimilation is the second stage of socialisation process
• Companies have this process, in order to retain new salespeople
Definition
• Sales Force Management
– The analysis, planning, implementation, and control of sales force activities. It includes setting and designing sales force strategy; and recruiting, selecting, training, supervising, compensating, and evaluating the firm’s salespeople.
Inside Sales Force
Outside Sales Force
Travel to Call on Customers
Sells to Major Accounts
Finds Major
New Prospects
Conduct Business From Their Offices Via Phone or Buyer Visits
Technical Support People
Tele- Marketing
Or Internet
Other Sales Force Strategy and Structure Issues
Sales Assistants
Turnover Rates
Industry 1999
Construction 13.8%
Office Equipment 47.0
Retail 51.2
Wholesale (Consumer Goods) 18.5
Electronics 14.1
Business Services 26.2
Pharmaceuticals 8.3
Banking 4.3
Real Estate 11.9
Source: Dartnell’s 30th Sales Force Compensation Survey (1999), p.187.
Turnover Rates in Selected Industries
Compensation
(trainee average) $35,500
Benefits (approx.21.5% of
compensation) 7,600
Field Expense 16,000
Direct Expense $59,100
Training Costs 7,100
Total Costs $66,200
Source: Dartnell’s 30th Sales Force Compensation Survey (1999), p.187.
First Year Cost of a Salesperson in the U.S.
The Recruiting Process
Mark W. Johnston and Gary W. Marshall, Sales Force Management, McGraw Hill, 2006
JOB DESCRIPTION FACTORS Selling Requirements: Degree of Responsibility
Activity level requirements Travel and entertainment
Written proposals Earnings potential
Individual vs. team selling Promotion leaders
One time vs. systems selling Minimum sales volume or
Type of prospects and customers profits
One-on-one selling vs. groups
Travel--how much and what kind
Program or concept selling
Technical knowledge
Educational seminars
Collecting receivables
Marketing plans
Inside Recruiting
• Advantages:
– Company employees have established performance records and present themselves as a known entity
– Recruits from inside require less orientation and training due to familiarity with current products, policies and operations
– Recruiting within bolsters company morale because employees see opportunities for advancement
• Facilitating internal recruiting starts with fully informing human resources of sales staff needs
Selection Tools and Procedures
• Application blanks
• Personal interviews
• Reference checks
• Physical examinations
• Psychological tests – intelligence
– personality
– aptitude/skills
Proposed Model of Sales Force Socialization
Realism
Congruence
Recruiting/Selection Objectives
Job Satisfaction
Job Involvement/ Commitment
Performance
Job Outcomes
Task Specific Self -Esteem
Person Outcomes
Resolution of Conflicting
Demands at Work
Initiation to Task
Training Objectives
Role Definition
Activities Involved in Managing the Human Resources of a Sales Force
Staffing: Having the Right People to Sell, cont…
• Job specifications for successful salespeople
– Education
– Personality
– Experience
– Physical attributes
Selected Characteristics of Successful Salespeople―Which are Most Important?
Major Steps in Sales Personnel Selection Process
Not all companies
take every step
• The decision process • for recruiting and • selecting salespeople
Sales Training
• Training supplements experience
• Higher performance can be achieved earlier
ACMEE process – Aim, Content, Method, Execution, Evaluation
• Initial Training * Continuous Training
Methods – lectures, one-to-one, role plays, demo, case methods, discussions, simulations, on the job, distance learning, sales manuals.
* In house * External Source
Broad objectives of Sales Training
• Increase productivity
• Improve morale
• Lower turnover
• Improve customer relation
• New Product Launch
• Shift in distribution strategy
• Implementation of new process / technology
Determine the objectives
• Specific
• Realistic
• Measurable
These add to the credibility of a sales training program.
Content of Training Programme
• Content for new sales trainees is broader. It includes:
• Company knowledge
• Product knowledge
• Customer knowledge
• Competitor knowledge
• Selling skills / sales techniques
• Examples of specific content for experienced salespersons are:
• New product knowledge
• Introduce change in sales organisation
• Negotiating skills
• Content depends on the aims of training programme
Develop and Implement the Training Program
• Content
– Internally developed
– Outside experts
• Training methods:
– Discussion
– Role playing
– On-the-job training
Source: “2001 Industry Report,” www.trainingmag.com
• Instructional Method • Classroom with instructor 100% • Workbook/manuals 98 • Public seminars 93 • Videos / CD ROMs 90 • Role-play 81 • Non-computer, self study 79 • Case studies 78 • Internet 74 • Games ( manual / computerized) 72 / 57 • Teleconferencing 53
Contd.
• Where does training take place?
– Centralized training programs
– Decentralized training
• When does training occur?
Training the Sales Force, cont…
• Who is involved in training?
• Is a combination of these sources required?
Traditional Methods Categories
Presentation Methods
Hands-on Methods
Group Building Methods
Presentation Methods
• Presentation methods refer to methods in which trainees are passive recipients of information.
• This information may include: – Facts or information
– Processes
– Problem – solving methods
• Presentation methods include: – Lectures
– Audio-visual techniques
Presentation Methods: Lecture
• Lecture involves the trainer communicating through spoken words what she wants the trainees to learn.
• The communication of learned capabilities is primarily one-way – from the trainer to the audience.
Lecture (continued)
• One of the least expensive, least time-consuming ways to present a large amount of information efficiently in an organized manner.
• Useful because it is easily employed with large groups of trainees.
Variations of the Lecture Method
Standard Lecture
Team Teaching
Guest Speakers Panels
Student Presentations
Presentation Methods: Audio-Visual Techniques
• Audio-visual instruction includes: – Overheads
– Slides
– Video
• It has been used for improving: – Communication skills
– Interviewing skills
– Customer-service skills
– Illustrating how procedures should be followed
Hands-on Methods
• Hands-on methods refer to training methods that require the trainee to be actively involved in learning.
• These methods include:
– On-the-job training
– Simulations
– Case studies
– Business games
– Role plays
– Behavior modeling
Hands-on Methods: On-the-Job Training
• On-the-job training (OJT) refers to new or inexperienced employees learning through observing peers or managers performing the job and trying to imitate their behavior.
• OJT includes:
– Apprenticeships
– Self-directed learning programs
On-the-Job Training (continued)
• OJT can be useful for:
– Training newly hired employees
– Upgrading experienced employees’ skills when new technology is introduced
– Cross-training employees within a department or work unit
– Orienting transferred or promoted employees to their new jobs
Self-Directed Learning (continued)
Advantages
• Learn at own pace
• Feedback about learning performance
• Fewer trainers needed
• Consistent materials
• Multiple sites easier
• Fits employee shifts and schedules
Disadvantages
• Trainees must be motivated to learn on their own
• Higher development costs
• Higher development time
OJT Programs: Apprenticeship
• Work-study training method with both on-the-job and classroom training.
• To qualify as a registered apprenticeship program under state or federal regulations:
– 144 hours of classroom instruction
– 2000 hours (or one year) of OJT experience
• Can be sponsored by companies or unions.
• Most programs involve skilled trades.
Apprenticeship (continued)
Advantages
• Earn pay while learning
• Effective learning about “why and how”
• Full-time employment at completion
Disadvantages
• Limited access for minorities and women
• No guarantee of full-time employment
• Training results in narrow focus expertise
Hands-on Methods: Simulations
• Represents a real-life situation.
• Trainees’ decisions result in outcomes that mirror what would happen if on the job.
• Used to teach:
– Production and process skills
– Management and interpersonal skills
Hand-on Methods: Case Studies
• Description about how employees or an organization dealt with a difficult situation.
• Trainees are required to: – Analyze and critique actions taken – Indicate the appropriate actions – Suggest what might have been done differently
• Major assumption of this approach is that employees are most likely to recall and use knowledge and skills learned through a process of discovery.
Hands-on Methods: Role Plays
• Trainees act out characters assigned to them.
• Information regarding the situation is provided to the trainees.
• Focus on interpersonal responses.
• Outcomes depend on the emotional (and subjective) reactions of the other trainees.
• The more meaningful the exercise, the higher the level of participant focus and intensity.
Hands-on Methods: Behavior Modeling
• Involves presenting trainees with a model who demonstrates key behaviors to replicate.
• Provides trainees opportunity to practice the key behaviors.
• Based on the principles of social learning theory.
• More appropriate for learning skills and behaviors than factual information.
• Effective for teaching interpersonal and computer skills.
Group Building Methods
• Group building methods refer to training methods designed to improve team or group effectiveness.
• Training directed at improving trainees’ skills as well as team effectiveness.
• Group building methods involve trainees: – Sharing ideas and experiences – Building group identity – Understanding interpersonal dynamics – Learning their strengths and weaknesses and of
their co-workers.
Group Building Methods (continued)
• Group techniques focus on helping teams increase their skills for effective teamwork.
• Group building methods include:
– Adventure learning
– Team training
– Action learning
Group Building Methods: Adventure Learning • Focuses on the development of teamwork and
leadership skills using structured outdoor activities.
• Also known as wilderness training and outdoor training.
• Best suited for developing skills related to group effectiveness such as: – Self-awareness – Problem solving – Conflict management – Risk taking
Adventure Learning (continued)
• To be successful:
– Exercises should be related to the types of skills that participants are expected to develop.
– After the exercises, a skilled facilitator should lead a discussion about • what happened in the exercise
• what was learned
• how events in the exercise relate to job situation
• how to apply what was learned on the job
Group Building Methods: Team Training
• Involves coordinating the performance of individuals who work together to achieve a common goal.
• Teams that are effectively trained develop procedures to identify and resolve errors, coordinate information gathering, and reinforce each other.
Components of Team Performance
Behavior Knowledge Attitude
Team Performance
Main Elements of the Structure of Team Training
Tools Team Task Analysis
Performance Measurement
Task Simulation and Exercises
Feedback
Principles
Methods Information-Based
Demonstration-Based Video
Guided Practice
Role Play
Strategies Cross-Training
Coordination Training
Team Leader Training
Team Training Objectives
Content Knowledge
Skills
Attitudes
Group Building Methods: Action Learning
• Involves giving teams or work groups:
– an actual problem,
– having them work on solving it,
– committing to an action plan, and
– holding them accountable for carrying out the plan.
Action Learning (continued)
• Several types of problems are used including how to:
– Change the business
– Better utilize technology
– Remove barriers between the customer and company
– Develop global leaders
Choosing a Training Method
1. Identify the type of learning outcome that you want training to influence.
2. Consider the extent to which the learning method facilitates learning and transfer of training.
3. Evaluate the costs related to development and use of the method.
4. Consider the effectiveness of the training method.
Sales Training Costs
• Organization Spent on Training ($ M)
• IBM 700
• Lockheed Martin 350
• Intel 336
• HP 260
• United Airlines 225
Source: Tammy Galvin, Gail Johnson, and Heather Johnson, “2004 Training Top 100,” Training 41, no.3 (2004), pp.22-36
How to evaluate training?
• Evaluation Info required Method
• Reaction Attitudinal Questionnaires
Comments
Interviews
• Learning Concepts/use Before-n-after
• Behavior On-the-job beh. Beh. Ratings, Before –n-after
• Results Changes in sales, Cost-benefit
productivity, others analysis
Evaluation of Sales Training Programme
• It is done to improve training design and implementation, and to find if expenditure was worthwhile
Framework for sales training evaluation:
Outcomes to measure What to measure How to measure When to measure
• Reactions /
Perceptions of
participants
• Training objective
• Was training
worthwhile?
• Questionnaires
•interviews
• After the training
• Learning –
knowledge, skills,
attitudes learnt
• Knowledge, skills,
attitudes
• Tests
• Interviews
• After training
• Before & after –
training
• Behavioural change • Trainees’ change of
behaviour
• Self-assessment by
trainees
• Observation by
supervisors /
customers
• After training, over a
period of one year
• Results –
Performance; Benefits
more than cost?
• Sales, Profits
• Customer
satisfaction
• Company data
• Management
judgement
• Market survey
• After training,
Quarterly, Yearly
Recent Trends in Sales Training Evaluation
• More pressure to show concrete evidence
• If sales training is an investment, the need is to document the benefits to calculate ROI
• Growing accountability
• Use of control groups is increasing
• Problems in equating sales increase with sales training.