TM 1-2  (Fig. 1-2)
1 / 108

Types of Sales Jobs - PowerPoint PPT Presentation

  • Uploaded on

TM 1-2 (Fig. 1-2). Types of Sales Jobs. Driver sales person. Sales maintenance. Inside order-taker. Outside order-taker. Missionary sales person. Sales support. Sales engineer/consultant. Consultative sales person: tangible products. Sales development.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Types of Sales Jobs' - makara

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Sales force goes to the customer

TM 1-2 (Fig. 1-2)

Types of Sales Jobs

Driver sales person

Sales maintenance

Inside order-taker

Outside order-taker

Missionary sales person

Sales support

Sales engineer/consultant

Consultative sales person: tangible products

Sales development

Consultative sales person: services and other intangible products

Sales jobs are different than other jobs

TM 1-4

Sales Jobs are Different than Other Jobs

  • Salespeople are largely responsible for implementing a firm’s marketing

  • strategies in the field.

  • Salespeople represent their company to customers.

  • Salespeople represent their customers to their company.

  • Salespeople operate with little or no direct supervision.

  • Salespeople are alone a large part of the time.

  • A sales person needs more tact and social intelligence than other

  • employees on the same level in the organization.

  • Sales people are among the few employees authorized to spend company

  • funds.

  • Sales jobs frequently require considerable travel and time away from

  • home and family.

  • Salespeople are responsible for revenue generation.

Sales force goes to the customer

TM 1-6a

Managing is a distinct activity which requires a unique set of skills, knowledge, and attitudes

Sales force goes to the customer

TM 1-6b

Some skills are the same; many are different

  • motivating

  • planning

  • training

  • delegating

  • recruiting

  • administration

Sales force goes to the customer

The Executive Ladder in Personal Selling

TM 1-7

(FIG. 1-6)


Vice president of sales

National sales manager

Regional/divisional sales manager

Districtsales manager

Sales supervisor

Staff assistants available for advice and support at any step along the ladder

Sales person

Sales force goes to the customer

TM 1-8

FIG. 1-7

The Executive Ladder in Team Selling


Vice president of marketing

Distribution logistics specialist

Client-team leader

Product engineer

Customer sales/service representative

Sales force goes to the customer

TM 1-9

Promotional Mix: Product Life Cycle, Type of Business and Product

Product Manufacturers Wholesalers Retailers

Life-Cycle Industrial Consumer All Products Durable Nondurable


Personal selling Advertising Personal selling Personal selling Advertising

Personal selling Advertising Sales promotion

Personal selling Advertising Personal selling Personal selling Advertising

Personal selling Sales promotion Sales promotion


Sales promotion


Personal selling Sales promotion Personal selling Personal selling Advertising

Advertising Sales promotion Sales promotion Sales promotion


Personal selling Sales promotion Personal selling Personal selling Sales promotion

Sales promotion Sales promotion


Sales force goes to the customer

A Company’s Complete Marketing System:

A Framework of Internal Sources

TM 2-1 (Fig. 2-1)

Operating within a Set of External Forces

Macroenvironmental forces:

Demography Economic conditions Sociocultural factors Political-legal factors Technology Competition

Company’s marketing mix:

Product planning Price structure Distribution system Promotional activities

Marketing inter-mediaries

Marketing inter-mediaries


The market

Nonmarketing resources in the firm:

Production Financial Personnel

Public image Research and Development Location

Sales force goes to the customer

Company Organization Chart Embracing the Concept of Marketing Management

TM 2-2 (Fig. 2-3)


Production Manager

Marketing Manager

Financial Manager

Personnel Manager

Manager of Marketing Planning and Facilitating Staff Services

Chief Sales Force Manager

Management of field


Sales promotion

Marketing research

Sales training

Sales analysis and

control (sales statistics)

Sales budgeting

Sales forecasting

Planning for channels,

territories, and quotas

Product planning

Inventory control

Production scheduling

Physical distribution

sales organization

activities including customer service and product service

Management of sales office

Sales force goes to the customer

Strategic Planning for the Total Company Marketing Management

TM 2-3

Organization’s mission


Broad goals


Strategy and tactics to achieve goals

Sales force goes to the customer

Relationship Between Objectives, Strategies and Tactics Marketing Management

TM 2-4 (Fig. 2-4)

Set Goals



Develop Tactics

Sales force goes to the customer

TM 2-5 Marketing Management

Relationship Marketing

  • Long-term commitment

  • Understanding customer expectations

  • Building service partnerships

  • Empowering employees

  • Total quality management

Sales force goes to the customer

TM 2-6 Marketing Management

Company Strategy-Marketing Goals and Strategy




Earn 20% ROI



Increase market

Increase marketing share 10%

share 10%


Increase share of customer business

Sales force goes to the customer

TM 2-7 Marketing Management

Marketing Strategy-Sales Force Goals, Strategy and Tactics


share 10%


Increase market

Sales Force



Increase share of customer business

Increase share of customer business


Build long-term

customer relations


Develop sales teams

Provide bonuses for greater customer share

Sales force goes to the customer

Multiple relationship strategies Marketing Management

TM 2-8 (FIG. 2-5)



Commitment to the customer

Relationship oriented

Transaction oriented




Cost of serving the customer

Sales force goes to the customer

TM 3-1 FIG. 3-1 Marketing Management

Salesperson’s Average Time Allocation*

(5.3 hrs) 18%

(8.5 hrs) 18%

(7.2 hrs) 15%

(11.6 hrs) 25%

(14.3 hrs) 31%

*SOURCE: Christem P. Herde, Dartnell’s 29th Sales Force Compensation Survey 1996-1997, (The Dartnell Press: Chicago, IL), p. 177.

Sales force goes to the customer

TM 3-2 Marketing Management



Gaining Commitment

Meeting objections


Need Assessment




Sales force goes to the customer

TM 3-3 FIG. 3-2 Marketing Management

Lead Conversion Ratio: Inquiry to Decision 12 Months After Inquiring

Plan to buy 25%

Purchased 45%

No longer in market 30%

*SOURCE: Bob Donath, James K. Obermayer, Carolyn K. Dixon, and Richard A. Crocker, “When Your Prospect Calls,” Marketing Management, Vol. 3, No. 2, 1994.

Sales force goes to the customer

TM 3-4 (FIG. 3-3) Marketing Management

The Value of Inquiry Follow-Up

Share of buyer’s business if not followed up 40%

Share of buyer’s business if followed up 83%

Source: Bob Donath, James K. Obermayer, Carolyn K. Dixon, and Richard A. Crocker, “When Your Prospect Calls,” Marketing Management, Vol. 3, No. 2, 1994

Sales force goes to the customer

Buying Center Members Marketing Management

TM 3-5

Type of influence Job position Influence description

User Production line workers and Use the product in the their supervisors production process

Influencer Engineers, research & Write specifications; supply development specialists information

Gatekeepers Purchasing agents, reception- Limit access to others and ists, secretaries, research control the flow of assistants information to others

Deciders Purchasing agents (small or Make actual choice between reorder items), management suppliers

Buyers Purchasing agents Formally give the order to a supplier; arrange terms of sale

Sales force goes to the customer

NEED ASSESSMENT Marketing Management

TM 3-6

  • Situational questions

  • How often do you change the cutting oil in your drill presses?

  • In addition to the hospital administrator, who else has an influence on the decision?

  • Problem discovery questions

  • Have you experienced any delays in getting repair parts?

  • In which part of the production process is quality control the most important.

  • Problem Impact questions

  • How do these delays in getting parts affect your production costs?

  • What impact do the quality consistency problems have on your production costs?

  • Solution value question

  • If your inventories could be reduced by 20%, how much would that save you?

  • If your rejection rate on final inspection was reduced to under one percent, how much would

  • Confirmatory questions

  • So, you wold be interested in an inventory control system that reduced your inventories by 20%?

  • If I can provide evidence to you that our products would lower your rejection rate to under one

  • percent, would you be interested?

that save you?

Sales force goes to the customer

Presentation of Product, Features, Benefits, Advantages Marketing Management

TM 3-7

Product FeaturesBenefits Advantages

Camera Telephoto lens Take pictures Able to capture from longer images of animals distances. or people from a distance.

Bicycle Attached water Can hold a water Don’t get dehydrated. bottle holder bottle. Don’t have to stop for water. Feel more refreshed.

Drill Press Multiple drill Can change bits Saves time. bits attached without shutting Saves money. down the machine.

Motor Oil Rust inhibitor Oil and engine Saves money. have longer life.

Sales force goes to the customer

TM 4-1 Marketing Management

Characteristics of a Good Organizational Design

Market orientation

Effective informal organization

Activities organized

Organizational Design

Balanced and coordinated activities

Authority and responsibility aligned

Stable, but flexible

Responsible span of control

Sales force goes to the customer

Geographical Organization Marketing Management

TM 4-2 (Fig. 4-5)

Chief Marketing Executive

Sales Promotion Manager

General Sales Manager

Marketing Research Manager

Advertising Manager

Sales Analyst

Western Regional Sales Manager

Eastern Regional Sales Manager

4 District Sales Managers

4 District Sales Managers

Salespeople each with own territory

Salespeople each with own territory

Sales force goes to the customer

Sales Organization with Product Specialized Sales Force Marketing Management

TM 4-3 (Fig. 4-6)

Chief Marketing Executive

Marketing Research Manager

General Sales Manager

Sales Promotion Manager

Customer Relations Manager

Advertising Manager

Sales Manager Product A

Sales Manager Product B

Sales Manager Product C

Salespeople Product A

Salespeople Product B

Salespeople Product C

Sales force goes to the customer

Sales Organization Specialized by Type of Customers Marketing Management

TM 4-4 (Fig. 4-8)

Chief Marketing Executive

Sales Promotion Manager

General Sales Manager

Director of Marketing Research

Advertising Manager

Sales Manager Transportation Industry

Sales Manager Petroleum Industry

Sales Manager Steel Industry




Sales force goes to the customer

TM 4-5 Marketing Management

The Relationship Between a Sales Team and a Buying Center

Selling firm

Buying firm

Sales Team

Exchange processes

Purchasing agent

Organizational buying center







Physical distribution







Problem Solving






Sales force goes to the customer

TM 4-6 Marketing Management

  • Uses of Telemarketing

  • Identify prospective customers

  • Screening, qualifying leads

  • Sales solicitation: small customers, re-orders

  • Order processing

  • Product service support

  • Account management

  • Customer relations

Sales force goes to the customer

TM 5-1 Marketing Management


  • Lack of resources

  • Lack of job specification and qualifications

  • Qualifications not objectively established

  • Lack of managerial training

  • Personal prejudices

  • Search for managerial talent

Sales force goes to the customer

TM 5-2 Marketing Management


  • Civil Rights Act of 1964

  • Federal Contract Compliance, Executive Orders

  • Age Discrimination in Employment Act (1967)

  • Fair Employment Opportunity Act (1972)

  • Rehabilitation Act of 1973

  • Vietnam Era Veterans Readjustment Act (1974)

  • Uniform Guidelines on Employment Selection Procedures (1978)

  • Americans with Disabilities Act (1990)

Sales force goes to the customer

TM 5-3 (Fig. 5.2) Marketing Management

Sales Force Staffing Process

Plan for Recruiting & Selection

Determine Number of People Wanted

Establish Responsibility for Recruiting, Selection and Assimilation

Conduct Job Analysis

Prepare Job Description

Determine Hiring Qualifications

Recruit Applicants

Select Applicants

Design a System For Measuring Applicants

Measure Applicants Against Hiring Qualifications

Make Selection Decisions

Hire The People

Assimilate New People

Into Sales Force

Sales force goes to the customer

TM 5-4 Marketing Management

Workload Analysis

Number of reps needed Total workload in market


Workload one rep can handle

Market workload:

Customer Number of Calls Total



class accounts per year calls

A 400 20 8,000

B 600 10 6,000


One rep’s workload:

Calls/day x Selling days/week x Working weeks/year = Annual workload

5 x 5 x 50 = 1250

Number of reps needed



= = 112 reps

Sales force goes to the customer

TM 5-5 (Fig. 4-3) Marketing Management

Determining the Number of Salespeople Needed

Strategic Plans

New - Eliminated/ + Promotions + Retirements + Terminations/ = Total new territories combined resignations reps needed


Expansion MN and RI 2 promotions 2 retirements 1 termination into Texas. Territories expected expected expected reps needed

Total new

4 - 1 + 2 + 2 + 1 = 8

Sales force goes to the customer

TM 5-6 Marketing Management


  • Title

  • The nature of the product or service to be sold

  • Type of customers to be called on,

  • frequency of calls, and types of personnel to be contacted

  • Specific tasks and responsibilities to be

  • carried out

  • Organizational relationships

  • Mental and physical demands of the job

  • Environmental pressures and constraints

  • that might affect the job

Sales force goes to the customer

TM 5-7 Marketing Management


  • Willingness to share

  • Cooperative

  • Trusting

  • Empathetic

  • Accepting of others

  • Receptive to others ideas

  • Selflessness

  • Leadership skills

Sales force goes to the customer


TM 5-8

Source Comment

Referrals: Candidates and position are known to person making referral.

Within company:

Office and factory employees Company employees know the company and its products.

Sales force leads Current salespeople know their job requirements and can possibly identify candidates who could be a good job match.

Other Companies:

Competitors Competitors know the customers and are familiar with your products.

Customers Customers know your products and your company.

Suppliers Suppliers know your company and your products.

Educational institutions Primarily used when recruiting inexperienced people. Students are usually actively involved in a job search, and this provides an efficient place to screen large numbers of available candidates.

Advertisements Produces the greatest number of candidates, but the average quality is sometimes lower.

Employment agencies The agency is often more costly than other methods, but it will do a large part of the initial screening.

Voluntary applicants These applicants are interested in your firm and probably possess a high degree of self-confidence, self-reliance, and initiative.

Part-time workers These workers are easy to contact, readily available, and can work flexible hours. This is a good source for in-home selling.

Sales force goes to the customer

TM 5-9 (Fig. 5-8) Marketing Management

Recruiting Evaluation Matrix

Evaluation Criteria

Consistent with strategic planning?

Percent retained after 3 years

Rep’s per-formance after 2 yrs.

Recruiting sources

Number recruits

Number hired


Frequency of use

Within company:

Sales force Other departments

Other companies:

Competitors Customers Noncompetitors

Educational institutions


Employment agencies

Voluntary applicants



Sales force goes to the customer

TM 6-1 Marketing Management

Salesperson Selection Tools

References and credit reports

Application blanks

Psychological tests

Organizational Design

Personal interviews

Assessment Centers

Sales force goes to the customer

TM 6-2 Marketing Management

Application Blank Information

Personal Experience Physical Environmental

Name Work Ability to perform Membership in job-related social and service Address & Phone Education physical activities organizations

Health Outside interests

Reason for seeking particular job

Personal goals


Sales force goes to the customer

TM 6-4 Marketing Management

Suggestions for Improving Interviewing Effectiveness

  • Have specific job specifications and qualifications clearly in mind

  • Establish specific interviewing objectives

  • Provide some degree of structure (guidelines, probing questions)

  • Allow adequate time

  • Be very familiar with application or resume information

  • Use standardized rating sheets after each interview

  • Use multiple interviews

  • Provide training and practice for the interviewers

  • Remember, the interview is an opportunity to learn more about the

candidate as well as to sell your company

Sales force goes to the customer

TM 7-1 Marketing Management

Selection and Hiring are Not Synonymous










Sales force goes to the customer

Details of the Job Marketing Management

TM 7-2 (Fig. 7-2)

Office practices


Company eating facilities

Expense account

For the new sales representative: Details of the job

Sales force goes to the customer

TM 8-1 Marketing Management

Phases of Developing and Conducting Sales Force Training

Establish program objectives

Identify who should be trained

Training assessment

Identify training needs and specific goals

How much training is needed?

Who should do the training?

When should the training take place?

Program design

Where should training be done?

Content of training

Teaching methods used in training program


Determine how training will be reinforced

What outcomes will be evaluated?


What measures will be used?

Sales force goes to the customer

Objectives of Sales Training Programs Marketing Management

Increased Sales Productivity

TM 8-2 (Fig. 8-3)

Improved Self-Management

Lower turnover

Sales training program objectives

Improve customer relations

Improve morale

Improved communica-tion

Sales force goes to the customer

Examples of Specific Training Objectives Marketing Management

Company orientation and Understand company goals and objectives administrative skills: Understand company selling philosophy Understand organizational structure Understand company policies and procedures Improve call reports Improve call patterns Improve time management

Knowledge: Existing products - features, benefits, and applications New products - features, benefits, and applications Industry trends Competitive products - features, benefits, and applications Specific customer applications and problems Promotional programs

Selling skills: Improve pre-call planning Improve prospecting methods Improve strategy selection Improve presentation skills Improve closing techniques Improve understanding of and handling objectives Improve customer sensitivity

TM 8-3

Sales force goes to the customer

TM 8-4 Marketing Management

Who Should Train Sales People?

Source Advantages Disadvantages

Line executive Greater credibility Lack of time

Clearer expectations Lack of teaching ability More thorough evaluation of candidates

Staff trainer Greater time Additional expense

More resources Lack of authority

Better training skills Less credibility

Outside specialist Greater specialization Additional expense and expertise

Program content is not specific to company’s needs

Sales force goes to the customer

TM 8-5 Marketing Management

Training Content and Methods Matrix

Lectures Discussion Demonstra- Programmed Interactive Audio On-the-Job Videos Bus. T.V. Role

tion learning simulation cassettes Playing

Company knowledge

Product knowledge

Market/Indus-try knowledge

Selling skills

Time Manage-ment

* * * *




























* * * * * *

Sales force goes to the customer

TM 9-1 Marketing Management


1. Initiate action on a certain task … choice;

2. Expend a certain amount of effort on that

task … intensity;

3. Persist in expending effort over a period of

time … persistence.

The amount of effort the sales person desires to expend on each activity associated with the job.

Sales force goes to the customer

TM 9-2 (Fig. 9-2) Marketing Management

Motivational Conditions

Does better performance lead to greater rewards?

Are the rewards worth the effort?



Does more effort lead to better performance?






The same or less effort

Sales force goes to the customer

Maslow’s Hierarchy of Needs and Possible Sales Managers’ Actions

TM 9-3 (Fig. 9-3)


Self-actualization needs



Managerial actions:

Provide/offer advanced

training, assignments to special

projects, more responsibility and


Esteem needs

Fulfilled through: Status, recognition.

Managerial actions: Recognize sales rep achievements

personally and publicly through title changes, commendation

Social needs

letters, promotions.

Fulfilled through: Affiliation, friendship, acceptance.

Managerial actions: Use team selling, hold social functions, distribute

employee newsletters, hold sales meetings, mentoring.

Safety needs

Fulfilled through: Job security, safety, income security.

Managerial actions: Provide safe work environment, set mutually agreed-upon

performance standards, communicate job performance expectations and consequences

of failure to perform.

Physiological needs

Fulfilled through: Food, shelter, clothing, health care.

Managerial actions: Provide/offer adequate income and good benefits package.

Sales force goes to the customer

TM 9-4 Actions

Herzberg’s Motivation-Hygiene Theory



  • pay

  • company policies

  • supervision conditions

  • work

  • recognition

  • responsibility

  • challenge

  • growth opportunities

Sales force goes to the customer

TM 9-5 (Fig. 9-5) Actions

Salespeople’s Perceived Reasons for Failure and Their Motivational Impact

Motivational impact

Perceived reasons Positive Negative

Ability Seek help; get Become frustrated additional training; and discouraged; ask for supervisor’s give up assistance; increase effort

Effort Work harder; make No change in behavior more calls; work longer hours

Strategy Change selling No change in behavior strategy; adapt the presentation

Task difficulty Work harder; Become frustrated change strategies; and discouraged; or seek help give up

Luck No change in behavior Avoid the situation

Sales force goes to the customer


TM 9-6


  • Primary concern is finding a suitable occupation

  • Underdeveloped skills and knowledge

  • Many drop out or are terminated

  • Low expectancy instrumentality, high valence for personal growth


  • Primary concern is improving skills and performance

  • Lack of promotion may cause disengagement or quitting

  • New commitments make pay important

  • High expectancy instrumentality, high valence forpromotion and pay


  • Primary concern is maintaining position, status, and performance

  • Have highest sales volumes and percentage of quota and pay

  • High valence for recognitions, respect, and pay

  • Low valence for promotion


  • Primary concern is preparing for retirement and/or developing outside interest

  • Low valence for higher order and lower order rewards

  • Low instrumentality

Sales force goes to the customer

Sales Contest Design Elements Actions

TM 9-7

Promote & Publicize

Sales Contest Design

Attractive Variety of Prizes

Equally Attainable Goals

Sales force goes to the customer


TM 9-8

  • No clear career path

  • Not managed adequately

  • Bored

  • Burned out

  • Economic needs met

  • Discouraged with company

  • Overlooked for promotion

  • Lack of ability

  • Avoiding risk of management job

  • Reluctance to be transferred

Sales force goes to the customer

TM 10-1 (Fig. 10-1) Actions

What a Good Sales Compensation Plan should Do

Efforts +

Results =



Treat customers properly

Attract and keep good people

Sales representatives’


Good sales compensation plan

Motivate the sales person

Economical yet competitive

Flexible and Stable

Security and incentive



Sales force goes to the customer

Potential Conflicts in Compensation Plan Design Actions

TM 10-2

Characteristics of Plan

Characteristics of Plan 1 2 3 4 5 6 7 8 9 10 11 12

1. Reward results __

2. Reward efforts C __

3. Provide steady incomeC __ __

4. Provide incentive__ C C __

5. FairC C C C __

6. Flexible__ C C __ __ __

7. SimpleC __ __ C C C __

8. Economical__ C C __ C __ C __

9. Competitive__ C C __ __ __ C C __

10. Controls and directsC __ __ C C C __ __ __ __

11. Consistent with company objectivesC C C C __ __ C __ __ __ __

12. StableC C __ C C C __ C __ C C __

C = Potential for conflict

Sales force goes to the customer

TM 10-3 Actions

Steps in designing a sales compensation plan

Include job elements controllable by sales force and measurable

Review job description

Identify plan’s objectives

Decide on indirect monetary compensation

Develop the method of compensation

Establish level of compensation

Pretest and install plan

Sales force goes to the customer

TM 10-4 Fig. 10-4 Actions

Building Blocks for a Sales Compensation Plan


Company Car

Profit Sharing


Moving Expenses


Other Business Expenses

Drawing Account










Sales force goes to the customer

Methods of Compensation Actions

TM 10-5

Method Advantage Disadvantage Best Used

Straight salary

Provides security and stability for reps

Better for directing and controlling sales activities

Ensures proper treatment of customers

Direct incentive is easily lost if not administered properly

Represents a fixed cost

Requires supervision to direct, control, and evaluate

For products that require a lot of presale and/or post-sale service

For building long-term customer relationships

When supervision is available for new recruits

For new territories

For missionary sales

Straight commission

Provides a strong incentive

Sales people have more freedom

Acts as a screening method

Difficult to direct and supervise sales people

Customers’ best interests may be ignored

Sales people’s earnings may fluctuate widely

When a strong incentive is needed to attain sales

For products that require little presale and/or post-sale service

The sale is a one-time sale

Adequate field supervision is not available

Company is in a weak financial position

Company uses part-time or independent sales people


Added incentive

Can be used for specific activities - flexible

To encourage above-normal performance of specific activities

Added cost

May be seen as inequitable if not administered properly

Sales force goes to the customer

TM 10-6 Actions

Possible Combination Compensation Plans




Sales force goes to the customer

Drawing Account Examples Actions

TM 10-7

Non-Guaranteed Plan

Month Draw Sales Volume Commission Earned End-of-Month Payment to Rep

January$1,800$40,000$4,000$2,200 ($4,000 - $1,800 = $2,200)

February$1,800$15,000$1,500$0 (rep owes $300)

March $1,800$30,000$3,000$900 (computed as follows)

Commission = $3,000

Less draw - 1,800

Less February debt - 300

Net $ 900

Guaranteed Plan

Month Draw Sales Volume Commission Earned End-of-Month Payment to Rep

January $1,800 $40,000 $4,000 $2,200 ($4,000 - $1,800 = $2,200)

February $1,800 $15,000 $1,500 $0 (rep owes $0)

March $1,800 $30,000 $3,000 $1,200 ($3,000 - $1,800 = $1,200)

Sales force goes to the customer

TM 10-8 Actions



  • Shared reward

  • Role-reward congruence

  • Team-member input

  • Peer evaluations

Sales force goes to the customer

TM 11-1 Actions

Factors Influencing Sales Force Expenses

Office supplies








Sales force goes to the customer

TM 11-2 Actions

Characteristics of a Sound Expense Plan

  • No net gain or loss

  • Equitable treatment

  • No curtailment of beneficial activities

  • Simple and economical

  • Avoidance of disputes

  • Company control of expenses and elimination

of padding

Sales force goes to the customer

TM 11-3 Actions

Salesperson Expense Options

Method Reimbursement Advantages Disadvantages

Salespeople pay None Simple, no costs Reps may not spend

Unlimited All legitimate Flexible and fair, Encourages excessive

their own expenses enough on customers

payment plan business expenses allows for territory spending


Limited Specific amounts Limited and predictable Inflexible

Possibility for $80/day - lodging switching expenses $45/day - food between categories $0.26/mile - transportation

Sales may resent

payment plan allowed expenses


Flat allowance $700 per week Limited and predictable Inflexible expenses Sales may resent

Sales force goes to the customer

TM 11-4 Actions

Factors Influencing Automobile Ownership Decision: Company Owned, Company Leased, or Salesperson Owned


Special design

Size of sales force




Personal preference


Administrative problems

Sales force goes to the customer

TM 11-5 Actions

Automobile Allowance Plans

Method Example

Flat amount $400 /month

Fixed mileage rate $.28/mile

Graduate mileage rate $.25/mile, first 15,000 miles $.15/mile, second 15,000 miles

Combination flat and $200/month + $.16/mile mileage rate

Sales force goes to the customer

TM 11-6 Actions

Other Methods of Expense Control

  • Training and enforcement

  • Credit cards

  • Expense bank account

  • Change in nature of entertainment

  • Telemarketing

  • Careful travel planning

Sales force goes to the customer

TM 12-1 (Fig. 12-1) Actions

Leadership Effectiveness

Personal characteristics

Managerial behaviors



Managerial skills


Sales force goes to the customer

TM 12-2 (Fig. 12-2) Actions

Leadership Behaviors and Styles




Problem solving








Team building





Conflict management

Sales force goes to the customer

TM 12-3 (Fig. 12-3) Actions

Basic Leadership Styles


low task and

high task and

high relationship

high relationship

Relationship behavior

low task and

high task and

low relationship

low relationship



Task behavior


Sales force goes to the customer

TM 12-4 Actions

Charismatic Leadership

Words and actions which transform the basic values, beliefs, and attitudes of employees in such a way that they are willing to perform beyond the standards levels expected by the organization.

  • Articulate a vision

  • Challenge the status quo

  • Provide a role model

Sales force goes to the customer

Reasons for Supervision Actions

TM 12-5


Sales assistance

Improved morale

Reasons for Supervision

Better performance


Sales force goes to the customer

Amount of Supervision Needed Actions

TM 12-6









Amount of Supervision

Sales force goes to the customer

(Fig. 13-1) Actions

Factors Shaping Sales Force Morale

Personal characteristics





and beliefs

Satisfaction with

The job/individual






and work



Sales force morale

Sales force goes to the customer

Dimensions of Job Satisfaction Actions

(Fig. 13-2)

Nature of the job












and status



and benefits




Sales force goes to the customer

TM 13-3 Actions

Effects of Sales Force Morale

Low Morale High Morale

Excessive turnover Organizational commitment

Unsatisfactory performance Citizenship behavior

Increased expenses Improved performance

Increased complaint behavior

Development of outside interest



Sales force goes to the customer

Morale Building Process Actions

TM 13-4

Integrate interests: match the person with the job

Foster open and frequent communica-tion

Develop a strong corporate culture and a supportive organizational climate

Sales force goes to the customer

Sales Forecasting Methods Actions

TM 14-1

Forecasting Advantages Disadvantages Best Used

Executive opinion Quick, easy, and simple Subjective For new products Lacks analytical rigor

Sales force composite Relatively simple Sales people are sometimes When reps are of a overly optimistic high caliber

Usually fairly accurate Sales people may sandbag When each rep has a Involves those people who (estimate low) in order to small number of are responsible for the results look better customers Time consuming

Survey of buyers Forecast is done by those who Time consuming For new products intentions will buy the product, so accuracy is good Cost When there are a small number of customers

Customer may not be cooperative

Trend projections: moving Objective and inexpensive No consideration for major For established products average exponential product or market changes regression analysis Use smoothing historical data When market factors are Require some statistical predictable analysis For aggregate company forecasts

Analysis of market factors Objective Unforeseen changes When market factors are stable and predictable Fairly accurate Fairly simple

Test markets Very accurate Time consuming For new products which do not require large Cost investments

Sales force goes to the customer

Sales Forecast Trend Projection Using Least Squares Method Actions

TM 14-2 (Fig. 14-8)

Time Period Sales ($millions)

Year (x) (y)

1996 1 7.2

1997 2 9.6

1998 3 12.8

1999 4 16.3

2000 5 21.9

2001 6 26.0

2002 7 27.9

2003 8 30.0

2004 9 32.1

2005 10 33.3

_ _

N = 10 x = 55 y = 217.1

x =5.5 y = 21.7 (x) 2 = 3025 xy = 1452.7

N x y - x y

N(x2 ) - (x)2

10(1452.7) - (55)(217.1)

b =




10(385) - 3025


a = y - bx 21.7 - 3.13(5.5) 4.48

y = a + bx 4.48 + 3.13(x)




Forecasted Sales

Forecast for 2006 (10-yr base) would be 4.48 + 3.13(11) = $38.9 million

Forecast for 2006 (4-year base) would be $35.4 million (calculation not shown)

Sales force goes to the customer

TM 14-3 (Fig. 14-7) Actions

Projection of Sales Trend by Least Squares Method









2006 forecast 10-year base


2006 forecast 4-year base

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Sales force goes to the customer

Market Factor Forecast: Dryever Diapers Actions

TM 14-4

Next Year Second Year

Projected population, ages 0-18 months4,850,000 4,800,000 Percentage using diapers100 100 Number using diapers 4,850,000 4,800,000 Average daily diapers per child 2.55 2.55Diapers daily, ages 0-18 months12,367,500 12,240,000

Projected population, ages 19-30 months 3,300,000 3,200,000 Percentage using diapers 80 80 Number using diapers 2,640,000 2,560,000 Average daily diapers per child 2.19 2.19 Diapers daily, ages 19-30 months 5,781,600 5,606,400

Projected population, ages 31-42 months 3,500,000 3,300,000 Percentage using diapers 40 40 Number using diapers 1,400,000 1,320,000 Average daily diapers per child 1.10 1.10 Diapers daily, ages 31-42 months 1,540,000 1,452,000

Total daily diapers, all ages 19,689,100 19,298,400 Percentage disposable diapers 95 95 Number disposables daily 18,704,645 18,298,400 Dryever market share percentage 20 20 Expected daily sales (units) 3,740,929 3,666,696 Wholesale price per diaper 0.07 0.07 Annual sales forecast in dollars 95,580,736 93,684,083

Sales force goes to the customer

Procedure for Designing Sales Territories Actions

TM 15-1 (Fig. 15-1)

Determine Basic Territories

Select a Control Unit

Determine Location and Potential of Customers

Assign Salespeople to Territories

Set Up Territorial Coverage Plans

Evaluate Effectiveness of Design

Sales force goes to the customer

Territory Size and Workload Factors Actions

TM 15-2

Workload Factor Territory Size Increase/Decrease

Nature of Job: Lots of presale and post-sale activity Decreases

Nature of product: A frequently purchased product Decreases A limited repeat-sale Increases

Market development stage: New market--fewer accounts Increases Established market--more accounts Decreases

Market coverage Selective coverage Increases Extensive coverage Decreases

Competition: Intensive Decreases (unless market is oversaturated: Limited Increases

Sales force goes to the customer

Buildup Method of Territorial Design Actions

TM 15-3 (Fig. 15-3)

Management must determine:

Desirable call patterns:

Call frequency per account per year

Total calls needed

in each control group

Workload capacity:

Total calls possible per rep per year = number of daily calls x days selling

Tentatively set territorial boundary lines by combining control units until total calls needed = total calls possible

Modify territories as needed

Sales force goes to the customer

Territory Design: Build-Up Method Worksheet Actions

TM 15-4

Control Units

Illinois Iowa Kentucky

Customer Call Calls Calls Calls

class frequency Accounts per year Accounts per year Accounts per year

A 2 per month 10 240 7 168 5 120

B 1 per month 30 360 17 204 10 120

C 1 every 2 months 68408 55330 27162

108 1,008 79 702 34 402

Distribution of one rep’s calls 1,008 + 491 or 402

year (1,500)*

Possible control combinations 100% 70% or 100% Illinois Iowa Kentucky

Alternative territories 100% Illinois + 100% Kentucky 100% Illinois + 70% Iowa

*6 calls/day x 5 = 30 calls/week x 50 = 1,500 calls/year

Sales force goes to the customer

Breakdown Method of Territorial Design Actions

TM 15-5 (Fig. 15-5)

Management must determine

Company sales potential

Sales potential in each control unit

Sales volume expected from each sales person

Tentatively set territorial boundary lines by combining control units total sales potential = total sales volume expected

Modify territories as needed

Sales force goes to the customer

TM 15-6 Actions

Territory Design: Break-Down Method Worksheet

Company sales potential = $200,000,000

Targeted volume rep = $ 10,000,000

Number of reps needed Company sales potential$200,000,000 Targeted volume/rep $ 10,000,000

Territory volume as Targeted volume/rep $ 10,000,000 Company sales potential $200,000,000

= = =


= =



Each territory should comprise 5% of sales potential or $10,000,000

Combine adjacent control units until each sales potential of $10,000,000

Sales force goes to the customer

TM 16-1 Actions

Functions of Budgeting

Sales budget

Planning of performance

Coordination of performance

Evaluation of performance

Sales force goes to the customer

TM 16-2a Actions

Sales Budget, 1998 Colorado Ski Company

Sales force goes to the customer

TM 16-3 (Fig. 16-1) Actions

Flow of Information from Sales Budget to Other Budgets

Sales budget

Sales department expense budgets (advertising, selling costs, administration)

Administrative expense budgets

Production department budgets

Profit and loss budget

Cash budget





Sales force goes to the customer

Purposes of Sales Quotas Actions

TM 16-4 (Fig. 16-2)

Indicate strong/weak spots in selling structure

Evaluate sales contest results

Furnish sales force goals/ incentives

Sales quotas are used ...

Control selling expenses

Control sales force activities

Improve compensation plan effectiveness

Evaluate sales force productivity

Sales force goes to the customer

Examples of Various Quota Bases Actions

TM 16-5

Quota Base Quota Actual Percent of Quota Attained

Sales volume, product line A $200,000 $200,000 110

Gross margin, product line B 30,000 25,000 83

Product demonstrations 120 135 117

Orders from new accounts 15 17 113

Expense quota 50,000 45,000 -10 or 110 Combination of all the above using equal weights 106.6

For the expense based quota, the objective is to come in below quota rather than above, or 10% below quota can be interpreted as attaining 110% of the goal.

Sales force goes to the customer

TM 17-1 Actions

Bases for Analyzing Sales Volume and Profit

Total gross margin

Total sales volume

District sales volume

District gross margin

Territory volume

Territory gross margin

By customer group

By product

By customer group

By product

Sales force goes to the customer

TM 18-1 (Fig. 18-5) Actions

Income and Expense Statement, by Sales Region, Colorado Ski Company, 1998 ($000).

Mid- Total Eastern western Western

Net sales $27,000 $9,000 $4,500 $13,500Less cost of goods sold 18,9006,3003,150 9,450Gross margin 8,100 2,700 1,350 4,050Less operating expenses: Personal selling 3,847 1,070 802 1,975Advertising 1,220 420 220 580 Warehouse/shipping 480 190 125 165 Order processing 240 79 56 105 Administration 513 171 171 171Total operating expenses 6,300 1,930 1,374 2,996

Net profit (loss) $1,800 $ 770 ($ 24) $ 1,054

Net profit (loss) as percentage of sales6.7% 8.6% (0.53%) 7.8%

Sales force goes to the customer

Income and Expense Statement, by Sales Region, Colorado Ski Company, 1998 ($000), using contribution-margin approach

TM 18-2

Mid- Total Eastern western Western

Net sales $27,000 $9,000 $4,500 $13,500 Less cost of goods sold 18,9006,3003,1509,450 Gross margin 8,100 2,700 1,350 4,050 Less direct operating expenses: Personal selling 3,082 845 595 1,642 Advertising 732 254 127 351 Warehouse/shipping 160 64 42 54 Order processing 130 4330 57 Total direct operating expenses 4,104 1,206 794 2,104 Contribution margin $ 3,996$1,494$ 556 $1,946 Less indirect operating expenses: Personal selling 765 Advertising 488 Warehouse/shipping 320 Order processing 110 Administration 513 Total indirect expenses $ 2,196 Net profit (loss) $ 1,800

Sales force goes to the customer

Return on Assets Managed (ROAM) Costs

TM 18-4

Sales $ 10,000,000 Cost of goods sold 7,000,000 Gross margin 3,000,000 Salaries 150,000 Commission 850,000 Travel 150,000 District office expense 400,000

Total direct expenses 150,000 Contribution margin $ 1,450,000

Accounts receivable 2,200,000 Inventories 2,000,000

Total assets $ 4,200,000

Contribution margin Sales volume

1,450,000 10,000,000

Profit on sales % = = x 100

= 14.5%

Sales volume Accounts receivable + Inventories

$10,000,000 $ 4,200,000

Asset turnover = =

= 2.38

ROAM = Profit on sales % x Asset turnover

1,450,000 10,000,000

10,000,000 4,200,000

= x

= 14.5% x 2.38 = 34.5%

Sales force goes to the customer

TM 19-1 (Fig. 19-1) Costs

Procedures for Evaluating Sales People

1. Establish basic policies

2. Select evaluation bases

3. Set performance standards

4. Compare performances to standards

5. Discuss results with sales people

Sales force goes to the customer

Output Factors Used as Evaluation Bases Costs

TM 19-2 (Fig. 19-2)

  • Sales volume

  • Sales volume as a percentage of:

  • Orders

In dollars and in units By products and customers (or customer groups) By mail, telephone, and personal sales calls

Quota Market potential (that is market share)

  • Gross margin by product line, customer group, and order size

  • Number of orders Average size (dollar volume) of order Batting average of canceled orders

  • Accounts

Percentage of accounts sold Number of new accounts Number of lost accounts Number of accounts with overdue payment

Sales force goes to the customer

Input Factors Used as Evaluation Bases Costs

TM 19-3 (Fig. 19-3)

  • Calls per day (call rate)

  • Days worked

  • Direct selling expense

As percentage of sales volume As percentage of quota

  • Nonselling activities

Advertising displays set up Letters written to prospects Telephone calls made to prospects Number of meetings held with dealers and/or distributors Number of service calls made Collections made Number of customer complaints received

Sales force goes to the customer

Evaluation Bases Costs

TM 19-4

Base OUTPUT INPUT Historical Goal Share Others Source

Possible Bases of Comparisons

To Target/ Market To

Sales volume * * * * * Company records

Gross margin * * * * Company records

Orders * * * * Company records

Calls/day * * * * Sales force call reports

Days worked * * * * Sales force call reports

Selling time * * * * Sales force call reports

Selling expense * * Company records

Activities * * Sales force call reports

Knowledge * * Sales manager

Sales presentation * * Sales manager


Resourcefulness * * Sales manager

Customer relations * * Sales manager/customer

Attitude * * Sales manager/customer

Sales force goes to the customer

TM 19-5 Costs

Basic Performance Equations




Days worked



Sales = Days worked x x x

Sales = Days worked x Call rate x Batting average x Average order


Sales = 250 x 4 x .5 x 1000

Sales = 1000 x .5 x 1000

Sales = $50,000

Sales force goes to the customer

TM 20-1 Costs

Illegal Sales Practices

  • Granting price concessions that are not justified or that

  • Making false claims about your product and the services

  • Representing a product to be new when it is rebuilt or

  • Misleading customers into thinking they are getting a

  • Bribing customers’ employees in order to acquire or hold

  • Using bribery or espionage to learn a competitor’s trade

are not necessary to meet competition

that accompany your product


bargain when this is not the case

an account