UU-MBA-SEM-III- Sales and Distribution Management-48-125
UU-MBA-SEM-III- Sales and Distribution Management-48-125
UU-MBA-SEM-III- Sales and Distribution Management-48-125
STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Size of the sales force
2.3 Sales organization based on
2.3.1 Customer
2.3.2 Geography
2.3.3 Product and combinations and current trends
2.4 Sales training programmes and motivating the sales force
2.4.1 Sales force compensation
2.4.2 Sales force incentives
2.4.3 Sales force evaluation
2.5 Controlling the sales effort
2.5.1 Sales quota
2.5.2 Sales territories
2.5.3 Sales audit
2.6 Let Us Sum Up
2.7 Key Words
2.8 Some Useful Books
2.9 Answer to check your progress
2.10 Terminal Questions
2.0 OBJECTIVES
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Controlling the sales effort viz., sales quota, sales territories and
sales audit.
2.1 INTRODUCTION
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Here are the objectives of any salesforce which are desired by the sales
management:
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1. Pre-Sale Preparation
Before making sales every sales manager needs to gather information
regarding the product and about the customer’s problems as well. Since
customers face problems regarding the use of the product or purpose or
details or features of the product.
So, a sales force needs to know about the product and they have to prepare
and find solutions for customers problem. According, to sales force
definitions sales-person, must prepare themselves regarding company,
product, market, customers, environment, competitors.
Organization prepare provide sales and leadership training programs to
develop skills for problem-solving and understanding customers’
demands.
2. Prospecting
After preparing themselves about the surroundings, products etc, now
salesperson needs to find the prospects. Prospects refer to potential
customers. Prospects are the people, who are unwilling, not have the
ability, unsatisfied, not knowledgeable about the product to buy.
As, the sales force definition describes salesforce find the potential
customers from current customers, other sales-people, online actives,
location targeting. Afterwards, the salesforce prepares the list of prospects
who have the willingness, power, and motivation to buy the product. So,
the salesperson can approach them for sale.
3. Pre-Approach
Once the salesperson has selected their prospects, now it’s time to prepare
them for the sale. Sale preparation includes finding the customers
problems, needs and wants. Afterwards, the salesperson finds solutions to
customer problems.
Last, they prepare their presentation in such a way that it provides a
solution and make a sale to the customer.
4. Approach & Sales Presentation
In the next step as the sale force definition describes the salesperson who
contacts the customer. Contacting can be in form of face to face, phone,
interview, and the salesperson. The approach consists of two major parts.
Obtaining an interview, and the first contact.
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Once the salesman has sought and found potential customers and he has
matched their wants with his product, he is ready to formally present that
product to the customer.
The presentation can be:
1. Oral
2. Visual
3. Verbal
A good presentation must be:
1. Clear
2. Complete
3. Confident
4. No demining of Competition
5. Post-Sale Activities
As the sales force definition describes the customer’s problems and
solution. Post-sale activities include analyzing performance.
Analyzing what wrong and what good has been done on how to improve
the sales force process to improve sales management and the organization
revenue.
Another thing which counts in the post-sales activity is customer relation,
post-sales services. To build strong relationships with the customer, it is
important to provide post-sale service, ask them about their experience. It
not only builds strong relationships with customers but also makes future
sales with the customer easier.
Post sale Activity Must include:
1. Post-sale services
2. Feedback
3. Asking for any other requirement
Sales Force Planning In Sales Management
Definition describes the sales managers have to plan their every step in
sales management. Sales force planning incudes the objectives, barriers
etc. to how to create a call of action.
Careful sales force planning gives a much clear vision to the organization
and a proper roadmap for the sales department to follow.
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Here are the steps which sales force planning follows while doing:
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These were the few sales force examples of industries that helps to connect
the theoretical knowledge of sales force definition to a real-life example.
In most companies, the sales force is the most critical part of the business;
thus determining the sales force size is critical in planning for sales
governance. Although the corporate sales team is one of the most valued
assets of the company, it can also be expensive to maintain. Increasing the
size of the sales force may increase sales volume but at a higher cost to the
company. It is therefore necessary to determine the optimal sales force
size. The size of the sales force will also affect territory design.
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The three most commonly used methods to determine sales force size
are as follows:
Breakdown Method
This is the simplest method among the three. In this method, each member
of the corporate sales team is assumed to possess the same level of
productivity. In order to determine the size of the sales force needed, the
total sales figure forecasted for the company is divided by the sales likely
to be generated by each individual.
However, this method fails to account for differences in the ability of
salespeople and the difference in potential of each market or territory. It
treats the sales force as a function of the sales volume, and does not take
profitability into account.
Workload Method
The workload method is also known as the buildup method. In this
method, the total workload (i.e., the number of hours required to serve the
entire market) is estimated. This is divided by the selling time available
per salesperson to forecast the size of the sales force. This method is
commonly used since it is easy to understand and to recognize the effort
required to serve different categories of customers.
However, this method also has some shortcomings. It assumes that all
accounts in the same category require the same effort. Other differentiating
factors such as cost of servicing, gross margins, etc. are not considered
after the accounts are categorized. It also assumes that sales persons are
equally efficient, which is generally not true. One way to overcome this
shortcoming is to adjust the sales force size, determined in the last step,
for efficiency. The sales force can be classified into different categories
based on their efficiency and the actual number of sales persons required
can then be calculated with this adjusted number.
Incremental Method
The incremental method is the most precise method to calculate the sales
force size. The underlying concept is to compare the marginal profit
contribution with the incremental cost for each sales person. The optimal
sales force size as per the incremental method is when the marginal profit
becomes equal to the marginal cost and the total profit is maximized.
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Beyond the optimal sales force size, the profit reduces on addition of an
extra sales person. Therefore, sales people need to be added as long as the
incremental profit exceeds the incremental cost of adding sales people.
The main shortcoming associated with this approach is that it is difficult
to estimate the additional profit generated by the addition of one
salesperson and is therefore difficult to develop.
Thus sales force needs to be properly organized, motivated and
compensated in order to have the right size to do the workload, alignment
to cover all needs, and keeping them happy and selling. At the end of the
day, they are the ones who get the customer to give up their money for the
company’s product or service.
Check your progress - 1
a. In ___________ method, each member of the corporate sales team is
assumed to possess the same level of productivity.
b. The ___________ method is also known as the buildup method.
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This is the oldest type used in smaller firms and in firms where
there is a small selling force. This limitation restricts them to
narrow product line in limited geographical area.
All executives have line authority and each subordinate is
responsible only to one higher-up.
They have fixed responsibilities and sales personnel reports
directly to the chief executive.
Lines of authority and responsibility are clear and logical, and it is
difficult for individuals to shift or evade responsibilities.
Not appropriate when there is a large sales staff.
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2.3.1 geography
An advantage of this form of organization is its simplicity. Each sales
person is assigned a territory over which to have sole responsibility for
sales achievement.
Their close geographical proximity to customers encourages the
development of personal friendships which aids sales effectiveness. Also,
compared with other organizational forms, for example, product or market
specialization, travelling expenses are likely to be lower.
A potential weakness of the geographical structure is that the sales person
is required to sell the full range of the company’s products. They may be
very different technically and sell into a number of diverse markets.
In such a situation it may be unreasonable to expect the sales person to
have the required depth of technical knowledge for each product and be
conversant with the full range of potential applications within each market.
This expertise can only be developed if the sales person is given a more
specialized role.
2.3.2 products and combinations and current trends
One method of specialization is along product lines.
Conditions that are conducive to this form of organization where the
company sells a wide range of technically complex and diverse products
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Yet, at the same time, it turns out that Top Performers are
significantly more likely to receive effective sales training.
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For today’s sales training to be effective, it must meet sellers and sales
managers where they are.
Your guide to sales training
1. What are the different types of sales training?
2. What are the benefits of sales training?
3. Measures of sales training success
4. Who are sales training for?
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5. What are the skills you can learn with sales training?
6. Best sales training topics to build skills
7. How to build an effective sales training program?
8. Sales training ideas to keep your training fresh
9. Sales training techniques for new trainers.
10 Why does sales training fail?
11. What to look for when hiring a sales trainer?
The most effective sales training focuses on true behavior change. Skills
need to be learned, absorbed, and applied on the job. When done right,
training can help organizations achieve their growth goals, such as
increasing win rates, growing strategic accounts, improving sales cycle
time, building pipeline, increasing average deal size, and more.
The global market for sales training is approximately $4.6 billion, yet
most sales training fails to deliver lasting results.
This is because most companies don't define and approach sales training
properly. Often, training is treated as a 1- or 2-day program with no follow-
up. Sellers are left to their own devices, expected to retain the information
from training and recognize where to apply it.
When you consider that 70% of B2B sales reps forget the information they
learn within a week of training, it's no wonder most sales training doesn't
produce the desired results over the long term.
To deliver effective sales training, redefine what sales training is. Focus
on changing sellers' behavior to drive sales results and support the effort
as an ongoing change management initiative.
What Are the Different Types of Sales Training?
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Take any one of these away and the likelihood of achieving top sales
performance declines.
Meanwhile, an effective sales coaching process helps individual sellers
and entire sales teams to build skills, reinforces what they learn, and holds
them accountable to achieve goals and plans.
3. Sales Consulting
Your leadership team likely has plenty of ideas about what could be done
to improve sales. But with competing priorities around people, structure,
process, compensation, management, and training, it’s difficult to know
where to begin and what to prioritize.
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Assignments
Coaching
Gamification
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Micro-learning
AI tools
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The best sales training can result in both strategic and financial benefits
for the organization:
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These are just a few examples. Ask yourself, "What’s the current state of
our organization’s sales training?" Then, consider what the new reality
would look like with an effective sales training initiative. An experienced
sales consultant is a valuable resource here—they can help you do this
analysis and develop the blueprint that will get you to your desired results.
Measures of Sales Training Success
Your sales training provider should work with you to identify what your
sales training goals are and how these goals will be achieved, as well as
work with you to determine how success will be measured. If your current
provider isn’t doing this, it may be time to search for a new one.
Key performance indicators (KPIs), identified at the outset of a training
initiative, and are used as measures of success. Common examples of
KPIs, which will vary based on your objectives, may include any of the
following:
Lead Measures
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Lag Measures
1. Win rate on proposed sales
2. Average sale/order value
3. Time to productivity
4. Percent attainment of sales goal
5. Discounting/profitability of sales
6. Average account revenue
7. Average revenue per seller
8. Repeat business rate/churn
9. Length of sales cycle
10. Sales force turnover rate
Discover additional sales metrics that may be relevant for your business in
our Essential List of Sales Metrics.
Who Is Sales Training For?
Sales training isn’t just for sellers. Where capability gaps exist, skills must
be developed for all sales professionals and sales managers in an
organization.
1. Sales Professionals
With titles such as sales rep, inside sales, field sales, business development
rep (BDR), account manager, account or sales executive, customer service
rep (CSR), seller-doer, professional or business service provider, and
more—these sales professionals are responsible for some or all aspects of
working with buyers in the sales cycle.
This means, depending on the role, they need to develop and maintain a
high level of capabilities in a variety of areas. This could include sales
conversations, advanced consultative selling, winning major sales,
strategic and key account management, sales prospecting, sales
negotiating, virtual selling, and personal productivity. Learn more. >>
2. Sales Managers
Managing a sales team is one of the more challenging, and more important,
roles in any company. Your sales managers will make or break your sales
team.
The manager’s impact is especially strong among newer sellers.
According to our research, newer sellers are 240% more likely to be a Top
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Performer when they have an effective manager. And those sales managers
are 46% more likely to be effective when they themselves have received
effective training.
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succeed. Virtual selling training helps sellers adapt and thrive in this new
sales environment.
7. Improved Sales Productivity and Accountability
Mismanaged time doesn’t just derail focus and productivity—it affects
your sales results. Keeping your sellers motivated is essential to seeing
consistent success. Most sales training misses this key element: a sales-
focused productivity program that empowers sellers to get more done in
the time they have.
8. Sales Management
The skills that make a successful seller are very different than those that
make a successful sales manager. In fact, managing a sales team is one of
the most difficult jobs in any organization. Sales management
training helps managers unlock their team’s potential and drive results.
9. Sales Coaching
There is perhaps no greater leverage point—and perhaps no greater
typically untapped leverage point—to increase sales performance than
sales coaching. Yet, 66% of organizations don’t believe their managers
have the skills needed to manage and coach their sellers. Sales coaching
training gives sales managers the tools they need to motivate their sellers
to become more proactive and successful.
Best Sales Training Topics to Build Skills
Which topics should your sales training cover? It depends on the team’s
current capabilities and areas that need to be strengthened.
Below are just a few of the top areas where sellers often fall short.
Consider adding one or more these topics to your sales training initiatives.
1. Leading a Thorough Needs Discovery
You might think your sellers have this core capability covered, but think
again. Only 26% of buyers say sellers lead a thorough needs discovery.
Training on leading an effective needs discovery process helps sellers craft
solutions that deliver value to the buyer. (See the power of consultative
selling above.)
2. Overcoming Objections
How sellers respond to buyer objections will determine the course of the
sale. Consultative sales training helps sellers practice appropriate
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Deliver
Sales training delivery should be:
In other words, sellers need training they can put to use immediately to
achieve results. This means the training needs to ensure the development,
adoption, and implementation of new skills.
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Here’s a sampling of ideas you can incorporate into your training to keep
it fresh and impactful.
1. Assess Sales Skills in a Self-Assessment
Allow sellers to take a sales skills self-assessment—it gives them the
opportunity to honestly assess their selling capabilities. Which skills can
be strengthened? Which are important to the seller’s success? To be
effective, be sure to assess on capabilities key to being a top-performing
seller.
2. Build a Goal and Action Plan
Keep sellers on track and focused on the activities that'll allow them to
achieve their goals by encouraging them to create their own goal and
action plans. Our five-step goal-setting worksheet can be used by sellers
to build their plan during the training session and as a point of follow up
with subsequent coaching and one-on-one meetings.
3. Use a Sales Conversation Planner
Have sellers use a sales conversation planner to prepare for important
buyer conversations. A completed conversation planner prepares sellers to
get the best possible outcomes from their sales conversations with buyers.
4. Practice a Proposal Presentation
Sellers record themselves doing a practice delivery of a proposal and then
get feedback from colleagues or a coach. Sellers gain perspective on the
strengths and weaknesses of the presentation. They can also test out
different openings, closings, or any presentation component before trying
it in front of actual buyers.
5. Practice a Simulated Sales Negotiation
An online simulated sales negotiation, like the one RAIN Group offers,
gives sellers the opportunity to practice their negotiation skills based on
real negotiation scenarios. This prepares sellers to negotiate and interact
with actual buyers so they achieve the best outcomes.
6. Complete a Prospecting Meeting Calculator
Give sellers a prospecting meeting calculator to determine how many new
meetings they need to set on average, and each week, to meet their revenue
goals. Walk through examples specific to your business so sellers can see
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how improving their pipeline and conversion rates can have a bit impact
on results.
Sales Training Techniques for New Trainers
The sales training techniques you incorporate into training can help sellers
(and their managers) absorb new information and develop skills.
Here are just a few examples.
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3. Lack of retention
Go beyond knowledge transfer. Instead, show sellers how to apply what
they’re learning to their actual selling situations. Application exercises, a
regular ongoing schedule of coaching, repetition of training content...these
are all ways to boost retention and ensure training is actually applied.
What to Look for When Hiring a Sales Trainer
By this point, you likely realize the heavy lift that sales leaders, learning
and development, and sales enablement professionals face as they embark
on selecting a sales trainer or sales training provider to deliver effective
sales training that gets results.
Here are 13 factors to consider and evaluate when you’re hiring a sales
training provider.
1. Transformational Experience
The best and most effective sales training is approached as a change
management initiative. Training is crafted, delivered, and designed to
enable sellers and the organization to get results. For true behavior change
to take hold, sellers need to go through a transformational experience. This
means the training provider must understand how adults learn, how people
work (and work together), and how behaviors change.
2. Coaching
Coaching and support from first-line sales managers is critical for driving
behavioral change. When applying new skills, sellers need to know exactly
what to do, have support for when they're not in their comfort zone, need
feedback to calibrate their behaviors, and need to be held accountable for
taking action and being productive.
It’s worth noting that sales coaching and sales management differ.
Coaching is a proactive process meant to reinforce training, and not every
sales leader or manager has that experience. In these cases, specialized
sales coaching training can enable managers to take ownership of the skill
development of their teams.
Does the sales training provider offer a coaching process that enables sales
managers to support their sales teams?
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3. Leadership Support
Conversely, sellers also need support on the day-to-day side of executing
ideas learned in training. Leadership should be committed to working with
the training provider and the sales training program to help execute
training, as well as monitor its application.
You need a work culture that drives and supports top sales performance,
and leadership that prioritizes sales success.
Are you confident the sales training provider can garner buy-in and
support from your leadership?
4. Motivation
Without motivation, you won't change sellers' behaviors. It’s why
motivation is one of the key coaching roles played by sales managers. In
fact, our research finds that Top-Performing Sales Managers are 71% more
likely to be effective at motivating sellers for high productivity and
performance. Yes, sales motivation goes beyond compensation.
Does the training provider explicitly build this critical success factor into
their training?
5. Value
When sellers create value and are valuable to buyers, they win. All sales
training must connect to the value you can bring forth to your buyers. For
the most successful sales training, and to achieve—and maintain—top
performance, value must be the core focus.
How will this training help your sellers drive more customer value?
6. Proven Results and Case Studies
Sales training companies have a mixed record of implementation and
client service.
Does the training provider have demonstrated experience and results in
changing seller behavior and making training stick long term?
7. Industry Expertise
Sales trainers lacking experience in the sellers’ industry lose credibility
with learners. Without industry experience, trainers will be hard pressed
to keep sellers engaged and involved with the training. Make sure the
training provider understands your industry deeply—it's challenges,
business model, current issues and changes, and selling environment.
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What experience does the sales training provider have in your industry?
8. Research-Based Training
By its nature, sales isn’t static—to be successful sellers must be responsive
to their buyers’ current environment and adapt to market changes as
needed. It’s not enough for trainers to simply roll out a dated playbook to
deliver sales training content.
Sales training providers that conduct their own research can share relevant
insights and strategies for succeeding with buyers based on current, and
anticipated, conditions.
What research backs the training providers’ sales methods?
9. Variety of Delivery Methods
According to research from Gartner, sellers forget 70% of the information
they learn within a week of training; 87% forget it within a month. But
when sellers are introduced to information over time using multimedia,
80% of the information is retained and learning improves.
Does your provider deliver training exclusively through one channel? For
example, in-person classroom sessions alone? If so, sellers are less likely
to retain what they learn. Look for a provider that delivers multi-modal
training to boost retention and application.
Typical training modalities include:
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Easy to use
Optimized for sellers
Provides easy-to-access resources for sellers (e.g., tools, templates,
planners, checklists)
Offers practice and reinforcement
Reporting
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getting asked to leave. Leading us to one of the most difficult tasks sales
managers and sales executives have to face, employee retention. The
average sales rep turnover is 34% according to Trish and Matt Bertuzzi of
The Bridge Group, who conducted a survey of 342 software as a service
(SaaS) companies. Another alarming statistic is that one in ten companies
have sales rep turnover rates above 55%. These numbers are troubling not
only to sales managers but also to the entire company, since it costs a lot
to replace employees. Statistics on the cost of employee turnover greatly
vary. Add in the cost of missed sales and this ends up being even higher.
These numbers demand for a better sales management processes.
A Carrot Isn’t Good Enough: How to Motivate Your Sales Team
The heart of the problem is motivation. If teams stay motivated during
good and bad times, sales have a way of balancing themselves out. So in
an effort to motivate employees, managers devise incentive programs like
trips, gift cards, and cash rewards. Of course the opposite may also happen,
like imposing consequences such as docked pay or being given a smaller
sales area for not meeting quotas.
But there’s a problem with these traditional sales motivation strategies:
they don’t work.
The answer to the question ‘how to motivate people’ lies in training sales
leadership to understand the social science behind motivation. Motivation
strategies tied to external rewards or penalties are not the answer for
forward-thinking businesses. “Traditional management is fine if you want
compliance,” explains business analyst and best-selling author, Dan Pink.
“Twentieth century motivators do work but only in a narrow band of
circumstances.” The “narrow band of circumstances” Pink refers to are
basic straightforward tasks that require little flexibility, critical thinking,
or problem solving abilities. Unfortunately, most sales situations don’t fall
into the narrow band; today’s sales situations require being able to apply
critical thinking, business and sales acumen, and product knowledge to a
wide range of situations. Luckily, these are skills that can be taught.
Twenty-first century sales require twenty-first century skills and
motivation. However, businesses still try to motivate with extrinsic
rewards (money, prizes, cash) when the focus should be on intrinsic
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rewards. Pink points to numerous studies over the past 40 years which
show that rewards tied to behavior, or contingent motivators, actually
decrease performance.
Compensation Plans Matter
Before further explaining intrinsic rewards and how to motivate your team,
let’s make it clear that compensation plans matter. And they matter a lot.
Pink advocates paying employees enough so that they don’t worry about
money because ultimately, what will help your team stay motivated isn’t
the carrot. It comes from within.
When people are allowed to focus on tasks in a way that matters to them,
the outcomes are greater than within the traditional reward system. Pink
explains what social science says regarding how to motivate people:
intrinsic motivators.
Autonomy. Mastery. Purpose.
Human beings have an innate inner drive to be autonomous, self-
determined, and connected to one another. And when that drive is
liberated, people achieve more and live richer lives. -- Daniel Pink
Pink asserts businesses have largely ignored the past 40 years of social
science research on how to motivate people. Learning the value of intrinsic
motivators “is one of the most robust findings of social science and also
one of the most ignored,” emphasizes Pink. “The solution is not to do more
of the wrong things...to entice with a sweeter carrot or threaten with a
sharper stick.”
The question of how to motivate people—especially how to motivate
salespeople—has long been a puzzle. The way to motivate people,
explains Pink is to use intrinsic motivation. Intrinsic motivation is not just
a new buzzword. Pink cites study after study to prove people need more to
be motivated than simple rewards. The three key elements advocated by
Pink are autonomy, mastery, and purpose. Pink explains these three traits
are the new principles of motivation.
Autonomy
When businesses give their employees more flexibility to set their own
priorities, schedules, goals, and work habits, teams feel a greater sense of
ownership and therefore motivation. Examples of autonomy in the
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workplace include the ability to telecommute, the freedom for sales reps
to set their own hours as long as the work gets done, or offering unlimited
vacation days as long as quotas are met.
While autonomy over schedule may be more difficult in a call centre or
customer service setting where hours need to be covered, there are other
areas where autonomy can be integrated. Allowing sales or customer
service reps to set their own goals and choose their own metrics are
examples of intrinsic sales motivation techniques.
Mastery
The second tenet of sales motivation Pink advocates. People don’t want to
be robots. They want to feel achievement. They want to succeed.
Oftentimes, however, they don’t know how. It’s not that companies don’t
spend lavish amounts on training their salespeople in sales training
seminars, explains Jason Jordan in his book Cracking the Sales
Management Code.
The problem of mastery comes when sales managers are not equipped with
the skills to help their sales teams set and meet the right goals. ”With
extremely rare exception,” teaches Jordan, “the best sales managers we’ve
encountered are unconsciously competent scientists. They hold formal
meetings with formal agendas on formal schedules. They set rigorous
expectations for their salespeople and track progress against those goals
with equal rigor. They manage by analysis rather than anecdote and by
measurement rather than gut. They are continuous-improvement experts
with action plans galore.”
A great sales manager, who actually teaches sales teams rather than simply
inspects them, can motivate their team to master the skills needed to
achieve.
Purpose
The last key to motivating people is purpose. Largely, says Pink, people
will achieve more when they serve a purpose larger than themselves. As a
company, seek to define a purpose bigger than achieving profit. For
example, aim to deliver the best product or service for your customer.
Embrace values such as excellence, service, and teamwork. A sense of
purpose becomes even more clear when companies team up with charities.
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The trick is to teach sales reps to jump into the cycle. But be careful to set
the right kind of objectives. Sales leadership is key in helping teams set
the right kind of goals.
Goals should focus on behaviour you can control. For instance, you can
control the number of calls your outbound marketing team makes. If you
know that 100 calls produce 5 number of sales, when you increase the
number of calls to 200, you can double your qualified leads. Through
customised CRM dashboards, sales teams can track their personal progress
towards their goals.
A Harvard study showed that going through a goal-setting intervention
actually increased results by 30 percent. Imagine if every sales rep on your
team improved by 30 percent! That’s a powerful lesson in the need to learn
goal-setting skills.
Every goal-setter knows that goals should be specific, time limited,
achievable, and measurable. What most goal-setters don’t realise is that
goals can have unintended negative consequences. Jason Jordan explains
that choosing the wrong metrics and wrong goals “creates a culture of
inspection” and if goals—especially the wrong goals—are focused on too
intently, an atmosphere of “compliance and anxiety” results. A setting
where goals, sales metrics, and KPIs are used without skill creates a
culture without the autonomy, mastery, and purpose which are crucial to
motivation.
The lesson: let your sales team choose their goals (autonomy), train the
sales managers to coach--—not inspect—their progress (mastery), help the
entire organization become excellent at serving the customer or
community (purpose).
In the end it pays to be motivated
Intrinsic motivators—the motivations that come from within—are THE
motivators. Unfortunately business practice doesn’t often mirror the
research. “There is a mismatch between what social science knows and
what business does,” argues Pink. Money is important to salespeople, but
if your company wants to do well, money or any other carrot shouldn’t be
the motivator.
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Being quite easy to calculate, this model may be not motivating enough.
Say, if a person is okay with 80% of the quota, they will not be driven for
selling more.
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Tangible prizes
Physical rewards are another excellent incentive, especially if the reward
is something that your team can use every day. Consider items that
improve their workflow or personal items that they can enjoy at home:
Development rewards
Professional development and continuous learning are equally important
motivators. For instance, offering your team the chance to participate in a
course or development seminar gives them the opportunity to develop new
skills and work together to improve sales outcomes for the company and
themselves.
The following ideas are great incentive perks to consider in a sales
incentive plan:
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Monetary incentives
Monetary rewards are an effective sales incentive. A great way to
incorporate monetary rewards is to provide an equal reward for the whole
team, that way all team members receive recognition.
Here are a few monetary incentive ideas:
Gift cards
Bonus checks
Cash rewards
Experience-based rewards
Exploration and experience are excellent sales incentive ideas because
they provide employees the opportunity to create memories and enjoy
meaningful activities.
Consider ideas like:
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on the team and to the organization's goals. Consider the following tips for
an effective and successful sales incentive plan:
Find out what motivates the team
Figuring out what motivates your team can help you design a plan that can
interest them. You can create a simple survey to find out what the majority
of your team members enjoy, what they're interested in and what motivates
them. Find similar interests and motivators that your team has in common,
and then discuss these ideas with your team. You'll likely receive valuable
feedback on what your team would like to see as an incentive, and this is
important because it will set you up for providing something truly
meaningful as recognition for your team's accomplishments.
Set achievable team goals
It can help to ensure the objectives you set for your sales team are
reasonable. You can use individual objectives to create an overall average
for the entire team. For example, a car sales manager might set individual
objectives of selling a dollar amount while the team could share the total
of these individual goals. Here, the team works toward a collective goal
while further improving their individual skills that support the
achievement of these goals. Consider reviewing average sales per
employee to determine what might be an acceptable goal to meet and
exceed.
Determine the metrics of the plan
Consider setting measurable criteria that tell you when your team meets
objectives. For instance, this can be a daily amount in sales, a weekly quota
of products sold or another metric that you can easily measure to evaluate
achievement and performance. Additionally, the metrics you implement
might be most effective if they are simple and not overly complex so you
can easily and quickly measure performance and progress.
Combine monetary and non-monetary incentives
It's also important to alternate between incentive ideas, especially with
teams who have diverse interests and motivators. Try a different incentive
each month or quarter so your team has a way to enjoy a range of
incentives. For example, you can offer a team cash bonus for the first
quarter, a weekend getaway for the second quarter, tickets to a sporting
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event during the third quarter and another monetary reward in the fourth
quarter.
2.4.3 Sales Force Evaluation
Salesforce evaluation is the comparison of salesforce objectives with
results. A model of the evaluation process is shown in Figure 17.1. It
begins with the setting of salesforce objectives which may be financial,
such as sales revenues, profits and expenses; market-orientated, such as
market share; or customer-based such as customer satisfaction and service
levels. Then, the sales strategy must be decided to show how the objectives
are to be achieved. Next, performance standards should be set for the
overall company, regions, products, salespeople and accounts. Results are
then measured and compared with performance standards. Reasons for
differences are assessed and action taken to improve performance.
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actual results can be compared against those standards. For the sales team
as a whole, the sales budget will be the standard against which actual
performance will be evaluated. This measure will be used to evaluate sales
management as well as individual salespeople. For each salesperson, their
sales quota will be a prime standard of sales success. Standards provide a
method of fairly assessing and comparing individual salespeople. Simply
comparing levels of sales achieved by individual salespeople is unlikely to
be fair since territories often have differing levels of sales potential and
varying degrees of workload.
Gathering information
The individual salesperson will provide much of the information upon
which evaluation will take place. They will provide head office with data
relating to sales achieved by product/brand and customer, a daily or
weekly report of the names of customers called on and problems and
opportunities revealed, together with expense claims.
Such information will be supplemented by sales management during field
visits. These are important in providing more qualitative information on
how the salesperson performs in front of customers, as well as giving
indications of general attitudes, work habits and degree of organizational
ability, all of which supplement the more quantitative information
provided by the salesperson.
Market research projects can also provide information on the sales team
from customers themselves. A specific project, or a more general one
which focuses on the full range of customer–seller relationships, e.g.
delivery, product reliability, etc., can provide information on salespeople’s
performance. A market research study commissioned by Perkins Engines
found that salespeople with technical backgrounds were basing their sales
presentation on features which were not properly understood by their
audience.1 This led Perkins Engines to retrain their salesforce so that their
sales presentation focused upon a simple presentation of features and the
customer benefits which arose from those features.
Finally, company records provide a rich source of information for
evaluation. Records of past sales levels, calls achieved, expense levels, etc.
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can provide bases for comparison and indications of trends that can be
used both for evaluation and objective setting.
Check your progress - 3
a. _______ training is the process of improving seller skills, knowledge,
and attributes to drive seller behavioral change and maximize sales
success.
b. ___________ can help sellers improve skills, win specific sales
opportunities, grow accounts, achieve sales goals, and accomplish action
plans.
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When creating targets, it's important that you can accurately measure and
compare performance in terms of productivity, efficiency, sales, and
customer service.
4. Create evaluation guidelines
After you've set your performance standards, the next step is to create a
set of evaluation guidelines that you can use when measuring employee
performance. When creating a sales control system, it's important that you
have a set of standards to compare employee performance to. Create a
schedule that specifically outlines when employees should meet specific
targets or when management plans to evaluate them. This makes for a
more trusting and transparent evaluation system where employees feel
prepared and in control of their performance.
5. Monitor performance
The final step when integrating a sales control system into a business is to
use the guidelines and structure of the system to monitor employee
performance and contribute positively to the company's revenue. The goal
of sales control is, of course, to improve the financial success of an
organization and keep them on track to meet their sales and revenue goals.
Use the sales control system to motivate employees to work harder and
more efficiently by offering incentives, such as prizes, discounts, bonuses
or time off. Report to corporate frequently to keep them updated on the
system's progress.
Methods for controlling sales
Here are some of the primary methods managers use to control sales
within a company:
Assign individual sales quotas
One common method of sales control is to assign individual sales quotas
to all members of the sales department. This allows for managers to take
circumstances, such as experience and seniority, into account when
deciding on a sales target for each employee. For example, an entry-
level sales representative for a tech brand most likely won't have the same
number of sales in a week as a senior-level salesperson at the same
company. Management can adjust individual sales quotas over time,
allowing employees to improve and increase their work quantity.
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revenue goals for a specific period of time. Sales targets help salespeople
break down their sales goals and sales quotas into attainable parts.
Sales Quota Agreement
Once sales quotas are set and sales goals and targets are accounted for,
sales reps receive a sales quota agreement outlining each of these items.
The purpose of a sales quota agreement is to provide transparency about
what is required to meet quota and how that quota will be calculated
throughout the selling period. Sales quota agreements keep salespeople
accountable for hitting goals and keep managers accountable for
rewarding performance accurately.
Types of Sales Quotas
1. Activity Quota
2. Volume Quota
3. Profit Quota
4. Combination Quota
5. Forecast Quota
6. Revenue Sales Quota
There are many ways to measure quota. Smaller companies selling a single
product with a static price often set quotas around how many units (i.e., 28
pairs of skates) a salesperson must sell every month.
Larger companies selling multi-tiered products or services might have a
more nuanced quota structure where a salesperson is held to the overall
value of the deals they need to close (i.e., $4,500/month).
But quota structure doesn't end there. Here are the five most common types
of quotas and examples of each one.
1. Activity Quota
An activity quota requires salespeople — usually BDRs or SDRs — to
complete a set number of activities during a period of time, usually one
month or quarter. Activities usually include phone calls, follow-up emails,
scheduling meetings, and leading demos.
This type of quota is usually assigned to BDRs or SDRs who are part of a
larger selling team and aren’t responsible for closing actual business. An
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leads and how they interact with consumers. You may advise practices that
build trust and relationships with consumers to increase sales and the
effectiveness of the company sales process.
4. Study sales reports and data
Studying sales reports and data helps gain a better understanding of how
this data influences sales decisions. Determine how the sales team uses the
sales reports to make decisions and guide future sales content. The data
may show how the sales and marketing teams measure success and how
they use the data to repeat success.
If it appears the data isn't useful to the team, you may consider changing
the metrics to measure success and gather sales information.
Here are common metrics to use for sales reporting:
Number of sales
Customer acquisition
Return on investment
Average revenue per customer
Customer retention
Lead generation
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team. Try to remain objective in your reporting and provide a detailed list
of the sales data and discoveries you make during the audit.
Tips for conducting a sales audit
Consider these tips to help you in conducting a sales audit:
Ask for feedback. Asking the sales team for feedback on what
they think works well within the process and what might need
improvement can help you focus the audit and provide helpful
suggestions.
Set measurable goals. Before you begin your audit, set
measurable goals regarding the audit's impact. This can help you
monitor the progress of the audit and allow you to work toward
specific results.
Stay organized. Use tools, such as spreadsheets, to help you
organize the information you find during the audit. It's also helpful
to organize your resources so you can reference them later in the
process.
Consider competition sales processes. Identifying the sales
processes of competitors can help you compare the effectiveness
of the company's sales practices and set specific goals for the audit.
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The line sales organization is the oldest type used in smaller firms
and in firms where there is a small selling force. This limitation
restricts them to narrow product line in limited geographical area.
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