Motivating Your Sales Force
Motivation of Sales Person
• It is the process of Stimulating people to perform in order to accomplish desired goals
(William G. Scott)
• It is a force that directs our Behaviour
Importance of Motivation
• Improve Performance
• Reduces Tension
• Make Sales force happy
Motivation Effort Performance
Satisfaction Reward
Factors Motivating Sales Person
• Work Culture
• Adequate & fair earnings
• Appreciation, Recognition & respect
• Spirit of Competition
• Opportunity for growth
• Killer’s Instinct
• Future Security
Sales Manager’s tool for Motivation
• Remuneration Plan
• Promotion
• Personal Contact & Counseling
• Correspondence
• Training
• Participation
• Positive Feedback
• Job Clarity
• Sales Contest
• Publications- Bulletins, Magazines, Journals etc
• Honours & Awards
Compensating the Sales Force
• It refers to the monetary & Non-Monetary expenses incurred by the sales organization,
for paying the services rendered by the sales force.
• It is, thus, the total [payment including monetary (Salary & Wages) & Non-Monetary
(Welfare Expense)
Importance of Compensation
• Maintain good relation b/w employer & employee
• Attract efficient & desirable Sales People
• Keep sales force satisfied
• Retain Sales Force
Compensation Method
Straight
salary or
wage
Salary plus Straight
commission commission
Quota-bonus Commission
plan with draw
Characteristics of Sound Compensation
• Simplicity
• Fairness
• Incentives
• Flexibility
• Control
• Guaranteed Income
• Economical to administer
• Help to attain objective
• Competitiveness
Sales Forecasting
• Estimated in monetary terms (sales), or physical units.
• Specified future period under a proposed marketing plan.
• Done for
Specified item
Entire Product line
A market
A specified geographical area.
Sales Forecasting Objective
Short Term Long Term
Formulation of suitable production policy Estimating cash inflows
Provision of raw materials Determining dividend policy
Appropriate pricing policy Man-power planning
Regular availability of labour Planning of plant capacity
Forecasting of short term financial requirements Budgetary control over expenses
Setting of sales target Forecasting of long term financial requirement
Techniques of Sales Forecasting
Qualitative Methods Quantitative Methods
Executive Opinion
Trend Projection
Sales Force Composite Method
Time Series Analysis
Expert Opinion/Delphi Method
Regression Analysis
Survey of Buyer’s Interaction
Sales Budget
It is a detailed statement of estimates of sales volume in terms of quantities & revenue & also the
estimated sales expense during a given period.
Procedure
• Situation Analysis
• Identification of problem & opportunity
• Development of sales forecast
• Formulation of Sales Objectives
• Determination of sales tasks
• Specification of resource requirement
• Finalization of projection
• Presentation & review
• Revision of sales Budget
• Approval of Budget
Parts of Sales Budget
• Selling Budget • Servicing
Compensation Distributor & Customer traveling
Travel n Entertainment Technical Counseling
Prospect Seminar
Discount & Allowances • Support
Recruitment & Selection
• Advertising & Promotion Budget T&D
Media Sales Meetings
Catalogues Customer Services
Fairs n Exhibition Warehousing
Samples, Models, Displays
Selling aids • Fulfillment
Contest & Deals Packing & Shipping
Billing
• Administration Credit
Office Expense Warranty
Telephone & Postage Returns
Sales Budget (Sample)
• Natural or traditional expenses are to be converted to functional expenses, for doing marketing cost analysis.
Functional Expenses
Natural /
Traditional Total Adv. and Sales Warehousing &
Expenses Personal Selling Administration
Promotion Inventory
Salaries 20,00,000 10,00,000 4,00,000 2,00,000 4,00,000
Rent 10,00,000 2,50,000 1,00,000 5,00,000 1,50,000
__
Travel 5,00,000 5,00,000 __ __
Adv. and Sales __ __ __
15,00,000 15,00,000
Promotion
Total 50,00,000 17,50,000 20,00,000 7,00,000 5,50,000
Sales Quota
• Quantitative objectives assigned to specific sales organization unit or marketing unit.
• Marketing unit – A salesperson or a sales territory, such as Sales Distributor/Retailer or
Sales region.
• Provides standards for evaluating the performance of marketing units either in physical
terms or in rupee terms.
Objective behind Sales Quota
• To provide quantitative performance standards
• To obtain tighter sales & expense control
• To motivate desired performance
• Sales Contests
Others:
To obtain more effective budgetary control.
To ensure systematic individual sales achievement to cope with the sales forecast
To maximize sales in physical & in monetary terms
Advantage of Sales Quota
• Evaluation of Sales performance
• Source of motivation
• Maximization of Sales & Profit
Disadvantage of Sales Quota
• Low Quota Fixation
• Less Personnel contact with customers if target is achieved
• Wastages of Resources
• Not based on statistical methods, hence may be vague.
Sales Territory
A Sales Territory is grouping of customers & prospects
assigned to an individual Salesperson
Why Sales Territory
• Providing proper market coverage
• Controlling selling expense
• Evaluating Sales Personnel
• Contributing to sales force morale
• Meeting the competition more effectively
Basis for establishing Sales Territory
Geographic
Geographic divisions
divisions
Customer
Customer types
types
Product
Product lines
lines
Geographical Division
Vice-President
Marketing
Regional Sales Regional Sales
Manager Manager
District Sales District Sales District Sales District Sales
Manager Manager Manager Manager
Sales Rep Sales Rep Sales Rep Sales Rep
Delhi North Delhi South Delhi East Delhi West
Customer Type
Vice-President
Sales
New Accounts Existing Accounts
Manager Manager
New Account New Account Existing Existing
#1 #2 Account #1 Account #2
Product Line
Vice-President
Sales
Snack Foods Beverages Toiletries Cosmetics
Sales Manager Sales Manager Sales Manager Sales Manager
DETERMINE BASIC TERRITORIES
The breakdown approach uses factors such as sales, population, or number of customers.
Forecasted Sales
Sales Force Size = Average Sales per Salesperson
SIX STEPS TO CONSIDER WHEN
DETERMINING A FIRM’S BASIC
TERRITORIES
1. Forecast sales and determine sales 4.Tentatively establish territories.
potentials.
2. Determine the sales volume needed 5. Determine the number of accounts
for each territory. for each territory.
3. Determine the number of territories. 6. Finalize the territories, and draw the
boundary lines.
Sales Report
A record of calls made and products sold during a particular time frame kept
by a salesperson or their management. For example, a typical sales report
might incorporate data on:
• Sales volume observed per item or group of items in a day/month.
• How many new and current accounts were contacted and when they are
being finalized
Sales Report (Sample)
Daily Sales Report.xls
Performance Evaluation
It is done to assess the weakness & strength of the sales personnel & also the
company’s policies, objectives & methods employed by the top management
Management Cycle or steps of evaluation
n
• Establishing performance Standards
• Recording actual performance
• Evaluating actual against standards
• Taking appropriate action
Measures to Assess Sales Performance
Sales Revenue Gross Profit
Penetration of
Sales Call
Accounts in
Frequency
Sales Territory
Selling and Sales
Administration
Expenses
Employee performance review form.doc
Reason For Appraisal
• To bring about improvement in selling methods
• To determine salesman’s worth
• To operate effective compensation plans
• To improve sales performance
• To improve the quality of supervision
• To sweeten the relations at higher level
Thank
You
