Managing the Industrial Sales Force

Sales force management is one of the important task for industrial  marketing managers where they take great care in selecting the right  personnel who can help them to increase their sales. They also give their  sales team proper product training, supervise their performance,  frequently motivate them by offering compensations, and at the same  time control the expenses incurred.

There are various steps that are involved in the industrial sales force  management.

1. Selection of Sales Personnel

Personal selling starts with selecting the salesperson who acts as the  representative of an organization. They help to create an image and  reputation of the company apart from increasing the sales by offering  various products and services to the industrial buyers. In addition to  giving the details on product features to their prospective buyers, they  offer other services like technical assistance, recommendations, ideas,  and sharing their experience. They also posses the skills that are  required to negotiate with professional buyers, handle huge sales  volumes, understand the customer’s needs and solve their technical  problems.

At times, the salespeople represent the buyers wherein after  understanding their needs, they pass on their requirements to Research  & Development department or the production personnel who are  suggested to manufacture the products as per customer’s needs.

Managing the Industrial Sales Force

All these call for careful and proper selection of sales person. The  selection process is based on the personal profiles of the candidates, the  sources available to get the right candidates and the use of various  selection aids.

Personal Profile: There are certain characteristic features that an ideal  candidate for the selection of industrial sales force should possess. Most  of the industrial organizations look for these common characteristics  because of the nature of their business and the kind of selling that is  involved. The prospective salesperson should be a self-starter, well disciplined,  good presenter, innovative, sound knowledge in product technicalities,  persistent, adaptable to situations, friendly and considerate, honest, well  qualified, etc. All these qualities give them a priority and preference to  get short listed for the next process of selection.

Sources of Candidates: To get good candidates with required qualities,  the industrial marketers depend on various sources. Some of the  sources include:

  • Publications — business newspapers, trade magazines etc.
  • Institutions — engineering/management colleges or campus placements.
  • References — existing sales force, customers, suppliers, other  departments/employees of the organization.
  • Placement agencies — head hunters, job portals,  recruitment consultants etc.

Sometimes, candidates imply walk-in if the company is a reputed one  just to try their luck or to just keep their database with the HR department  of the company.

Selection Aids: When a candidate has to be short listed, there are  various aids used by the industrial organizations that help them to select  the best personnel. Some of the aids they rely on are:

  • Candidate’s formal application i.e. resume/bio-data that  gives their qualification/experience and other details
  • Tests — that tests the candidate’s technical/sales  knowledge
  • References — that provide confidential  report/performance/aptitude report about the candidate.  This also helps to check the credentials of the candidate
  • Interview — where candidate’s personality is judged and an  appraisal created based on the impression created by him

2. Training

The main objective on any organization is to improve the sales, increase  the service levels and build the image of the company and its products.  Training plays a crucial role in this aspect for many of the industrial  organizations. It helps them to do effective sales by spending  considerable time and money training their salespersons frequently. It is  very essential in this competitive world that sales people must be  effective in discharging their duties by learning new ongoing techniques.

Any good sales training program content will have:

  • Product information — where sales people are given complete  details of the product line and their features so that they can easily  explain and address to customer’s queries.
  • Market information — where sales people are provided with  complete information of customers and competitors, their needs,  behaviors, strengths, weaknesses, strategies etc.
  • Company’s information — where sales people are informed about  the company’s history, objectives, organizational structure, key  persons, complete details of company’s performance during the  last few years and future plans.
  • Company’s promotional activities — where sales people are  updated on the various promotional activities a company is  carrying out like the promotional schemes, discounts and any  other offers.
  • Selling skills — that is very important for the sales people. They  learn to develop the selling skills, sales presentation, negotiating  skills and Customer Relationship Management.

Usually a sales trainee is trained generally by a Branch Manager or his supervisor. There are different methods of training that can be use like lectures, case discussions, group/individual presentations, role plays, business games, product demonstrations, personal counseling, on-the-job training, etc. The training process has to continue until the trainee becomes perfect in his job. It is said to be successful only when the actual sales achieved by the trainee after the training is more than what he has achieved before the training.

3. Supervision

Sales force is directed to perform the selling job in accordance with  marketing objectives and sales policies of the company. Supervision is  prime responsibility of the Branch Manager or the immediate supervisor  to whom the salesperson reports. They have the sole responsibility of  guiding the day-to-day activities of the sales people (task assignment),  boosting their morale, maintaining cordial and healthy working  atmosphere, allocating territory to each salesperson, evaluating the sales  and revenue in a particular location, etc. The other supervisory activities  of the sales supervisor includes:

  • Communicating and implementing company policies and  strategies
  • Counseling on problems and deficiencies of sales force.
  • Establishing standards of performance, both through formal  setting of goals or targets and setting an example for others  to follow.
  • Creating a favorable work environment and working  relationship with sales persons.
  • Continuous training and development of sales  representatives and
  • Clarifying the responsibilities or expectations clearly to the  sales people.

4. Motivation

Motivation is the process of arousing and sustaining goal directed  behavior induced by the expectation of satisfying individual needs.  Since most of the sales persons are in the field away from the supervisor and  colleagues, they experience fluctuations in their morale and motivation  because of negative responses from customers and frustrations. It is very  important for the sales force to have high morale as it helps them to achieve  sustained high levels of performance. This sometimes requires the  intervention of the sales supervisors who should express their confidence in  the sales person’s ability and continuously keep guiding and advising them.  Motivation also calls for maintaining simultaneous discipline when poor  performance of the salespersons is due to their negligence.

5. Compensation

Sales compensation is given to attract and motivate the  sales people to excel in their job. For a sales compensation to be effective, it  should give certain degree of financial security or stability to the salesperson  that should be related to what they do. It should be on par with market and  the salesperson should be able to understand it easily and clearly. As  industrial sales are uneven with huge orders at erratic intervals, the logical  and ideal method of compensation for sales force is generally by paying  straight salary. Since the job of sales people involves lot of missionary work  before closing any sales, they are paid commission and bonus apart from  their regular fixed salary. Other compensations offered to them consists of  various incentives that indirectly motivates them to increase their sales  figure.

Whenever a salesperson is compensated, it has four components  attached to it. The important one is the ‘fixed amount’ which is the basic  stable income he receives, followed by the ‘variable amount’ like the  commissions, incentives etc. The third component offered as perks or  ‘fringe benefits’ includes leave travel assistance, medical reimbursement,  personal or group insurance scheme, pension or superannuation  scheme, savings in income tax at higher salary levels etc. Their travel  and other expenses like boarding lodging, entertainment expenses that  are given as per the company policy come under the ‘reimbursements’ or  expense allowance. As these expenses are reimbursed based on their  actual expenditure incurred, this should not be strictly considered under  sales compensation.

A company offers different types of compensation plan to its employees  like:

  • Direct salary: It is a fixed amount paid to an employee every month  for his work. This is generally offered to such kind of employees who  are not in sales related jobs.
  • Direct commission: Commission is based on the value of sales  volume where certain percentage of sales value is given. This is  generally offered to the agents or brokers along with the sale people.
  • Bonus: They are based on sales volume or the profits of the  company. They are generally given either half-yearly or yearly.
  • Incentive: A monetary benefit paid by the company to the employees  who invest extra efforts to achieve additional sales
  • Combination of salary and Incentive
  • Combination of salary and perks
  • Combination of salary + Incentive + perks

Different companies adopt different combinations of remunerating their  employees. But the compensation for sales force commonly comprises  of salary along with perks and incentives.

6. Expense Control

There are certain expenses which the salespersons incur and the  company needs to compensate them in order to keep up their morale.  Though expense account is not part of the compensation system, it  affects a salesperson’s enthusiasm if they are not reimbursed with the  amount. A tight expense account makes the salesperson to bear some  expenses from their regular compensation while a liberal one will give  them an additional source of income. The various expenses covered by  an expense account include traveling, lodging boarding and customer  entertainment, etc, that are incidental to living away from home. There  are different methods of controlling an expense account of salesperson  like the automatic allowance, per diem allowance and reimbursement.

  1. Automatic allowance:  In this method, whatever expenses salespersons incur, they have to  spend out of their regular compensation that contains an increment to  cover such expenses. This method is beneficial to the company as  paperwork and maintenance of records is eliminated. But it also has a  disadvantage as the company will not know how much increment should  be added to the salary to cover the expenses. Even the salesperson will  not spend liberally as he has to spend money from his pocket that  indirectly affects the sales.
  2. Per Diem allowance:  When a salesperson is given some fixed amount per day or per mile of  traveling, such allowance is called as per diem allowance. This is to take  care of the missionary work done by the sales persons for the company.  This method has a disadvantage of difficulty in determining the amount  of money to be paid and the salesperson may also not spend the actual  amount.
  3. Reimbursement:  Whatever expenses a salesperson incurs during his sales process like  making telephone calls, traveling, hotel expenses, etc., are claimed by  him in the form of reimbursement. For claiming this, he has to maintain a  detailed expense account and submit it to his supervisor. This has an  advantage of salesperson spending more to close a sale. The  management also can audit the same and review the expenditure  incurred and control them.

The best way to expense control is to avoid the ‘expense cooking’ done  by the sales people where they claim more than what they actually incur.  Though it is less in industrial sales due to high income-levels, managers  need to have effective control over it. Some control measures include  imparting proper training, making them aware of the company policies,  counseling them on ethics and moral values etc.

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