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.
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
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.
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.
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.
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.
- 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.
- 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.
- 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.