18 Management of Sales Force

Rajwant Kaur

    1. Learning Outcome:

After completing this module, the students will be able to:

• Understand the concept of sales force management
• Explain the functions of sales force management
• Describe the selection process of salesmen

    2. Introduction

The essence of marketing is creating, maintaining and developing demand. Thus, the role of effective selling and sales force cannot be undermined. The organisations grow due to the hard work of sales force which deals with the customers and tries to secure more and more demand for organisations’ products or services. Therefore, there is a need to manage the sales force effectively for the long term survival of organisations.

3. Meaning

In an organisation/firm, persons engaged in personal selling operations are called salesmen, salespeople or sales force. Personal selling requires face to face interaction between customer and salesman and involves use of various methods of selling such as door to door selling, selling across the table, selling at counter etc. In some organisations (especially dealing in industrial goods), majority of their sales force is engaged in field or door to door selling.

Sales force management relates to planning, organizing, directing and controlling of personal selling activities of an organisation which also includes recruiting, selecting, training, assigning, routing, scheduling, compensating, supervising and motivating as these tasks are applied to sales force.

4. Functions or Process of Sales force Management

Sales force is an invaluable asset of an organisation. Organisation’s sales and profits are dependent on the efficiency of salesmen. So, their efficient management is the major task of sales/ marketing management. Effective sales force management includes various functions which are explained as under:

4.1 Setting selling objectives:- First of all, various selling objectives are set for individual salesman within the framework of sales objectives i.e. objectives set for sales/marketing department as a whole. Apart from setting direct selling objectives like sales volume, expense and profitability for each salesman, other objectives are also set in relation to their selling and non-selling functions such as number of calls to be made per day/ week, order size, average cost per call, number of orders to be generated per day/ week, number of middlemen’s salespeople to be trained per day etc. These objectives will act as standards for evaluating performance of salesmen and pinpointing the weaknesses in their performance.

4.2 Determining size of sales force:- There is a need to determine the number of salesmen required to accomplish sales objectives. As the management of sales force involves cost, therefore, such size of sales force is determined which will help in increasing sales volume and profit on one hand, and reducing associated costs on the other hand. In determining optimum size of sales force, past experience, managerial judgement and the practice followed in industry play an important role. However, some models are available which can help marketing executives in deciding right size. These models are explained as follows:

a) Workload model: This model was propounded by W. J. Talley who believed that all salesmen should have equal workload. As per this model, management should first determine the total workload involved in covering the firm’s entire market. Then, it should divide this estimated total workload by the workload that an individual salesman is required to handle. This will determine the number of salesmen needed. The workload model involves following six steps:

(i) Divide and group the present and potential customers as per their annual sales volume. For example, if there are 800 present and potential customers, they can be classified by sales volume potential as under:

Class A   –   large         100 accounts

Class B   –   medium   200 accounts

Class C   –   small        500 accounts

(ii) Decide the length of time per sales call and desired call frequencies (number of calls) for each class of customers on the basis of sales personnel’s opinions, personal judgement or actual time studies. Continuing with above example, annual time required for each class will be calculated as follows:

Class A    :    60 minutes per call    ×    50 calls per year    =    50 hrs per year

Class B    :    30 minutes per call    ×    26 calls per year    =    13 hrs per year

Class C    :    15 minutes per call     ×    12 calls per year     =    3 hrs per year

(iii) Calculate total workload required to cover whole market

CLASS	ACCOUNTS×CALLS HRS PER YEAR=	WORKLOAD
Class A	100×50=	5000hrs
Class B	200×13=	2600hrs
Class C	500×3=	1500hrs
	TOTAL	9100hrs

(iv) Decide the total work time available per salesman. It may be decided by the management that each salesman will work 40hrs per week and 48weeks per year. Therefore, total work time available for each salesman will be

40hrs × 48weeks = 1920hrs per year

(v) Divide the total work time of salesman as per tasks, he is required to perform. For example, management may specify that salesperson should devote his time as follows:

Selling tasks	55%	1056hrs
Non-selling tasks	25%	480hrs
Travelling	20%	384hrs
	TOTAL =	1920hrs

(vi) Determine the number of salesmen required. This will be done by dividing the total work load as calculated in step (iii) by total selling time available for each salesman i.e.

9100 hrs ÷ 1056 hrs = 8.617 or 9 salesmen

This method is easy to understand and quite popular among sales/marketing executives. But this method has certain shortcomings such as (i) it does not consider profit element and (ii) it assumes that each salesman is equally efficient which is practically not possible.

b) Marginal Model: This is another model given by W. J. Semlow to determine the optimum size of sales force. As per this model, a firm can go on increasing the number of salesmen till additional gross margin on sales volume that each additional salesman is expected to produce is greater than the total cost of maintaining an additional salesman.

According to Semlow, this method is easy to apply as necessary information is available from accounting records. But, it is sometimes difficult to determine the incremental sales that additional salesperson could be expected to generate especially in case when increase in number of salespeople does not create a proportional increase in sales.

4.3 Job Analysis : The management has to carry out job analysis to develop job description and job specification. Job description provides details about the job i.e. its nature, content and duties of job-holder. The job description for selling job specifies (i) job duties (ii) extent of responsibility (iii)  job conditions (iv) relationship with superiors, supervisors and peers, (v) type of customer and sales contact involved.

Job specification explains the kind of person required for the job in terms of educational qualification, physical strengths and personal attributes. Apart from educational qualification, firms usually look for self-confidence, empathy i.e. ability to understand another person’s problems and wants and ego-drive i.e. desire to excel and convince the prospect.

Job description and job specification help in effective recruitment and selection.

4.4 Recruitment: Recruitment means searching for prospective employees (salesmen) and stimulating them to apply for job. Effective recruitment increases the number of applicants which enables management to make a better selection of salesmen. Recruitment and selection are usually the responsibilities of personnel department but many a times, marketing executives are called upon either to take a lead in this regard or assist personnel department in this task. Recruitment can be done from internal sources or from external sources. Present employees may recommend the name of certain persons known to them. Transfers can be initiated from one branch to another to adjust the requirement of salesmen.

Firms may contact employment exchanges, recruitment agencies, educational or training institutes. Reputed firms/organisations usually have unsolicited applicants i.e. the candidates who aspire to work in these firms. The management keeps record of all such applicants. They can be called upon if need arises.

4.5 Selection : Selection means appointing a suitable person as per the requirements of job. Selection is considered as negative process as it involves the appointment of promising candidate and refusing the unpromising one. The selection of right salesmen is very important as the improper selection will lead to poor sales volume, less profit generation, high salesmen turnover, inadequate compensation and dissatisfaction among salesmen.

The selection procedure followed by the firm involves certain steps which are:

(i) Receiving and scrutiny of applications: The applications of various candidates are received and scrutinized to segregate applications which do not fulfil the basic requirements like education or height etc.

(ii) Getting application blanks filled: These are the printed application forms which are to be filled in by candidates who are eligible and have submitted simple applications. These forms help in getting some standardized information about the candidate like personal history, educational qualification, salary expected, experience, reasons for leaving previous job, references etc.

(iii) Administering tests: The tests are applied to develop an in-depth understanding about personality traits and attributes of the candidates. Various psychological tests which are used for selection of salespeople include Achievement Tests, Intelligence Tests, Personality Tests and Interest Tests. Achievement Tests measure skill or training which the candidate possesses at the time of testing. Intelligence Tests measure the intelligence quotient of the applicants. The capability of a person in dealing with new problems can be understood through these tests. Personality Tests are designed to know candidate’s overall appearance, temperament, behaviour, initiative, confidence, belief in team work etc. Interest Tests attempt to find out the liking and disliking of the candidate so that job of his liking can be assigned if he is selected.

(iv) Interviewing: Interviewing involves personal interaction between selection committee or interviewer and candidate (interviewee) in formal or informal setting. Interview can be structured, semi-structured, unstructured or stress interview. Interview helps in cross checking the information supplied in application forms and gathering other necessary information about candidate. Interview is an important part of selection process. It is aimed at discovering ‘salesman’ in the interviewee which is otherwise not possible. Moreover the candidate gets a chance to know more about the firm and the job.

(v) Medical Examination: The candidate after passing through interview may require to go for medical examination and submit physical fitness certificate for ensuring his physical ability to carry out a hard and stressful selling job.

(vi) Selection: The candidates who have crossed all the hurdles, they are issued appointment letters which explain their position, remuneration and other terms and conditions of job. However, the contractual relations are established with the selected candidates when they submit joining letters.

4.6 Training : Training is a systematic process of enhancing skill and knowledge of people for a specific purpose. Good salespeople are not born rather they are made by imparting training through well organized training programmes. Newly selected salesmen should be imparted training before they take up their selling jobs. Trained salesmen can exercise self control. They are able to secure orders quickly. Thus, training helps in increasing sales, profits and efficiency of salesman. It improves customer relations and reduces salesmen turnover.

The sales force training programme focuses on imparting knowledge about product, market, company/firm, and various selling techniques. The trainees (salesmen) are made aware of product of the firm, its uses, strengths and weaknesses in comparison to products of rival firms. It enables salesmen to effectively demonstrate the product and handling queries of customers during actual selling of products. Salesmen are also provided knowledge about markets of their firm so as to have a better understanding of customers’ demographic profile and behaviour. The information about firm’s history, marketing policies, marketing strategies, order processes, personnel policies is also provided to salesmen during training. It helps in projecting a better image of the firm and boosting salesmen’s morale. It also enables salesmen to follow proper policies during their field work. The knowledge and instructions about selling techniques are provided to the trainees. These help them to meet challenges in an effective manner in the field of sales.

Training can be imparted to a group of salesmen through various methods such as lecture, discussion, role playing or sensitivity training. It can be imparted to salesmen at an individual level through on the job training method or programmed instruction method. The organizations usually use a combination of training methods rather than a single method to improve the effectiveness of training.

Through various training methods, salesmen are provided knowledge, skill and attitude training. Sales knowledge training (knowledge of product, company, market and selling techniques) is imparted through lectures, conferences, discussions, programmed instructions and plant visits. Under sales skill training, the salesmen are trained about how to approach the customer, identify sales prospects, make sales presentation, overcome objections, close sale and follow up procedure to be followed. Role playing, sensitivity training, programmed instruction and on the job training methods are used to impart skill training. This training helps in effectively using sales knowledge. Sales attitude training develops positive attitude of salesman towards his firm, product, colleagues and superiors. Conferences, self-development courses and discussions are used to impart sales attitude training.

It is to be remembered that training is a continuous process. New products, high competition, complex technology and changing buying habits necessitate the training of salespeople at regular intervals to keep them efficient and motivated.

Training can provide the desired results only if effectiveness of training is evaluated at two stages i.e. at first stage, by collecting and analysing the opinions of trainees about overall training programme, trainer, training methods etc. and at the second stage, by checking the actual performance of salesmen. This evaluation will help in improving future training programmes.

4.7 Assignment of Job : The trained salesmen are assigned jobs of selling products in certain market segments. These market segments are termed as sales territories. A sales territory denotes group of customers, called accounts, in a geographical area. The salesmen are allocated sales territories so as to enable management to effectively evaluate each salesman’s performance. It also improves customer service, market coverage, sales profitability and helps in reducing selling expenses.

The sales territories are allocated on the basis of ability of salesman, sales efforts required and the sales potential of these territories. The management should try to assign that territory to each salesman wherein his relative contribution to profit is the highest.

Apart from allocating sales territories, sales quota is assigned to each salesman. Sales quotas are quantitative objectives, in terms of rupees or units of products, to be achieved by salespeople. Quotas motivate salesmen to achieve certain performance level and act as standards against which their performance is measured. Sales quotas fixed for salesmen should be fair, accurate and realistic. Salesmen should be able to understand these quotas and methods to achieve them. The participation of salespeople in quota-setting will ensure the achievement of these sales quotas.

It is worth mentioning here that salesmen are sometimes given some liberty to change discounts or allowances to be granted to buyers to secure more sales. But they are usually not authorized to alter the price given in catalogue.

The routing and scheduling plans are made for the salesmen to improve coverage of territories and reduce wastage of time and efforts. The route plan provides information about location and number of customers, route maps, means of transport available etc. whereas schedule plan tells about customers to be contacted or called upon daily, the time at which each call is to be made and other necessary details about daily sales calls.

4.8 Determining Compensation : Management has to formulate compensation plan for salesmen. Salesmen’s compensation plan may have various components such as salary, commission, bonus, reimbursable expenses and fringe benefits (medical benefits, use of car, life insurance, paid vacations etc.).

The compensation plan should ensure stable and good earnings as well as adequate incentives for increase in sales volume or profitability. It should be simple, fair, economical, flexible and competitive. A good compensation plan reduces sales force turnover, boosts morale of salesmen and improves firm’s image.

The various methods of compensation followed by different organisations are: (i) salary method, (ii) commission method (iii) salary plus commission method (iv) salary plus bonus method.

In addition to the above any method of compensation followed, the salesmen are compensated for their out-of pocket expenses. They are sometimes given some share of profit for showing extra ordinary performance.

4.9 Motivation of Sales force : Motivation means stimulus to get a desired action. Sales force has unlimited potential which can be tapped through various measures of motivation. Salesmen are required to be motivated for achieving selling objectives. Motivation can be provided through financial and non-financial incentives. Adequate compensation acts as a financial incentive and provides a stimulus to salespeople to work harder. But money cannot fulfil all needs of salesmen, so they are provided non-financial incentives also such as recognition, praise, good working conditions, participation in goal-setting, promotion, autonomy, opportunity for advancement etc. Sales contests are also employed which offer financial and non-financial incentives to salesmen on achieving certain goals. However, it should be taken care of that sales contests should not lead to high pressure selling.

Management should develop a sound motivational system to fulfil physiological, safety, social and ego needs of salesmen. The system should be competitive and flexible.

4.10 Co-ordination: Co-ordination is the synchronization of various activities. Management/marketing executives have to co-ordinate the efforts of different salesmen. They have to integrate the operations of sales force with those of physical distribution activities, advertising and sales promotion activities to achieve sales/marketing objectives. Effective communication helps in achieving co-ordination. Co-ordination reduces conflicts between salesmen and dealers, salesmen inter se and salesmen and sales team at headquarters.

4.11 Control : Control means evaluating the performance and applying corrective measures, if necessary. The management controls the activities of sales force. It evaluates the performance of salespeople periodically and continuously to determine the achievement of targeted performance levels, compliance of policies, rewards, penalties and need for training. Appraisal of performance helps in identifying the area where corrective action is required and enables management to apply adequate corrective measures so as to improve future performance.

The process of sales force control includes (i) establishment of standards of performance, (ii) measurement of actual performance , (iii) comparison of actual performance with the standards, (iv)  providing rewards for better performance and (v) taking corrective action if performance is not up to mark.

Qualitative and quantitative standards for salesmen’s performance are set in the form of sales quotas, expense control, routing and scheduling plans, personal development objectives and selling objectives like gross profits, sales profitability etc.

Organisation’s records in accounts and sales department, salesmen’s reports, supervision, customer feedback reports are the important sources of information which help in knowing about salesmen’s performance levels.

Performance of salesmen against qualitative standards is measured and evaluated through opinion reports of sales executives, customer opinion and merit rating (use of multi-point scale to rate various qualitative factors or traits).

Quantitative performance of sales force is evaluated through scale records and reports, ratio analysis, profit and loss statement analysis and comparison of salesmen’s performance with sales quotas.

The effective control of sales force helps in (i) improving selling methods, (ii) determining salesperson’s worth (iii) improving sales performance and quality of supervision (iv) knowing the effectiveness of compensation plans and motivation system and (v) knowing the problems of sales force.

A sound control system of an organisation must ensure fair evaluation, quick reporting of performance and deviations, timely corrective action and human touch in dealing with salesperson showing poor performance.

5. Summary

In an organisation/firm, persons engaged in personal selling operations are called salesmen, salespeople or sales force. Sales force management relates to planning, organizing, directing and controlling of personal selling activities of an organisation which also includes recruiting, selecting, training, assigning, routing, scheduling, compensating, supervising and motivating as these tasks are applied to sales force. Organisation’s sales and profits are dependent on the efficiency of salesmen. So, their efficient management is the major task of sales/ marketing management. Effective sales force management includes various functions such as (i) Setting selling objectives (ii) Determining size of sales force (iii) Job Analysis (iv) Recruitment (v) Selection (vi) Training (vii) Assignment of jobs (viii) Determining Compensation (ix) Motivation of Sales force (x) Co-ordination and (xi) Control. First of all, various selling objectives are set for individual salesman within the framework of sales objectives which are set for sales/ marketing department as a whole. The management has to carry out job analysis to develop job description and job specification. Job description provides details about the selling job i.e. its nature, content and duties of job-holder (salesman). Job specification explains the kind of person required for the selling job in terms of educational qualification, physical strengths and personal attributes. Recruitment means searching for prospective employees (salesmen) and stimulating them to apply for job. Recruitment can be done from internal or external sources. Selection means appointing a suitable salesperson as per the requirements of job. It involves tests and interview. Training is a systematic process of enhancing skill and knowledge of people for a specific purpose. Good salespeople are not born rather they are made by training through well organized training programmes. The trained salesmen are assigned jobs of selling products in certain market segments. These market segments are termed as sales territories. Apart from allocating sales territories, sales quota is assigned to each salesman. Management has to formulate compensation plan for salesmen which has various components such as salary, commission, bonus, reimbursable expenses and fringe benefits. Salesmen are motivated for achieving selling objectives through financial and non-financial incentives. Co-ordination is the synchronization of various activities. Management/marketing executives have to co-ordinate the efforts of different salesmen. Control means evaluating the performance and applying corrective measures, if necessary. The management controls the activities of sales force. The effective control of sales force helps in improving selling methods, determining salesperson’s worth, improving sales performance, knowing the effectiveness of compensation plans and knowing the problems of sales force.

Learn more

Few important sources to learn more about management of sales force:

1. Blois Keith (2000). The Oxford Textbook of Marketing, Oxford University Press Inc., New York
2. Bose,S. Biplab (2010) Marketing Management, Himalaya Publishing House, Mumbai.
3. Cannon, Tom. Basic Marketing: Principles and Practice, 3rd Edition, A.I.T.B.S. Publishers, Delhi.
4. Davar S. Rustom, Davar R.Sohrab, Davar R.Nusli (2000). Salesmanship and Publicity, Vikas Publishing House Pvt. Ltd., New Delhi.
5. Gandhi,C J (1998). Marketing- A Managerial Introduction, Tata McGraw Hill, New Delhi
6. Havaldar and Cavale (2011). Sales and Distribution Management: Text and Cases, 2nd Edition, Tata McGraw Hill Education Private Limited, New Delhi.
7. Kotler, Philip (2002). Framework for Marketing Management, Pearson Education (Singapore) Pte.Ltd., Indian Branch, Delhi.
8. Sherlekar,A.S.(1996). Marketing Management, Himalaya Publishing House, Mumbai.
9. Venugopal, Pingali (2011). Sales and Distribution Management: An Indian Perspective, SAGE Publication India Pvt. Ltd.

• http://www.enotes.com/research-starters/sales-force-management
• http://www.slideshare.net/mochkurniawan/chapter01-managing-the-sales-force-2495456
• http://www.managementstudyguide.com/managing-sales-force.htm
• http://bear.warrington.ufl.edu/weitz/papers/Hiring.pdf

   Points to Ponder

1. In an organisation, persons engaged in personal selling operations are called salesmen or sales force.
2. Sales force management relates to planning, organizing, directing and controlling of personal selling activities of an organisation.
3. Sales force management also includes recruiting, selecting, training, assigning, compensating, and motivating as these tasks are applied to sales force.
4. The effective control of sales force helps in determining salesperson’s worth, improving sales performance and knowing the problems of sales force.