3. Sales Force Management ELEMENTS
1. Integration
2. Resource Allocation
3. Rewards
4. Correct hiring & Training
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4. Sales Territories: Sales person’s
battleground
Territory
Sub title
Assignment
Level 2:
• Balance potential sales each
territory contains
Level 1:
• Minimize Travel expenses
• Minimize time associated with one
customer based in one specific geography
•
5. Under servicing & Over servicing
Customers
Sub title
Under servicing
Over servicing
•Sales lost due to lack of activity
•Lower sales directly & indirectly
•Fewer lead sort
•Direct result sales person
calling too much unless the
customer become alienated
•Fewer prospects identified
•Sales person stretched too thin
• Indirect Result loss from
sales in underserved category
6. Balanced & Unbalanced Territories
Unbalanced Territory
Balanced Territory
Unfair sales potential
Happier customer, sales person
& company
Distorted compensation
Potential
Main considerations are:
• Balancing work load
• Balancing Sales Potential
• Develop compact Territories
• Minimize disruptions during
redesign
Talented people leave company
7. Work load
Sales Potential Parameters
1.
2.
3.
No. of potential accounts exist in a territory
Served Market
Size of Population in territory
4.
5.
Size Finding
Time takes to travel a territory
8. Territory Changes
Minimizing customer disruption is a priority with any change
Sales people are very protective of territories and unwelcome changes
Possible Complaints are:
9. Setting Sales Goals
Profit and sales objectives
Support product plans, channel and market
plans
Motivate sales force for consistent efforts
SMART Strategy
Discuss with sales force how do they feel about
the goals set
11. Measuring Sales Result
Effectiveness measures are driven by:
1.) Length of selling cycle
2.) Complexity of buying process
3.) No. of People involved in decision making
Effectiveness of a sales person is the key measure
when analyzing performance
Important numbers to calculate effectiveness:
1.)Amount of each sale & contribution from sale
2.)No. of calls made
3.)Total accounts active
4.)Total Accounts in territory
14. Sales-Force compensation
The incentive plan needs to align the salesperson’s activities with
the firm’s objectives.
What form of compensation is appropriate for compensation task ,
to setting the metrics which performance will be based , to finding
the level of bonus , salary or commission the financial targets of
the firms .
Commission works based when sales effort can be linked directly
to a sales .
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15. Rules of Compensation
Rule #1:
Make the compensation plan easily understood so that the sales
person understands what behaviors are expected, what the sales
objectives are, and what outcomes lead to financial reward.
Rule #2:
Don’t play game , state the compensation plan and don’t change
it.
Rule #3:
Try to set metrics that are objective.
Rule #4:
Think about non financial incentives such as recognition program.
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16. Designing Compensation plan
When designing a compensation plan for sales force , there are
four key areas:
Level of pay:
Mix between salary and incentive:
Measure of performance:
Performance-payout relationship:
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17. Calculating Total compensation
There are many ways to motivate the sales person, For a
multi-bonus system the compensation for a sales person:
Compensation($) = Salary($) + Bonus 1 ($) + Bonus 2($)
In a compensation system , the following would represent
the compensation for a salesperson:
Compensation($) = Salary($) + [Sales ($) * Commission(%)]
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18. Calculating Total compensation
•Once the compensation plan for the sales force has been
created , the sales-force manager may want to reevaluate the
size of the sales-force. Based on forecast for sales in the
coming year , there may be room to hire more sales people or
need to cut back on the size of the force.
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19. Sales Force Funnel:
•A convenient way to forecast sales
in the short term and also keep an
eye on the sales-force activity is to
create a sales funnel.
•The concept of funnel comes from
simple principle: From large
number of possible customers ,
only a much smaller number will
actually make purchases.
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