Some questions answered in Chapter 17 Which areas of the company work with salespeople to satisfy customer needs? How do salespeople coordinate the efforts of various functional areas of the company? How do salespeople work with sales managers and sales executives? How do company policies, such as compensation plans, influence salespeople? How do salespeople work within the company to resolve ethical issues? What is the organizational structure, and how does it influence salesperson activities?

Sales representatives Who does a sales representative represent?

Role clarity The degree to which the salesperson’s perceptions of the sales role are correct.

Role conflict Occurs when two partners demand incompatible actions of the salesperson.

A role conflict example, part 1 Management wants to clear out the inventory of PD2s. They have cut the price 10% and added a 5% commission bonus for every PD2 sold. The technicians, who install and fix your company’s products, think the PD2 is a piece of junk. They told you not to sell it – customers will hate it plus it makes the technician’s lives miserable because they have to fix it all the time.

A role conflict example, part 2 A customer’s needs are such that you think the PD2 might work for them. The technician says to sell them the TW7, but you believe it costs too much for this customer. Your manager reminds you that you need one more sale this month to make your quota. What do you do?

Role ambiguity Occurs when the salesperson is not sure what actions are required.

Predicting the future What industry to you expect to work in when you graduate? What are your expectations about this industry’s future? What will happen if you are wrong?

Which compensation plan offers the least security? Straight salary Straight commission Drawing plan Combination plan

Examples of quotas Type of Quota: Revenue Margin Points Quota $1,000K Exhibit 17.3 Type of Quota: Revenue Margin Points Quota $1,000K 300K 100 pts. Actual Performance Salesperson 1 987K 296K 125 Salesperson 2 1,238K 285K 84 Salesperson 3 1,134K 304K 100 Points: (1) Margin/10K; (2) all others are 5 pts each Point Performance Margin Ads Displays New Accts. Total Salesperson 1 30 45 20 125 Salesperson 2 29 15 84 Salesperson 3 25 100

Alternative point method Exhibit 17.3 Type Quotas Salesperson 3 Performance % Quota Performance Margin point quota = 30 30 100% Ad quota (6 ads) 25 84% Display quota (4 displays) = 20 150% New account quota (4 new accounts) 15 75% Total 100 points 100

An example of a draw compensation plan Exhibit 17.3 ON: Jan. 1 Feb. 1 Mar. 1 Apr. 1 The rep is paid: in salary $ 500 in draw 1,500 -0- (500) (1,000) in commission 2,000 2,500 Total paycheck $2,000 Amount owed to the company $1,500 $1,000

Strategies for handling unethical requests from a manager, part 1 Your manager tells you to recommend the deluxe model of your product to a particular customer. The customer’s needs are such that the economy model is better suited. The customer trusts you and has not shopped the competition at all. The customer, being a school system, qualifies for a government discount but your manager told you to charge full price.

Strategies for handling unethical requests from a manager, part 2 Which strategy do you think is best to use? Leave the organization or ask for a transfer. Blow the whistle or threaten to blow the whistle. Appeal to a higher authority. Agree to the demand, but fail to carry it out. Ignore the request.

Promotion from sales to sales management List the skills you think would be most needed by a sales manager. Are these the skills of a superior salesperson?

Team-selling organization Exhibit 17.7 V.P., Sales Account Sales Manager Account Manager Account Manager Account Manager Computer Specialist Computer Specialist Test Equip. Specialist

Multi-level selling Buying company Selling company Exhibit 17.8 Buying company Selling company Vice President of Purchasing Vice President of Sales Director of Purchasing Account Manager Engineer Product Specialist

Any questions about the terminology? Field sales manager Field salespeople Field support rep Geographic salesperson Gross margin quota House account Inbound Incentive pay Inside salespeople Internal partnerships Key accounts Multilevel selling National account manager (NAM) Open-door policy Outbound Profit quota Quota Revenue quota Salary Sales quota Straight commission Straight salary Strategic account manager (SAM) Team selling Activity quota Bonus Bottom-up forecasting Cap Combination plan Commission Commission base Commission rate Customer service rep Draw Ethics review board