Chapter 16 Managing Within Your Company

Learning Objectives 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?

Learning Objectives 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?

Internal Partnerships Relationships between a salesperson and another member of the same company Importance Salesperson must represent the customer to the company Ability to work with groups inside the company can directly affect the sales representative’s compensation

Internal Partnerships Role of sales Selling a company, its products, and its services to customers Selling customers’ needs to companies Selling internally Salespeople have to trust their coworkers to do their respective jobs properly

Principles of Selling Internally Accept responsibility Appeal to a higher objective Understand the personal and professional needs Address the internal customer needs Increase the internal customer’s sense of urgency Never personalize Negotiate

Company Areas Important to Salespeople Manufacturing Administration Shipping Customer service Marketing Sales

Manufacturing Concerned with producing product at the lowest possible cost Negotiations and compromises are necessary between manufacturing and customers Salespeople have to develop relationships with manufacturing Better new product designs come from collaborative relationships between salespeople and manufacturing

Administration Deals with order entry, billing, credit, and employee compensation Salespeople have to understand the needs of the credit department and assist in collecting payments Better positions the salesperson to help customers receive credit

Shipping Scheduling of product shipments may: Be part of sales administration Be part of manufacturing Stand alone Salespeople require the aid of the shipping department to complete their deliveries Scheduling of product shipments should be done in consultation with the shipping department

Customer Service Salespeople need to interact with customer service Close relationships and support of customer or technical service representatives mean: Better, faster, and more direct information flow to the salesperson Salespeople help customer service by: Setting reasonable expectations for product performance with customers Handling complaints promptly

Marketing Develops the promotions and products that salespeople sell Highly coordinated with sales Salespeople inform the marketing department of: Competitor actions Customer trends Important market information

Marketing Serves salespeople by using information to create promotional programs or designing new products Responsible for generating leads through: Trade show exhibiting Direct mail programs Advertising Public relations

Sales Management Sales executive Manager and at the top of the sales force hierarchy Plays a vital role in determining the company’s strategies with respect to: New products and markets Sales forecasts Prices Competition

Sales Management Size and organization of the sales force Forecasting Sales executive determines the number and type of salespeople needed to achieve the company’s sales and customer satisfaction goals Forecasting Bottom-up forecasting: Adding each salesperson’s own forecast into a forecast for total company sales

Sales Management Expense budgets Control and quota setting Used to control costs May be expressed in dollars or as a percentage of sales volume Control and quota setting Quota: Quantitative minimum level of acceptable performance for a specific period Useful for controlling the sales force

Sales Management Sales quota: Minimum number of sales in units Revenue quota: Minimum sales revenue necessary for acceptable performance Profit quotas/gross margin quotas: Minimum levels of acceptable profit or gross margin performance Activity quotas: Minimal expectations of activities for each salesperson Motivate the sales force to sell more profitable products or to sell to more profitable customers

Sales Management Compensation and evaluation Compensation system must Important in situations where the sales cycle is long and sales are few Compensation and evaluation Compensation system must Satisfy the needs of both the salespeople and the company Be uniform within the company and in line with what competitors’ salespeople receive

Sales Management Salary: Regular payment regardless of performance Incentive pay: Pay tied to some level of performance Commission: Incentive pay for an individual sale Bonus: Incentive pay for overall performance in one or more areas

Sales Management Straight salary method: Fixed amount of money for work during a specified time Straight salary plans are used when: Sales require long periods of negotiation A team of salespeople is involved and individual results cannot be measured Other aspects of the marketing mix are more important than the salesperson’s efforts in generating sales

Sales Management Straight commission: Pays a certain amount per sale and includes a base and a rate but not a salary Commission base: Item from which commission is determined Provides more financial incentive for the salesperson to work hard Commission rate: Determines the amount paid Expressed as a percentage of the base or as a dollar amount

Sales Management Draw: Money paid to a salesperson against future commissions Combination plans: Provide salary and commission Offer the greatest flexibility for motivating and controlling the activities of salespeople

Field Sales Managers Evaluating performance Training Must rate their salespeople’s customer service level, product knowledge, and other, less tangible qualities Training Trains new hires Provides refresher training for experienced salespeople

Managing Ethics in Sales Sales executive’s job is to: Determine corporate policy and its ethical nature Support positive behaviors and ensure that policies support the ethics of the organization Sales executives must encourage: Ethics review boards: Consist of experts to review ethics policies and act as a sounding board for employees Training courses in ethics Development of formal policies

Managing Ethics in Sales Open door policies: General management techniques that allow subordinates to bypass immediate managers and take concerns straight to upper management Field sales manager Acts as a role model by demonstrating ethical behavior in role plays During training or when conducting sales calls in the field Must avoid teaching high-pressure techniques and manipulative methods of selling

Exhibit 16.5 - Strategies for Handling Unethical Requests

Types of Salespeople Geographic salespeople Account salespeople Assigned a specific geographic territory in which to sell the company’s products and services Account salespeople Some develop new accounts while others maintain existing accounts Key accounts: Large customers who have a salesperson assigned only to that account

Types of Salespeople National account managers (NAMs)/Strategic account managers (SAMs): Company executives who coordinate all the salespeople who call on an account throughout the nation or the world House accounts: Handled by a sales or marketing executive in addition to that executive’s regular duties No commission is paid on any sales from that account They are key accounts, but not all key accounts are house accounts

Exhibit 16.6 - SAMs in the Sales Force

Types of Salespeople Product specialists Inside versus outside Specializing in types of products Inside versus outside Field salespeople: Sell at the customer’s location Inside salespeople: Sell at their own company’s location Account managers, field support reps, and customer service reps

Types of Salespeople Field support rep: Telemarketer who works with field salespeople and does more than prospect for leads Customer service rep: Inbound salespeople who handle customer concerns Inbound: Respond to telephone calls placed by customers Outbound: Telemarketer makes the phone call

Sales Teams Team selling: Group of salespeople supporting a single account Every team member brings a unique area of expertise or handles different responsibilities

Exhibit 16.7 - Team Selling Organization

Sales Teams Multilevel selling: Members, at various levels of the sales organization, calling on their counterparts in the buying organization Can take place without a formal multilevel sales team Another type of sales team is made up of the field rep and the field support rep

Exhibit 16.8 - Forming Sales Teams for Multilevel Selling