1. Sales Management Personal selling oftentimes is a key marketing variable. Personal selling oftentimes is a key marketing variable. Quality of the salesforce can determine the success of the company. Quality of the salesforce can determine the success of the company. Sales and distribution and advertising tactics should be complementary and synergistic. Sales and distribution and advertising tactics should be complementary and synergistic.

2. Cost of one salesperson Cost of one salesperson Varies from moderate to expensive. Varies from moderate to expensive. Salary, travel expenses, office expenses, sales support, benefits, etc. Salary, travel expenses, office expenses, sales support, benefits, etc. Total cost per salesperson = $250,000 or more. Total cost per salesperson = $250,000 or more.

3. Cost of making a sales call Cost of making a sales call Cost of one sales contact Cost of one sales contact based on 5 calls per day, 200 days per year based on 5 calls per day, 200 days per year total of 1000 sales calls per year total of 1000 sales calls per year = $250 per sales call = $250 per sales call but cost is actually much more in many situations!!! but cost is actually much more in many situations!!!

4. Plus management, training costs Plus management, training costs V.P. of sales, district managers V.P. of sales, district managers recruiting, hiring, and training recruiting, hiring, and training turnover = 20% or more turnover = 20% or more support staff and services support staff and services materials: catalogs, brochures, swatches materials: catalogs, brochures, swatches All in all, maintaining a salesforce is a capital and human resource intensive investment! All in all, maintaining a salesforce is a capital and human resource intensive investment!

5. # of Salespeople Needed: Objective and Task Method # of Salespeople Needed: Objective and Task Method Who is to be called on? Who is to be called on? How many of these customers are there? How many of these customers are there? How many times do you need to call on each customer? How many times do you need to call on each customer? How long is the typical sales call? How long is the typical sales call?

6. Example: How many salespeople are needed? Example: How many salespeople are needed? assume 5000 customers assume 5000 customers call on each customer once per month (12 times per year) call on each customer once per month (12 times per year) assume that each salesperson can make 5 calls per day assume that each salesperson can make 5 calls per day 200 “selling” days per year 200 “selling” days per year

7. Solution: Solution: 5000 x 12 = 60,000 total calls per year to be made 5000 x 12 = 60,000 total calls per year to be made each salesperson can make 1000 sales calls per year each salesperson can make 1000 sales calls per year 5 calls per day x 200 days per year5 calls per day x 200 days per year 60,000/1000 = 60 salespeople needed 60,000/1000 = 60 salespeople needed

8. Compensation Issues: Salary vs. Commission Compensation Issues: Salary vs. Commission Salary Salary Provides securityProvides security Compensates for non-selling tasksCompensates for non-selling tasks High level of control for sales managerHigh level of control for sales manager But, motivation? (or lack thereof)But, motivation? (or lack thereof)

9. Commission Commission The great motivator (the more you sell, the more you earn) The great motivator (the more you sell, the more you earn) Compensation linked to performance Compensation linked to performance Performance  Properly Rewarded  Motivation Performance  Properly Rewarded  Motivation But some tasks are non-selling (customer service, attending tradeshows, training new hires) But some tasks are non-selling (customer service, attending tradeshows, training new hires) If economy  then compensation also  If economy  then compensation also 

10. Satisfaction, Motivation, Performance, and Rewards Satisfaction, Motivation, Performance, and Rewards Does satisfaction  performance ??? Does satisfaction  performance ??? Or does performance  satisfaction?? Or does performance  satisfaction?? What role does rewards play? What role does rewards play?

11. Cherington, Reitz, & Scott study Cherington, Reitz, & Scott study Experiment: 2 sessions Experiment: 2 sessions Hi performers vis-à-vis low performers Hi performers vis-à-vis low performers Additional rewards: bonus after first session. Additional rewards: bonus after first session. Looked at performance after second session. Did the most satisfied workers perform best during second session? NO! Looked at performance after second session. Did the most satisfied workers perform best during second session? NO!

12. Satisfaction, Motivation, Performance, Rewards. Satisfaction, Motivation, Performance, Rewards. Performance  Properly Rewarded  Motivation and Satisfaction. Performance  Properly Rewarded  Motivation and Satisfaction. Ability & Motivation + Training & Sales Management  Performance. Ability & Motivation + Training & Sales Management  Performance.