Sales Force Management

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Introduction to Sales Management in the Twenty-First Century

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Change Central to Sales Management Today

• Changing customer needs drive changes in salespeople
• Changing sales management agendas
• Change creates opportunities

Source: HR Chally Group (2007) The Chally World Class Excellence Research Report: The Route to the Summit. Dayton, OH: HR Chally Group.

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• Identify/discuss key trends affecting sales organizations managers today
• Present a general overview of the sales management process
• Identify/illustrate key external and internal environmental factors influencing the development of marketing strategies and sales programs

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Sales Management in the 21st Century

• Long-term relationships with customers
• Nimble and adaptable sales organizational structures
• Fewer functional barriers within the organization
• Coaching sales management style
• Leverage technology
• Incorporate all activities and outcomes in performance evaluations

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Key Themes

• Innovation – thinking outside the box
• Technology – broad spectrum of tools available to salespersons
• Leadership – capability to make things happen
• Globalization
• Ethics

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Innovation in Sales

• Transactional Selling – transactions involving separate organizations, each entering into an independent transaction.
• Relationship Selling – narrows the vendor pool, improves efficiencies, works directly with customers to solve problems.

trend

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1.1 What Smaller Prospects Want

• Opportunity to buy online
• Partners, not entertainers
• Simplicity
• Single point of contact
• Improved segmentation analysis

Sources: Jennifer Gilbert, “Small but Mighty,” Sales & Marketing Management, January 2004, pp. 30-35; "Moving Beyond Small, Medium, and Large", Selling Power Sales Management Newsletter, February 2007.

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Technology

• Accessibility via computers and mobile phones
• Interactive web presences
• Just-in-Time (JIT) delivery
• Electronic Data Interchange (EDI)
• Efficient Customer Response (ECR)
• Customer Relationship Management Software (CRM)
• Intranets

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Leading vs. Managing

Managing

Control

Supervisor/boss

Direct

Leading (Mentoring)

Communicate

Cheerleader/coach

Empower to make decisions

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1.2 Evolution of CRM

• CRM recognized as adding value
• Profits of vendors continue to increase as CRM evolves
• Better results, increased investment
• Mobility via smart phones

Sources: "How to Make Sales Professionals More Mobile", Selling Power CRM Newsletter, March 2009; "Why CRM is the Right Investment in a Bad Economy", Selling Power Newsletter, March 2009.

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A Global Endeavor

• Drivers
• Customers can easily communicate world-wide
• Significant growth opportunities lie outside domestic markets
• Customers are global
• Diversity of sales force creates challenges

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1.3 Servant Leadership

• Take subordinates’ work seriously
• Take lead from subordinates
• Build trust
• Allocate rewards and glory
• View self as steward

Source: Ideas derived from the web site of the Robert K. Greenleaf Center for Servant Leadership, www.greenleaf.org.

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1.4 Bridging the Culture Gap

• Understand and embrace ethnic customs
• Adapt selling approaches
• Portray genuine interest in cultural differences

Sources: Michael Soon Lee, "More Myths About Multicultural Customers", American Salesman, May 2008; "Seven German-American Cross-Cultural Business Differences", Selling Power, 2008

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Ethics

• Trust is necessary to maintain customer loyalty
• Long term relationships require higher ethical standards
• Federal Sentencing Guidelines designed to punish unethical firms

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Sales Management Process

• The formulation of a sales program
• The implementation of the sales program
• The evaluation and control of the sales program

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1.1

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Environmental Impact

• Environmental forces constrain pursuit of certain marketing strategies or activities
• Environmental variables determine ultimate success or failure of marketing strategies
• Changes in the environment create new marketing opportunities
• Environmental variables are affected by marketing activities

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1.2

Components of the external environment

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Economic Environment

• Buyer-seller interactions take place within the context of current economic conditions
• The economy impacts real potential demand
• Global economic conditions are important
• Competitive structure affects selling success

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Legal-Political Environment

• Increased number of laws regulate conduct of business
• Three broad categories of relevant laws:
• Antitrust
• Consumer Protection
• Equal Employment Opportunity

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1.3

Antitrust and Consumer Protection Laws

Green River Ordinances

FTC Requirements

Cooling-off Laws

Truth-in-Lending Act

Fair Packaging and Labeling Act

Antitrust Provisions

Consumer Protection Provisions

Robinson-Patman Act

Clayton and Sherman Acts

Reciprocal Dealing Arrangements

Federal Trade Commission Act

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Technological Environment

• Changes how salespeople/sales managers do their jobs
• Influences sales strategies
• Provides opportunities for product development
• Transportation, communications, and data processing technologies change:
• sales territories
• sales rep deployment
• sales performance evaluation

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1.5 Enterprise e-mail

• Applied Industrial Technologies developed enterprise email system organically
• Responded to salespersons’ requests
• Flexible, effective
• Provides efficient communication re: each customer contact

Source: HR Chally Group (2007) The Chally World Class Excellence Research Report: The Route to the Summit. Dayton, OH: HR Chally Group.

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Social and Cultural Environment

• Ethics - development of moral standards by which actions and situations can be judged
• Sales managers:
• Relationships with salespeople
• Interactions between salespeople and customers
• Managers must influence ethical performance by example
• Ethical standards reflect integrity of firm

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Valuing Integrity

• Organization’s interpretation of integrity needs to be explicit
• Integrity is basis of trust
• Product of leadership
• Must be earned
• Leader can’t function without it
• Integrity quotient
• Delineate promises
• Measure degree to which they are kept

Sources: Muel Kaptein, “An Integrity Injection for Business,” Business Week, December 29, 2006, www.businessweek.com; Karen Trisko, “Power of Integrity,” Executive Excellence, May 2001, p. 16.

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Natural Environment

• Nature influences demand for products
• Weather
• Natural disasters
• Availability of raw materials
• Energy resources
• Shortages may cause demarketing
• Social concern about possible negative environmental impact of product and production

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1.4

Components of the internal environment

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Goals/Objectives/Culture

• Mission and objectives drive customer management approaches

Well-defined mission

Successful corporate history

Top management values

Strong corporate culture

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Human Resources

• Sales organizations are highly complex and dynamic
• Often difficult to expand in response to growing markets
• Outside specialists can help meet need to expand

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Financial Resources

• Lack of financial resources can:
• constrain ability to develop new products
• limit promotional budget
• limit size of sales force
• Mergers are sometimes sought to obtain financial resources

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Production and Supply Chain Capability

• Production capacity
• Technology equipment
• Location of production facilities
• Transportation costs
• Ability to ensure seamless distribution and service after the sale

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Strong Service Capabilities

• Competitive advantage opportunity
• Difficult for other firms to compete for same customers
• Customers reluctant to switch regardless of price

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R&D and Technological Capabilities

• Excellent design and engineering provide promotional appeal
• Communicating technological sophistication as value-add helps prevents over-reliance on price for sales

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Mark W. Johnston | Greg W. Marshall