CaseStudy - Sales
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UnitIIIStudyGuide.pdf
Background.docx
- UnitIIIAssignment.pdf
UnitIIIStudyGuide.pdf
BUS 3302, Sales Management 1
Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:
2. Describe methods to recruit, select, hire, and develop salespeople. 2.1 Explain approaches for locating prospective candidates. 2.2 Identify tools used to select candidates with the right profile. 2.3 Detail legal and ethical considerations in recruitment.
Required Unit Resources Chapter 5: Acquiring Sales Talent: Recruitment and Selection Unit Lesson Previously in the course, we examined the strategic role of the salesforce in the marketing mix. We saw that personal selling is just one of many tools used by marketing managers to communicate with individual and business customers. In this unit, we examine one of the first and most challenging decisions a sales manager has to make. How does a firm recruit and then select the right people to comprise its sales staff? Of course, all areas of business face recruiting and selection issues, but there are some elements of a sales position that enhance the challenge. Salespeople often make the first impression for their firm. They may work independently, thus determining how they use their time. Today, they are considered advisors or consultants to their customers with a goal of developing lasting relationships. They usually have the responsibility of prospecting for new customers as well as maintaining relationships with existing customers. The compensation of salespeople usually includes some commission, or it is totally commission-based. Sales involves travel from client to client and may involve overnight travel. In many fields, salespeople regularly attend trade shows. There may be limited promotion opportunities because there is generally one sales manager for 10-12 salespeople. Firms differ on how they approach hiring. Some firms prefer to hire new entrants to the field. They maintain good relationships with colleges and universities. Their idea is to talk with new graduates who have studied sales and to develop these new entrants to fit into their sales approach. They think this is more productive than hiring experienced salespeople who have developed habits that may be hard to change. This approach requires a robust training program to prepare the new employee to sell the firm’s way. This takes time, which means the new salesperson will not be fully productive for a while. If the firm hires an experienced salesperson, that person may have some different ways of doing the job but is usually ready to be productive much sooner. Another approach popular with some firms today is to bring people with technical skills into the salesforce. If a company is selling technical products, some firms will hire engineers and develop their selling skills. This provides salespeople who can speak the technical language of the client. When making major purchases (e.g., large machinery, advanced technical products, or corporate jets), some firms create a buying center with several specialists supporting the purchasing agent. In these situations, the firm making the sale may create a selling center and bring together specialists (e.g., account managers,
UNIT III STUDY GUIDE Staffing a Salesforce
BUS 3302, Sales Management 2
UNIT x STUDY GUIDE Title
financial and legal specialists, engineers, product designers) who can interact with their counterparts at the buying center. Companies use job descriptions when seeking candidates for vacant sales positions. This is the way to list job qualifications and candidate characteristics. Because of the nature of the sales position, these characteristics include factors that are hard to measure, such as the ability to overcome objections, persistence, and closing skills. Interviews are the tool of choice for many sales managers selecting new salespeople. It is not unusual for candidates for sales positions to participate in six or more interviews; some are individual interviews, and others are structured interviews with panels. Because salespeople develop long-term relationships with clients, it is important to hire salespeople who demonstrate honesty and integrity. Some of the interviews focus on past and current behaviors. One of the challenges in selecting salespeople is to determine how subjective the process should be and how to use objective criteria. Some sales managers believe the position is essentially subjective, so the selection process should be largely subjective. Others rely on more objective measures, such as testing and performance. A common approach is to identify top-performing salespersons within the firm. The company asks those people to take the tests it plans to use, and their test results are considered a benchmark. Candidates who score high in the same areas as the top performers show potential as top performers. While this has worked in some instances, there are so many factors that come into play with sales success that this is not always successful. There are basic legal and ethical guidelines that can come into play with all recruiting and hiring. However, because of the nature of the sales function, there are additional sensitivities. There are more than a dozen legislative acts that affect recruitment and selection and even more regulations that indicate how the legislative acts should be interpreted and enforced. Gift giving has been a practice in sales for some time. Since the goal was to build a relationship, many salespeople would routinely invite customers to lunch or dinner, to attend sporting or arts events, or to play a round of golf. Some of these invitations carried a pretty substantial price tag, such as being a guest at a professional sporting event or spending a week at a golf resort. The ultimate gift, of course, was an event like the Super Bowl. Over time, there was growing concern that the gifts had an illegal influence on purchases, and new regulations were put in place. Sales organizations developed and adopted a code of conduct to provide ethical guidelines for their staff. While some firms put strict limits on gifts and invitations, other firms banned them altogether. This whole issue has become more complex as firms have expanded globally. For example, there are some developing countries where it is the accepted business practice to pay a commission to a firm to enter into a contract. That practice is banned in the United States by most companies because it can be considered as a bribe. It creates a challenge for the salesperson though. If the salesperson follows the company’s code of conduct and does not pay the “commission,” then the company will lose the sale. On the other hand, paying the commission violates written ethical standards. American companies have struggled with how to respond to this ethical dilemma. A different example is found in some Asian countries. In Japan, for example, if a salesperson from the United States goes to dinner with a client, they should not talk business. The intent of these events is to build a relationship. Japanese businesspeople will not enter into a business relationship without first establishing a relationship. Talking business at the first few social events is considered too direct. In the United States, if a salesperson takes a client to lunch or dinner, the common practice is to complete a reimbursement request that includes the business matters that were discussed. These examples illustrate an increasing challenge to sales managers as the business environment becomes more and more global. Companies from other countries are establishing branches in the United States, and
BUS 3302, Sales Management 3
UNIT x STUDY GUIDE Title
U.S. companies are expanding rapidly into other parts of the world. This trend means that a salesperson in the United States may have several customers from other countries in their territory. A salesperson can enhance a relationship with these branches by learning about how they do business and by being sensitive to their culture and practices. It also means that a sales manager may be given a developmental opportunity by being sent to another country to lead the sales operation there. This is a substantial challenge since different cultural and business conditions will affect the personal selling process. One of the ways to prepare for increasing globalization is to use recruitment and hiring to increase the diversity of the sales staff. That will prepare for an increasingly multicultural business climate in the United States. Suggested Unit Resources In order to access the following resources, click the links below. The following PowerPoint presentation corresponds to the material in your textbook: Chapter 5 Presentation PDF version of the Chapter 5 Presentation
- Course Learning Outcomes for Unit III
- Required Unit Resources
- Unit Lesson
- Suggested Unit Resources
Background.docx
Background
Frank Slade, sales manager for StopFast, a regional manufacturer of automotive brakes based out of Des Moines, Iowa, has been experiencing a difficult time filling an open sales rep position that was vacated by a rep who quickly left the company due to his spouse’s job transfer. As the weeks and months passed, Frank began to feel significant pressure and was becoming anxious about filling this position. Reps in his district were complaining that helping to service customers in the open territory was taking a toll on relationships with their existing customers. Consequently, Frank was concerned with the level of service current customers in the vacated territory were receiving. Moreover, no prospecting had been conducted in the territory since it was vacated, making it difficult to increase sales volume. To compound matters, Frank has been helping to cover the vacated territory and it was starting to detrimentally affect his ability to properly manage his salesforce. Frank realized that the longer the position was left vacant, the greater the chances for damaged customer relationships and the larger the lost sales opportunity. Frank’s boss, Sal Lavon, was a tolerant individual, but his patience was wearing thin. Frank knew that if he did not fill the position soon, not only would his personal income be hurt, but he risked receiving a poor performance appraisal. Given that his last appraisal was less than stellar he wanted to avoid this at all costs.
Frank has been undertaking an extensive search to fill the vacant position. He placed a classified ad in the local newspaper, the Des Moines Register. Additionally, he contacted the career placement offices of local colleges and universities to see whether they had any leads on potential candidates. This attracted a limited pool of candidates, several of whom were interviewed for the position. However, Frank was having a difficult time finding a proper fit. Some candidates were simply unqualified for the position. The qualified candidates seemed to lose interest upon learning more about what the position entailed.
The vacant position is demanding. It requires extensive overnight travel and some weekend travel. The job is also physically demanding, requiring lifting heavy product, assembling displays and spending grueling hours on the road driving from account to account. The salary is primarily commission-based, with the average salesperson earning about $45,000 his or her first year. Within five years, the average salesperson with the company makes about $90,000 a year. However, the earnings potential is great for star performers, with some earning $180,000 annually. Although there was money to be made as a salesperson, the company’s size limited the opportunities for promotion. The company offers little formal training. Salespeople are provided a training manual and most of the training occurs on the job.
Salespeople at StopFast are required to be very customer-oriented. In addition, they need good prospecting skills since the company is constantly trying to acquire new customers given its relatively high customer turnover rate. Furthermore, the person who fills this position must have outstanding planning and organizing skills, leadership skills, be persuasive, show initiative, and possess strong communication skills, including the ability to write, speak and listen.
Current Situation
Frank believes that his inability to fill the vacant position stems from not making the position look attractive enough to potential candidates. Thus, to increase the attractiveness of the position, he decided to rewrite his newspaper ad, neglecting to mention some of the responsibilities of the job. In particular, he downplayed the travel associated with the position and emphasized the high earnings potential. In doing so, he noticed an increase in job applications. Frank reasoned that if he could make the job sound attractive enough he could persuade someone to take it, who surely later would find it a rewarding opportunity.
What follows are some excerpts from a recent interview with Vince Pram, a candidate attracted by the new round of advertising. Vince recently graduated with a degree in marketing from a well-respected university in the area. Although he has limited sales experience, he otherwise appears to be qualified for the position.
Frank: Vince, you’ll be responsible for selling various lines of brakes to retailers throughout the Midwest. You’ll service existing accounts in your territory as well as prospect for new accounts. We participate in four trade shows a year, which should provide you with good opportunities to prospect.
Vince: Does the position entail overnight stay? Frank: Yes, there’s some overnight travel involved, depending upon where your customers are located. However, we pay for all your travel expenses, including your lodging and meals. I haven’t heard many complaints from our sales-force regarding travel requirements.
Vince: Do you have a training program?
Frank: We have a fine training program. Our current salespeople have been through our training program and each one is performing quite well right now. Our training manual is particularly helpful for learning new product knowledge. Once you get into the field, you will find the product practically sells itself.
Vince: Are there ample opportunities for promotion?
Frank: We try to promote from within as much as possible. There is no reason why a hardworking ambitious person should not be able to get promoted in this company. In fact, I began my career as a delivery person for StopFast, was promoted to sales, and from there moved into sales management.
Vince: I understand the job pays a salary plus commission.
Frank: That’s correct. Our starting base salary is $25,000. However, with commission, you could earn as much as $180,000! With little effort you should have no problem making about $50,000–$60,000 your first year.
After interviewing two candidates for the position resulting from his new approach, Frank decided he would forgo any more interviews and make a job offer to Vince, given his apparent interest, and Frank’s strong desire to quickly fill the position. Vince was very excited about the offer Frank extended to him. Two days ago he interviewed for a sales position at another company that also extended him an offer. Although this company was reputable, and the offer sounded like a solid opportunity, it did not sound as appealing as the opportunity at StopFast. He is leaning toward accepting the offer from StopFast, but he wants to talk it over with his wife. He likes the fact that there is not much overnight travel. He and his wife recently had a baby son and Vince does not want to be away from his new family too much. The fact that the company provides training also appeals to him. Although he took a sales class in college, he believes he can be more successful with additional company training. The other company Vince interviewed with offered a one-week training program, which he thought might not be enough. The compensation is particularly appealing. The offer from the other company included a higher base salary, but first-year earnings were expected to be only about $45,000 and there was no mention of earning $180,000. With student loans to pay off, Vince is interested in earning as much as he can as quickly as possible. Although Vince is eager to sell, he wants to land a job with a company that provides ample opportunity for promotion. Based on his conversation with Frank, Vince sensed such opportunity existed at StopFast.
Citation:
Ingram, Thomas, N. et al. Sales Management. Available from: VitalSource Bookshelf, (10th Edition). Taylor & Francis, 2019.
1. Approaches to Locate Prospective Candidates: Frank might have used traditional methods such as job postings on company website or job boards, employee referrals, or recruitment agencies. He could also have used modern methods like LinkedIn or other social media platforms. 2. Improving Recruitment and Selection Process: Frank could improve his process by incorporating a more structured approach. This could include clearly defining the job requirements, using a diverse range of recruitment channels, implementing a rigorous screening process, and using structured interviews. He could also consider using psychometric tests to assess candidates' skills and cultural fit. 3. Legal and Ethical Considerations: Frank should ensure that his recruitment process complies with all relevant laws, such as anti-discrimination laws. He should also ensure that the process is fair and transparent, respects candidates' privacy, and avoids any form of bias. 4. Tools for Selecting Candidates: Frank could use a variety of tools to select the right candidates. These could include structured interviews, assessment centers, psychometric tests, and reference checks. He could also consider using a job-fit test to assess whether candidates have the right skills and personality traits for the job. Remember, these are general suggestions. The specific strategies that Frank should use would depend on the nature of the sales rep position, the context of his company, and the specific challenges he is facing in his recruitment process.
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