Supervising a Sales Force

Posted on November 28, 2012

Introduction 1 Managers supervise Sales Representatives to Improve the probability that they will make sales. This objective should imply profitable sales; but not all Managers seem to appreciate this point. Managers should remember that Sales Representatives can sell a product at a loss if the Representative spends a very high proportion of their time selling one Prospect who has a low potential for future sales. 2 This situation occurs less often in the retail selling field, but even here the technique of tactfully and pleasantly disengaging oneself from the window-shopping type proves valuable. The Need for Supervision 3 Even if all Sales Representatives had appropriate motivation and could see their own selling faults, the need would still exist for someone to decide what each Representative should do in relation to all other personnel in order that the Company achieves its Sales objectives. 4 Supervision primarily entails giving direction to each persons work and in relation to the work of others. It should ensure that people do what they should do and do not do useless things or activities which harm overall Company objectives. Good supervision will also: (a) provide guidance to improve the abilities and activities of Sales Representatives in their work and (b) encourage and help them so that they can more easily help themselves. 5 Sales Representatives have difficulties peculiar to their occupation since most of their work involves dealing with other people. Success or failure in a sale depends on decisions made by other people. While Representatives can influence the decisions they must face rebuffs, disappointments, rudeness, and brush-offs. Supervisors need to offer encouragement and support to maintain high morale in their Sales force. 6 Supervision of outdoor Sales Representatives has special difficulties. They work over a wide area and often they see no one from their Company for several days at a time. They spend a fair proportion of their time travelling, often alone. Sometimes they have to put up with unsatisfactory accommodation and meals. They frequently have to travel away from their families for long periods.

In these circumstances especially after an unsuccessful day Sales Representatives can rate their work as unrewarding. These difficulties mean that Managers need to offer a high quality of supervision. The fact that travelling time restricts contact between Supervisor and Sales Representatives makes the task even more difficult. Major Factors in Supervision 7 Supervision in the sales field (as in all other managing activities) has the following three activities planning, directing and checking. In particular, Supervisors should: (a) Assign a definite amount of work for Representatives to do. (b) Set required standards of performance. (c) Evaluate each Representatives performance against the standards. 8 Supervisors should also divide the available market area into appropriate territories, assign these territories to particular Representatives, and ensure the Representatives set targets for sales in each of their territories. 9 Four different groupings exist for standards: (a) Volume How much does the Sales Representative sell? (b) Expenses How much money does it cost to make the sales? (c) Profit What gross profit does each Sales Representative make? (d) Activities What does the Sales Representative actually do? (Examples. How many Prospects seen? How many calls made?) 10 To effectively evaluate the performance of Sales Representatives, Supervisors must obtain details either by: (a) observation or (b) from reports and records. 11 To achieve the objective Increase the probability that Sales Representatives will make sales, Supervisors must continually give guidance to their Representatives. Since they cannot work with

their Sales Representatives all the time, they must try to encourage the Sales Representatives to give of their best even when not under direct supervision. 12 Supervisors aim to form such an attitude and feeling in Sales Representatives appropriate that they supervise themselves. If Representatives have the appropriate motivation and know what they should do, their own attitude and desire for satisfaction can prove an excellent substitute for any other persons supervision. In the long run, it may prove more important since, even with excellent supervision, Representatives with inappropriate motivation will not feel amenable to supervision. 13 All these factors inter-relate. Giving guidance can contribute to gaining appropriate motivation, depending on how someone gives guidance; and Representatives with appropriate motivation may set a higher standard of accomplishment for themselves. Methods of guiding Sales Representatives 14 A variety of ways exist which Supervisors can use to help Sales Representatives improve their work. A logical classification will help to consider them. Methods available include: (a) Personal contact with individual Sales Representatives On the job In the office Over the phone (b) Personal contact with a group of Sales Representatives Meetings, conventions, and conferences. (c) Personal correspondence (d) Literature for all Sales Representatives Manuals Sales Bulletins House Journals

Giving Guidance by Personal Contact On the Job 14 This method provides most flexibility. Physical presence of the two persons allows Supervisors to see the reactions of their attempts at guidance. Thus they can adjust them accordingly. They can observe reactions to instructions and take steps to ensure the Representatives understand them. Supervisors can influence selling techniques soon after they have seen the Representatives use them. They can make suggestions, praise useful approaches, point out faults in others, and give information on new products. The personal contact also enables Supervisors to get to know their Representatives the way they think, their family background and problems, and their aims and desires. Likewise the Sales Representatives can get to know their Supervisors. 15 All this information will assist to find better ways of improving a Representatives work and it will help Supervisors understand and predict the reaction each Sales Representative will have to particular supervisory approaches. Supervision in the field means that Supervisors have taken the trouble to visit their Representatives. This point in itself will often help the morale of such Representatives and they will feel better about accepting advice and guidance. Although it proves expensive in travelling time, all Sales Supervisors should spend a significant part of their time out of their offices and in the field. Supervisors who say they have not time to do so (even though they class it as a good thing) cannot do an adequate job of supervision. 16 Even in the retail field, Supervisors can spend too much time in their office. Sometimes a word on the job often has a much-more-beneficial effect than something said in a formal office interview. Supervision in the Office 17 Office Interviews imply that Representatives come to the Supervisors. In many Companies, Sales Managers or Sales Supervisors have regular inter views with their Sales Representatives so they can give instructions, discuss the territory of the particular Representative and their work, and generally provide a means of communication for whatever information the Company and the Representative have to pass on. 18 This method usually has more formality than the on -the-job approach. With outdoor Representatives it allows Supervisors to plan and make the most use of their time, rather than spending time travelling between Representatives; but it will not substitute for getting out and seeing Representatives in action on the job.

19 For carrying out counselling interviews, especially those that involve reprimands, the office interview may have an advantage over the on-the-job interview. It should provide a formal setting within the firm, in a place free of interruptions. However Supervisors should remember that a chat in a Representatives car or home or over a beer may rate as just the place if the interview requires an informal approach and atmosphere. Supervision by Telephone 20 People can talk to each other by phone very easily. This method allows Supervisors to give instructions quickly. However, the communication between the parties can only use aural signals which do not always help people to know accurately the reactions of the other party to what they have said. In general, it helps to let Sales Representatives know that the office has an interest in their doings and to restrict actual business to the giving and receiving of routine information and factual details concerning territories and the Company. Supervisors should leave controversial matters in the guidance of Sales Representatives to a more personal contact. Supervision by Contact with a Group of Sales Representatives 21 The words: meetings, conventions, and conferences aim to describe all the means of giving guidance to Representatives when they come together. This approach saves the time of Supervisors; however, it still proves expensive to gather Representatives together particularly for outdoor Representatives. Calling Sales Representatives together in a group proves appropriate for giving important instructions and information about the Company such as launching of a new product or a new advertising campaign. 22 In the retail field, meetings of sales staff cost considerably less. Therefore Companies can use them more frequently. For less formal purposes, two or more small groups in their department may prove convenient, time saving, and provide a means of quickly determining group reaction to a new instruction or selling idea. Personal Correspondence with Individual Sales Representatives 23 A letter offers Supervisors a personal method of communicating with each Representative. Supervisors should use it when it proves impractical to communicate with each Representative by personal verbal contact.

24 Letters do not prove suitable for conveying emotionally-charged information (e.g. reprimand or criticism). Even so, some weak Supervisors do use them to tell a Representative something which they will not discuss face-to-face. This weak approach reaps it own reward in inappropriate motivation and lack of respect for the Supervisor. 25 Letters, however, will prove quite useful for answering specific queries where a phone call will not prove appropriate. They give a permanent record and Representatives can study them at leisure. In some cases a carefully-composed letter may help to give a clearer communication than a personal interview. 26 In using letters, Supervisors should avoid such faults as not signing them, writing too many, and writing when they have no real purpose to achieve, dictating and/or checking them so hurriedly that their meaning gets lost. The area of effective letter writing rates as a subject on its own; but many Executives can improve themselves quite considerably if they take the trouble to read over their letters carefully and try to see how they would feel if they received such a letter. Literature for all Sales Representatives 27 This literature consists of sales manuals which allow Representatives to have permanent written record of such matters as Company history and back-ground; policies regarding sales, returns, credits; and any other details useful for Representatives to know. The term also applies to a manual which the outdoor Sales Representative carries as an aid to sales. It may contain price lists, photographs, and technical specifications. Sales bulletins, house magazines, newspapers, etc. also prove a means of communicating with Representatives for the purpose of giving guidance and encouraging better motivation. Summary 28 The primary aim of supervision involves improve a Sales Representatives ability to make profitable sales. 29 No Company should eliminate supervision, but proper definition of the job and appropriate motivation can help to reduce the amount of supervision required. Supervisors must exercise the managerial functions of planning, directing, and checking, so that they distribute effectively the workload, set proper targets, and evaluate performance in comparison with these targets. They should

guide the Representatives in their work and must choose carefully the most-effective communication method of giving this guidance.

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The Definition of a Sales Evaluation

Sales evaluation involves an analysis of the performance of your sales personnel. Through sales evaluation, your sales team members learn about their strengths and weaknesses, so they know which areas to improve. If you conduct proper sales evaluations regularly, you may improve the efficiency of your sales efforts and drive up your profits.
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Function
A sales evaluation helps you determine which salespeople perform well and which don't. With that information, you can reward your sales team members according to their performance. Through the evaluation, salespeople may learn of your expectations and set their goals accordingly. You may develop training and counseling programs for the sales team based on the results of the sales evaluation. The evaluation may also lead to a promotion for strong salespeople and termination for weak salespeople.

Objective Measures
A sales evaluation may contain objective data based on statistics. You may analyze a salesperson's efforts by measuring the amount of work he puts in. For example, you may count the number of sales calls he makes and the number of customer meetings he has. The sales evaluation may also focus on an employee's sales results. For example, you may measure how many products a salesperson sells and how much revenue he generates.

Subjective Measures
A sales evaluation also usually contains subjective observation regarding the salespeople's performance, especially when you have little data for objective evaluation measures. For example, you may have just established your sales operation and not collected enough data to sufficiently reflect your salespeople's performance. You may not always keep track of how many phone calls a salesperson makes to each customer or how long each call takes. When choosing subjective measures, check that each one affects a salesperson's performance. You may look at a salesperson's product knowledge, customer relations, aggressiveness, enthusiasm and compliance with company policies.

Process
Most companies conduct sales evaluations every year, according to Texas Tech University. You can obtain the information for the sales evaluation from various sources, for example from the sales supervisors, the customers and other salespeople. You may decide to talk to the salespeople yourself or delegate the task to the sales supervisors. Assign enough time to discuss all your concerns regarding the salespeople's performance and give them a copy of the discussion points for their reference.

Compensating Sales Personnel : Overview

There is no single sales compensation plan that is suitable for all organizations. Every organization has to design its own compensation plan that will enable it to fulfill sales objectives and to attract and retain sales personnel. A truly successful sales compensation plan must help achieve overall organizational goals and not just sales goals. The objectives of a compensation plan should be clearly stated, so that it becomes easier to determine whether the organization is able to achieve them. The compensation plan must fulfill the primary objective of balancing the needs of the sales personnel, and provide them income and security. It should also be effective in all business conditions good or bad. It should be fair, flexible, easy to administer, fulfill the needs of sales personnel and lead to the achievement of organizational objectives. Organizations compensate sales forces in many ways. The compensation plan may be a straight salary type, a commission-based type or a combination of salary, commissions and incentives. While deciding on the type, it is necessary to consider the differences in territory characteristics, sales activities and objectives of sales personnel. Sales contests are widely used as a source of compensation, especially when an organization wants to emphasize certain activities with the primary aim of increasing profits. A sales manager must plan a sales contest well in advance and avoid indiscriminate usage. Otherwise, sales contests will lose their efficacy. Compensation plans have an impact on recruitment, training, evaluation and control functions too. While designing a compensation plan, its objectives must be stated. Next, the level of payment should be established. Different industries have different levels of payments. The last step in designing the plan is deciding on the method of payment for the sales force. It may be in the form of a straight salary, commission or bonus or a combination. Drawing account, special cash and non-cash incentives and fringe benefits are also used as a form of payment to the sales force. The effectiveness and success of a compensation plan depend on its execution. The plan should be tested in a territory before it is implemented throughout the organization. To ensure success, periodic monitoring is also essential. Sales force expenses make up a large portion of total organizational expenditure. To ensure profitability, a sales manager should control sales force expenses in the form of expense quotas. An expense plan must be easy to administer, beneficial to the organization and sales personnel and must be communicated clearly to the sales force. In most organizations, selling expenses are be reimbursed either completely, partially or in the form of an excess commission that sales personnel must use for meeting selling expenses. Fringe benefits have become a common method of compensation in most organizations. This is also called indirect compensation. Fringe benefits may be in the form of retirement benefits, insurance schemes, employee stock options, medical benefits and paid holidays.

With changes in the global environment, organizations have started formulating tailor-made sales compensation plans for individual sales personnel. Ultimately, the success or failure of a compensation plan is dependent on its ability to motivate sales personnel to fulfill organizational objectives and to retain the best talent in the organization.

Chapter 13 : Overview
Objectives of compensation plans Balancing the needs of personnel Managing effects of time Characteristics of compensation plans Fairness to all Flexibility Provide incentive and motivation Lead to direction of efforts towards company objectives Ease of administration and comprehension Types of compensation plans Straight salary Straight commission plans Combination salary plans Designing compensation plans Determine specific objectives Establish desired levels of earnings Methods of payment Implementing compensation plans Sales contests Planning sales contests Evaluating sales contests Sales force expenses Expense plans Types of expense plans Fringe benefits Elements in fringe benefit Advantages of fringe benefits

Evaluating Sales Personnel Performance : Overview

One of the most important responsibilities of sales managers is to evaluate the performance of the sales personnel. The performance appraisal period can become one of those times that a salesperson dreads, unless the appraisal is effectively conducted. Ineffective performance appraisal tends to become a time-consuming and unpleasant activity for the sales manager as well as the sales personnel. The factors affecting sales peoples' performance are many. Some of these are beyond the control of the individual, while some can be modified. Aspects like motivation, skillset, job satisfaction, role perception, personal factors like age, sex, height, etc; the ego drive, and empathy towards the customers are inherent in the individual salesperson. Environmental and organizational factors, along with the different functions of sales management come under external factors. It is difficult for the sales manager to predict the influence of the external factors on the performance of the sales force. To measure performance, it is necessary for the sales manager to put in place a performance evaluation procedure. A proper evaluation process ensures that the organization is well managed. It also provides the sales personnel with information on their performance and gives recommendations for further improvement. Performance evaluation can also help in improving the relationships between the sales force and superiors by minimizing suspicion and improving interaction. The performance evaluation process generally involves five steps. The first step is to determine the factors that affect the performance of the sales force. The next step involves the selection of criteria that will be used to evaluate the performance. Step three involves establishing performance standards that can be used as a basis to compare the performance of the sales force. Step four involves monitoring actual performance. The last step is to review and provide feedback to the sales personnel. The purpose of conducting performance evaluation is to crosscheck whether the sales force activities are in alignment with organizational objectives. It also helps monitor the sales force activities and provide remedial action, if required. Performance evaluation also helps to prepare a future action plan for the sales personnel and fulfill the organizational objectives. It exerts an influence on the mode of compensation, fixing of sales quotas, and decisions on the transfer or removal of the salesperson from the organization. In most organizations, it is the immediate superior or the sales manager who conducts the performance appraisal. Sometimes a team of people including the personnel manager and the department head, along with the sales manager, appraise the sales personnel. The timing of appraisal also varies for different organizations. It depends on the complexity of the sales plan, the costs involved, and the current objectives of the organization. Periodic performance appraisal is necessary to identify any discrepancies in the overall sales plan and correct them. The sales manager or the concerned person involved in appraising the sales force can take

the help of quantitative or qualitative criteria. These are also termed the behavior and outcome components. Qualitative criteria include sales skills, territory management skills, personality traits, etc. The quantitative factors include the sales volume, average calls per day, sales orders, etc. Quantitative criteria are those aspects that measure the sales performance in terms of the end results whereas qualitative criteria involve all those activities that the sale person does to achieve the end results. The sales manager must ensure that the performance standards are set to compare and evaluate the actual performance of the sales force. The standards vary from industry to industry and are different for different job profiles. Performance standards come under quantitative standards, qualitative standards, time-based standards, or cost-based standards. All the sales force activities can be segregated into one of these four categories and compared with the base standard. Many methods of performance evaluation have been developed over the years. Yet, there is no single method that can be considered ideal for all organizations. Some of the commonly used methods are essays, rating scales, rankings, management by objectives and behaviorally-anchored rating scales. Several modern methods like critical incident appraisal, work-standards method, family of measures, etc., have been developed to suit variations and other requirements. Finally, regular monitoring and review of the sales force activities is also necessary to ensure that the organizational activities are aligned to the sales plan.

Chapter 16 : Overview
Sales Force Performance Determinants of Sales Force Performance Internal Factors External Factors Performance Evaluation Purpose and Reasons Who should Evaluate When to Evaluate Information Sources for Evaluation Criteria for the Evaluation of Sales Force performance Qualitative Quantitative Establishing Performance Standards Methods of Sales Force Evaluation Essays Rating Scales Forced Choice Method Ranking New Methods of Evaluation