Sales and Distribution

Management
Tushar Pal
Real Estate Industry
 We have talked to direct Business Development Executives.
We have talked to Operation Manager handling the sales executive
team.
Compensation Strategy for Direct Sales
Executive
Profile :
They are given an area in which they have to work for nearly 7-10
days. In this time period they have to search the whole area for any
new or upcoming real estate projects and their marketing officers.
Now they have to contact the marketing officers of these projects and
set a meeting with them.
Marketing of the Real Estate Projects is done by:
1.Independent Real Estate Consultants.
2.Builder Marketing Offices
 In meeting they have to pitch the 2 products of HDFC RED to these
real estate consultants.
The products are the online platforms for buying /selling/ renting of
residential and commercial real estate available across 23 cities in
India.
In pitching added benefits like arrangement of easy home loans and
financing of a part of project are also used in order to have more
conversions.
In the end if the prospect i.e. The Builder/Real Estate Consultant
agrees on using HDFCs Platform for its projects marketing the deal is
closed.
 Compensation Structure:
The whole compensation for direct sales executive includes fixed +
variable pay.
Fixed pay was of Rs.3,60,000 yearly.
Variable component includes flat incentive of 9000 per month if the
executive is able to get 50 builders/real estate consultants on board
with HDFCs Platform.
After the target of 50 for every new addition fetch Rs.250 each
 Apart from this transport allowance of Rs.2500 is also given.
(subjected to completion of target of 50 additions)
Rs.1500 is also given as Food Allowance per month flat. (subjected to
completion of target of 50 additions)
At the year end performance appraisals are also done which got an
average increment of about 15% on fixed compensation this year.
Minimum compensation a sales executive make in a month is
30000+9000+4000=Rs.43000 pm.
Conditions* target per month is of 50 clients , if not met no variable
components are paid and at year end appraisals can affect growth in
fixed salary also.
Compensation Strategy for Team Leader
Profile:
The direct sales team in HDFC is managed by marketing/operations
managers.
They are responsible how these products are performing in market
and how much revenues they are generating.
Here revenue figures are directly linked to the no. of clients added by
the sales team under them.
The primary work of a operation manager there was to analyze an
area in which the sales team is sent.
 Area was selected by estimating the no. of new projects and the no.
of residential colonies and commercial markets they have.
They have to estimate the living standards and purchasing potential
of an area and based on these factors an area is selected.
After selecting an area sales potential is determined by using google
maps to know how many consultants and builders offices are
operating in the area.
At the end sales executive are assigned to different sub areas keeping
in mind each one get equal opportunity.
 There are 4 Team Leaders each having a team.
If the deal of any property is finalized by the client of his particular
Team Leader then the company get 1% of the whole deal.
At the month end the total no. of deals finalized by the
consultants/builder under his team is calculated he is awarded some
lump sum bonus for this.(undisclosed)
Fixed compensation amounts to Rs.14 Lakhs per year.
Findings and Critical Analysis-Team Leaders
After talking to sales/operation managers they were mostly contented
with the present compensation scheme as it contains a very large
component of fixed pay in comparison to variables.
So if the sales executive team is under performing then also Team
Leaders are not much worried.
But due to this mode of operations there is a high attrition rate in
company , in annual appraisals company asks its most of the not so
good performing managers to leave.
 So, the company is paying their managers high and is giving a lot of
free hand to their managers in deciding what they want to do with
their teams but in turn company wants results.
But I think that there should be more variable pay component so that
there could be a competitive environment and they strive to achieve
targets as executives were doing.
Findings and Critical Analysis-Sales Executives
After talking to sales executive I found out that they were unhappy
with their managers.
They think that they are underpaid in comparison to their managers,
which is true but the normal sales executive with that qualification
makes lesser than what they are making if they are in other industry.
As managers are given a free hand in team management sometimes
the manager could be very harsh regarding completion of targets
which sales executives sometimes feels demeaning.
 Sales executives complain about the unrealistic and meagre amount
they get as transport and food allowance.
But the company wants their sales executive to sieve the area
thoroughly so that even the smallest consultant office of smallest of
the projects are not left out from reaching , this could be done when
they are on foot and hence company argue not to provide that much
of transport allowance.
Motivation Strategy
Team Leader uses Job Enlargement as motivation strategy for sales
team executives.
Under this a team leader is made who will be unofficially managing
and coordinating the whole team.
In this usually the best performer was given the charge of a certain
area and was asked to coordinate the activities of other team
members in that area.
He is also made part of discussion while deciding the areas for sales
executives.
 This led to increased self esteem and the sales executive through this
think that their opinions are also used while deciding policies for their
team members.
They get to work like Managers.
Moreover there is a chance of getting a higher increment/promotion
in upcoming appraisal also.
Sales executives get promoted to some higher positions that are
office based and more paying also.
MAHINDRA AND MAHINDRA
Selling Mahindra vehicles and related accessories to the customers
walking-in/booking online
Every sales cycle requires atleast one face to face interaction with the
customer that requires the sales executive to either present a demo
of the vehicle, offer and complete a test drive request or close a sale
or all of the above given activities
Categories of sales executives
Category A- 6 vehicles a month Decided on the basis of
performance and competency by
Category B- 5 vehicles a month the dealership head and the head
office on the basis of training
Category C- 4 vehicles a month program results
All categories can sell all models
High end models like Thar given to experienced Sales Executives on
the basis of their previous experience
Targets for an individual sales executive comprise of Vehicle sales,
Accessories sales and Finance sales
Compensation Strategy for Direct Sales
Executive
Compensation Structure:
The whole compensation for direct sales executive includes fixed +
variable pay.
Fixed pay was of Rs.2,50,000-3,00,000 yearly.
Variable component includes flat incentive varying from INR 3000-
25000 per month if the target is achieved.
After the given target extra incentive for the vehicles booked
Incentive amount varies for different models
 Apart from this transport allowance on the basis of categories is
given- ranging between INR 1500-4500 (subject to completion of
satisfactory sales numbers)
At the year end performance appraisals are also done which got an
average increment of about 8-12% on fixed compensation this year.
Internal competitions like Mahindra Idol to bring out the talent and
competition among the sales force across the country, followed by
R&R
Compensation Strategy for Team Leader
The team leader is compensated both with monetary and non-
monetary incentives.
Basic compensation or fixed pay is INR 4-5lacs yearly
Monetary incentives range between INR 20,000-50,000 for
completion of sales targets allotted monthly
Reward and recognition programs conducted annually to reward the
best performing dealerships
Sponsoring vacation for the Team leader with outstanding
performance
Findings and Critical Analysis-Team Leaders
The team leaders are content with the present compensation scheme
as it contains an equal balance of both the components- fixed and
variable
So if the sales executive team is under performing them the Team
Leaders help them achieve their targets because their incentives
depend on the target achieved by his/her team
The team leaders have full control over the distribution of targets to
their team members where in the end the company is concerned
about the numbers being achieved to the maximum
 The team leaders are also responsible for sending data for target
setting. A number close to the targets decided by the top
management and the numbers suggested by the team leaders are
floated as the final targets.
Team leaders are also made to switch their locations to improve
performance of the dealerships that are underperforming.
Unofficial picnics and short trips are organised by the team leaders
across various dealerships to improve interaction between the
employees at several dealerships
Findings and Critical Analysis-Sales Executives
There is a great pressure on the sales executives and thus they
demand a good team leader who can balance the numbers and the
efforts required and help them wherever required
If anyone is unable to achieve the given targets, the team leader
attends the customers along with the sales executive to help him
complete the targets
The sales executives on the field are also considered a source of data
for market potential analysis
The sales executives are also given preferences for field sales or
showroom sales if they perform well in both the areas
Motivation Strategy
Team Leader uses monetary incentives as motivation strategy for
sales team executives
Under this a team leader conducts events like Spot Incentives,
Incentives based on deals closed by referrals etc.
Good performing sales executives are chosen for closing elite sales
while the rest are promoted/demoted within categories
The team leaders ensure that every sales executive is assured that
he/she is a Mahindra employee first and then a sales executive
 This led to a boost in the confidence of sales executives and instills a
sense of belongingness and the feeling that their presence is essential
for the organization.
Inviting families for
 Education Industry

Jaro education, one of the leading service platforms, caters to needs of working professionals by offering them varied
choices in management programs and in institutes/ universities for pursuing the course online.

It believes in guiding clients to opt for an institute/ university offering online management program tailored-in with the
current industry that also suits their requirements.

Being in the Consulting Service Industry, it expects all of its sales executives to engage and interact with the clients
through in-person meeetings and via social media.
Hierarchy of the Sales Team
Sr. Manager/TL

Manager/ATL

Corporate Sales B2C Sales

Executives Executives

Graduate Graduate
Trainee Trainee

Intern Intern
Compensation Strategy
SR. MANAGER/TL:
Fixed Remuneration
Incentive Slabs on Target Achievement- Entire Season
1. 50% achievement- 1 lakh rupees
2. 75% achievement- 5 lakh rupees
3. 100% achievement- 7 lakh rupees+ International trip(2
tickets)+ Domestic Team Trip
MANAGER/ATL:
Fixed Remuneration
Incentive Slabs on Target Achievement- Entire Season
1. 50% achievement- 50000 rupees
2. 75% achievement- 3 lakh rupees
3. 100% achievement- 5 lakh rupees+ International trip( 2 tickets)+
Domestic Team trip
4. Personal reference: INR 10,000
Corporate Sales Executives:
Fixed Remuneration
Incentive Slabs on Target Achievement- Monthly
1. 0-100% of Base Target: INR 2000 on every successful conversion
2. 100-125% of Base Target: INR 5000 on every successful conversion
3. 125-150% of Base Target: INR 10,000 on every successful conversion
4. 150-200% of Base Target: INR 20,000 on every successful conversion
5. Personal reference: INR 10,000
Season Target Completion
1. International trip
2. Domestic Team trip
B2C Sales Executives:
Fixed Remuneration
Incentive Slabs on Target Achievement- Monthly
1. 0-100% of Base Target: INR 1500 on every successful conversion
2. 100-125% of Base Target: INR 3000 on every successful conversion
3. 125-150% of Base Target: INR 5,000 on every successful conversion
4. 150-200% of Base Target: INR 12,000 on every successful conversion
5. Personal reference: INR 10,000
Season Target Completion
1. International trip
2. Domestic Team trip
Interns:
Fixed Stipend
No Base Target
Incentive Slabs on every successful conversion- Monthly
1. On every successful conversion- Bonus of INR 2000
2. Season Target Completion: Domestic Team trip
3. Personal reference: INR 10,000
Motivational Incentives
Monthly Contests: (On Completion of Monthly targets; Tls and ATLs
are not eligible)
1. Mumbai Darshan via Helicopter
2. Imagica /Aqua Imagica free passes for 2
3. Barbeque Nation Lunch Buffet for 2
4. Flipkart Shopping Vouchers worth Rs. 10,000
5. Shoppers Stop Shopping Vouchers worth Rs. 10,000
Other Benefits
Travelling Reimbursement (For Client Meetings):
1. For TLs and ATLs: Air tickets, Taxi allowance
2. For Executives, Trainees and Interns: 3rd AC Railway Tickets/AC
Volvo Sleeper Buses, Taxi Allowance
Hotel Accomodation (For Client Meetings):
1. For TLs and ATLs: Personal AC Room in a 3 Star Hotel.
2. For Executives, Trainees and Interns: Twin Sharing AC room in a 3
Star Hotel
Sim Card Allowance: One Postpaid Sim Card for all employees
Annual Rewards and Recognition by Top
Management
Sales Executive of the Year
Team of the Year
Award of Aprreciation for all executives who achieved 100% Target
during the season
Motivation in the form of Mailers
APPRECIATION FROM CEO
THANK YOU