effective sales management

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Effective Sales Management

Obaid Saad Alabdali

DBA, MBA, PhD

Umm Al-Qura University

TIHAMA

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Topics To Be Covered

Background Profiling and recruiting sales force Selecting applicant Hiring and socializing new sales people Developing and conducting a sales training

program

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???

It cost Millions and years to build a name, but 5 minutes to destroy it.

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Background

When times and the economy are good, the market drives our companies.

When times and the economy are poor, we must drive our companies

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Background (con..)

People buy from – People they know,– people they like,– People they trust!

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The Sales Wizard Says….

There are three types of sales managers:– Those who make things happen– Those who watch things happen– And those who wonder what’s happening

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Death of salespeople

Our product is steel. Our strength is people Our sales people are no important than any

of others They are part of a team and you want to

help make the whole team as strong and as productive as possible.

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World Class Examples

IBM, is the world’s leading provider of information technology solutions.

IBM sales were $75.9 billions (1996) Total workforce is 241,000 employees IBM employs 40,000 salespeople (10,000 in

USA)

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IBM

IBM received the World Class Sales Benchmark Award based on customer satisfaction

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Five Success Factors That Explain IBM’s Success

Strong product and application knowledge Attention to customer needs and problems Quality product and services Customer advocacy Excellent technical support

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Leave me my salespeople

You can take a way my money and take a way my factories, but leave me my sales people and I will be back where I was, in two years.

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Myths About Selling

Sales people are born-not made Sales people must be good talkers Selling is a matter of knowing the

right techniques or tricks A good sales person can sell anything A good sales person can sell ice to an

Eskimo People do not want to buy

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What You Think of Sales People?

Cigar-smokingback-slappingjoke-telling

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Types Of Sales People

Order taker Order getter Support sales people

– missionary– technical

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Sales people Selection and Strategic Planning Sales group directly bring money It is directly involve with carrying out the

company’s strategic marketing plan Marketing strategy implementation

– ( considerable services)

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Recruiting

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Profiling and Recruiting Sales People

Select the sales people Right people is the key to successes

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Important of a Good Selection Program

– It addresses the problem of getting good people– It improves sales force performance– It promotes cost saving– It eases other managerial tasks– Sales managers are no better than their sales

force

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Plan for recruiting and selection

– Establish responsibility for recruiting and selection ( top sales executive, field sales manger, human resource department, or combination)

– Determine the number and type of sales people– This involve the analysis of market and job

( write job description)– Establish the qualification for that job.

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Recruit Applicants

Identify sources of recruits Select the source to be used Contact the recruits

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Select applicants

Design a system for measuring applicants Measure applicants against hiring

qualifications Make decisions

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Establish Responsibility for Recruiting, Selection, and Assimilation Management must decide who will be

responsible for recruiting and selection decisions and who must be responsible for assimilating the new hires into the organization.

That will depends on size of the company and nature of the job

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Determine the Number of People Wanted

– Right number– Good faith in their selection system.– Good forecasting– Study your marketing plan (expansion)– Factors affecting size of sales force

• promotion

• retirements

• termination, and resignation

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Determine the Type of People Wanted Three tasks associated with determining the

type of people– Job analysis– Job description– Job qualifications

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Job Analysis

Is the actual task of determining what constitute a given job– study every aspect of the position (by any

member of the sales force, human resource or by an outsider)

– requires observation and interviewing with sales rep, customers, other sales reps

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Job Description

Once job is analyzed, the resultant description should be put in writing

must be done in great details It is not enough to say that a sales person is

supposed to sell the product, call on customers, or build goodwill toward the company

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Scope of Job Description (1)

– Title of job– Organizational relationship (to whom do the

sales person report)– Types of products and services sold– Types of customers called on– Duties and responsibilities related – Job demand (mental and physical i.e.. Travel)

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Scope of Job Description (2)

Use of job description– Job analysis and job description must be used

as strategic guidelines for interview, application blanks, psychological test and others selection tools

– It can be a foundation for sales force training program

– used foe compensation structure– Establish Work load

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Determine Hiring Qualifications

The most difficult part of the entire selection process.– Demographic characteristics, education and

experience, do little to explain person performance

– Personal history may be better indicator for performance

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Desirable Characteristics for Sales People– Mental capacities (planning and problem

solving)– Physical (appearance and age)– Experience (sales and other business

experience)– Education (no. of years, degree, major)– Personality– Skills communication

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Buyers’ Top Ten Sales Persons Traits

– Knowledgeable– Organization– Follow-through– Punctuality– Energy– Promptness– Problem solver– Willing to work hard and Honesty

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Methods of Determining Qualifications

There is no satisfactory methods to use Some methods can be used

– study of job description (technical, supervision)– Analysis of personal history

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Recruiting and Its Important

It include all activities involved in securing individuals who will apply for the job.

Recruiting should not be done haphazardly (overlooking good sources/ cost)

Get enough qualified applicants to maximize the chance of getting good one

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Find and Maintain Good Recruiting Sources Many sources Determine the best sources Find out from where the best sales people

came from Maintain good relationships with good

source

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Sources of Sales Representatives

– Within the company– Other companies (competitors,customers, non-

competitors)– Educational institutions– Advertisement– Job centers– Voluntary applicants– Part-timer workers

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Advertisements

Attract attention and have credibility Company name Product Territory Hiring qualification Compensation etc.. How to contact the employer

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Evaluation of Recruiting Program A company should continually evaluate the

effectiveness of its recruiting program

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Picking Winners is Hard?

In the selection, the number and type of sales people are determined and applicant have been recruited.

Now management should be ready for developing a system for matching the applicants with the predetermined requirements and the actual use of this system to select the sales people.

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Selecting Applicants and Strategic Planning If it handled effectively, it can help ensure

successful sales performance A poor job in processing applicants can

hinder implementation Matching company needs and applicants

potential is very important

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Legal Considerations

Do not ask: (job relevant)– age– How many children (age, many, who cares)– Applicant height or weight– Citizenship– Was arrested– Marital status – Name and address of any relatives

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Application Blanks

personal-history record (application blank) Company uses two blanks, a short one and a

longer one, more details Short one used as an initial screening

device. Company asks only for information it

intends to use now or later

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Personal Interviews (1)

No sales person is ever hired without personal interview

Knowing the applicant personally Personal fitness for a job Conversational ability Speaking voice, social intelligence Appearance

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Personal Interviews (2)

Interpret and get further information about facts stated on the application blank.

Fundamentally, all the questions asked during an interview aimed at learning the:– Is the person qualified for the job– How badly does he want the job– Will the job help him to achieve his goals– Will this applicant work to his fullest ability

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Reliability of Personal Interview

Situation/behavioral type of interview for sale position is good.

It heavily dependent on the behavior of the interviewer.

Gut reaction Interviewers talk too much listen to little They ask the wrong questions

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Improving the Validity of Interviews Review the applicant’s resume or

application before proceeding further. Have more than one interview with each

candidate Use standardized rating form that they fill Review these information to make ranking Train interviewers

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Interview Structure and Focus

Interviews can be differ (extent of Qs) Totally structure

– all interviewers use the same guide sheet containing a series of questions

– Ask these questions in order listed– Inflexible

Informal-ask few question to get applicant talking, interview does little talking

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Stress Interview

Is a type of unstructured interview in which the interviewer intentionally places the applicant under stress.– Rude, silent, or aggressive in questions– give you a pen and ask you to sell it.

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On the Job Interview

Asking the applicant to spend a day observing one of the company current sales rep

Ask the applicant to make a presentation to customer

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Behaviorally Based Interviews

New type of interview which focused on the applicant’s behavior, past or intended.

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Timing Of The Interview

Executive valuable time Initial stages (15-20 minutes) Later stage, the more time talking with the

applicant the better

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Psychological Testing

A company uses a battery of these tests rather than one single test.

It is complex and controversy

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Types of Tests

Mental intelligence test– intended to measures native intelligence

Aptitude tests– tests a person aptitude for selling

Interest tests Personality tests

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Problem in Testing

Testing may eliminate truly creative person, who might not fall in the average or normal rang in testing

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References and Other Outside Sources The applicant furnishes the leads; a

reference Company get information on its own

initiative, credit, insurance report, school record, and motor vehicle.

Reference check made by letter, telephone, or personal visit (advantage, disadvantage of each methods)

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Assessment Centers

Assessment center technique is a centralized, comprehensive evaluation procedures involve testing, interviews, and simulation exercises such as business game, discussion group, and individual testing

Very expensive Takes one to three days to evaluate

applicants and their performance

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Reaching A decision about an Applicant A company must decide whether to make a

job offer based on the information they get. Do not leave any applicant dangling If you decide not to hire him, tell him

gently, but clearly If you decide to hire him, make a formal

offer and persuade him to accept it.

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Hiring; The Key to Your Success

If you do not master the skills needed for effective hiring and firing, your business will run like a car with nearly flat tires, it will go, but never as efficiently as if it were operating in peak condition.

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Do you really need another employee?

Full time employees (Pro and cons) Overtime Redistribute work (workflow) Outsourcing Automation Co-Op students

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Hiring an employee is expensive Time and money wasted by poor hiring

decisions Once a person is hired, it is not easy to

reverse the choice if it proves to be a mistake

More emotionally troubling is firing

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If you hire an employee who does not work out, what you will do?

Fire him and hire another one? Replacement availability! Cost

– Salary– Overhead– Social security– Time spent

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Calculating Cost Per Hire Model

Internal cost ( salaries, benefit, etc) External cost (travel, fees for outside

recruiters) Company visit expenses (candidate travel, ,

interview expenses ) Direct fees ( advertising, job fair) Time

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Think about a person you fire

Most stressful responsibilities anyone has in business

The person you fire will feel angry toward you

His college may turn against you His career and life will suffer

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ACDelco’s Experience

Get the best you can get They put the candidates through an aptitude

testing process After they pass the test, they create a focus

group where about 9 different managers interview the candidates

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Exxon experience

They look for individual who have a broad and deep background within their organization

The initial sales training during the first three years on the job provides solid sales fundamentals. Covers basic selling skills, negation skills, how to analyze a customer’s business.

After the first three years, advance training is giving such as understanding new market and helping clients reach their goals.

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Is Good Relationship enough!!!

The old days of visiting a client and going for lunch together and getting sale based on the relationship are no longer a reality.

Relationship Marketing works

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The Most Common Hiring Mistakes (1)

Relying on an interview to evaluate a Candidate

– The typical interview increase the likelihood of choosing the best candidate by less than 2%

– Why?• Candidate prepare very well

• Managers did not prepared for it

• Personal chemistry not potential success

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The Most Common Hiring Mistakes (2)

Using Successful people as a model– Duplicate success ?– The critical information is how top performers

are different from poor performers

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The Most Common Hiring Mistakes (3) Setting Too Many Criteria

– No more than 6-8 factors– narrow down your criteria to factors that

distinguish winners from failures

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The Most Common Hiring Mistakes (4) Evaluating Personality instead of Job Skills

– There is very little correlation between any personality factors and any specific job

– Example: is nice to know that a sales candidate has self-confidence and high energy, it is far more likely it is critical to know whether he can retain and pent rate existing customer or develop new ones.

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The Most Common Hiring Mistakes (5) Using Yourself as an Example

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The Most Common Hiring Mistakes(6) Not researching the reasons people have

failed in a job– Example:

• In most competitive sales situations, the average potential customer buys from a new salesperson only after six contact. The average failed salesperson gives up after three contact.

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The Most Common Hiring Mistakes (7)

Relying on General Good Guy Criteria

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The Most Common Hiring Mistakes (8)

Not Doing A Careful Background Reference Check– False information– 15 to 20% of applicants hide some dark

chapters of their lives– Who will twist the facts to get a job will

probably twist the rules on the job.

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Others Common Hiring Mistakes

Not knowing what you need Not knowing what to look for in the

resumes you received Talking too much in the interview

– You should not speak more than 25%

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Consequences of poor hiring decisions

Waste of time and money Poor performance Firing people

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Benefit of effective hiring practices

Your company becomes more competitive Efficiency improves Employees turnover decline Cost decrease Employees morals rises Training time and expenses are cut

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A good match: a suitable person for the job What does it mean to say, “ Ahmed is really

suitable for that job” and Obaid is not cut out for that job”– Is Ahmed a better person than Obaid? Of

course not– When we measure people against jobs we are

comparing the demand of the job with a person capabilities.

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To be affective at hiring you must think about

The demands and requirements of the job The person’s abilities

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Hiring and the Law

Employment tests– Tests should be relevant to the job

Discrimination (color, age, race) Careful background checks

– Company can be held liable if one of its employees goes on crime

Sexual harassment Ethnic harassment Saudization

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Pre-offer Planning

Thought should be given to the offer process before actual recruit contact begin.

To do this we need to:– The acceptable recruits should be ranked– How the offer (s) will be extended

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Ranking the Recruits

Two lists should be developed– a list of the recruits in the order of the firm’s

preference of them– The second list can be developed by the firm’s

interviewers, based on how interested the recruits seemed in joining the firm.

What about when the person the firm wants most is not interested? (shall we spend time)

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What will be included in the Offer

Compensation (type and amount) Employment package

– insurance, – retirement– vacation pay– educational benefit– Profit sharing– Company car– Relocation expenses

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How Will the Offer be Extended

Who will make the offer (top manager, Human resource, sale manger)

Most of job offers are initially made over the telephone – how much time will be allowed for acceptance

and what concessions will be made if the recruit want to negotiate some of the term of the deal.

A formal letter follows if offer is accepted (this letter needs carefully wording/ contract)

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Extending the Offer

Many small, but important, details must be anticipated in making the offer.– Review the job– ask for questions– determine interest (trail close) do you want the

job. If we made an offer will you accept it.– If he reject it accept it with grace– Keep good relations, it help

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Socialization

Is the process through which the new recruits take on the values and attitudes of the people who are already working for the firm.– Pre-employment socialization (publication,

visit)– Assimilation- when he accept the offer

• familiar with the environment and their job tasks

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Orientation Information

Booklet about company’s history, the executives, product line, health, recreational.

The paycheck The expense account Office practices Dining facilities What is going to happen next?

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Orientation Experience

Be part of the team Know the supporting staff Introduction to business Familiarization with firm’s operation Spend time in each of the firm’s functional

unit. Need for effective communication

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Meeting Social and Psychological Needs

People are social animals He should be socially integrated into new

environment Social need may be overrule their economic

need Leaving home, family, friend, strange in

new city, etc? Cultural diversity

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Mentoring New Employees

A mentor is someone with knowledge, experience, position, or power who provides personal counseling and career guidance for younger employee

Three types of mentoring programs– a senior manager is a assigned for each sales

rep– co-worker to be new reps’ adviser– informal process, a senior executive select a

younger sales rep and help him climb the ladder

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Employee Retention and Problem Solving (reduce employee turnover)

Know your employee– Emotional needs, career needs)

Recognize and reward (reward failure)

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Ways to hold on to employees

Good pay (Industry standard) Communication Employee review ( people want to know

how they are doing) Training Employee assistant Improved working condition Career path

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Common employee behavior problems

Attitude Attendance problem Anger

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The Value of Sales Training

The training program is a link in the process of converting the recruit into a productive sales rep

Training was ranked as second important factor in sale person success

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Important Factors for Ensuring a Sales Person’s Success Good/positive attitude Proper training Good work habits/hard work Motivation/self-motivation Knowledge (customer,market, competition,

product)

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Successful Training Programs Consist of Three Phases Training Assessment Program Design Evaluation

– in each of these phases sales executive must in each of these phases sales executive must make a number of decisionsmake a number of decisions

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Training Assessment

In this phase, sale executive must determine:– What are our training need?– What are the objectives of the training?– Who should be trained?– How much training is needed?

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Training Need

Start with sophisticated need analysis that include interviewing customers about their needs

Find weaknesses in selling skills and design a training program to eliminate them.

Sources to gather these information are many such as management and training department judgment

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Training Objectives

Increasing sales productivity Lower turnover (good people less to fail) Better moral Control Improved customer relations Lower selling cost Better use of time

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Who Should be Trained?

Newly hired sales reps Existing sales reps

– who struggling to achieve their objectives– when new products introduced, market shifts,

buyer change

Train people who are not the company’s employees: distribution, middleman representative, etc.

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How Much Training Is Needed?

Depends on the training objectives– half a day training may be enough introducing

sales rep to promotional program– 2-3 days for introducing him to new feature in

the product– Customer relations may needs 3-4 days– Teaching basic selling skills to inexperienced

recruits needs 3- 6 months

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Program Design

In the program design phase, the following question must be answered:– Who should do the training?– When should the training take place?– Where it should be done?– What should the content of the training be?– What teaching methods should be used?

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Who should do the training?

Three basic sources of trainers are:– regular line executive (senior sales

representative, field supervisor, territorial manager or sales managers).

– Staff trainers-can be hired to conduct training– Outside training specialist

Each one has advantages and disadvantages

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When Training Should Take Place Two basic attitude

– no one should be placed in the field who is not fully trained

– other attitude is the recruit should sell before investing in training in that person. This philosophy has merits that it is much easier to train people who have some field experience than those who have none.

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Where Training Should Take Place Decentralized Training

– Field sales office instruction– use of senior sales people– on-the-job tutoring– local sales schools– local sales seminar

Centralized Training– at central location/ it is very expensive

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Content Of Training

– Attitude toward selling– Knowledge about the company– Product knowledge and application– Knowledge of competitive products – Knowledge of customers– Time management skills– Legal constraints on selling– Selling skills

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Training Techniques

– Lectures- ineffective for teaching sales– Discussion– Demonstration– Role playing– Audio cassettes-when sales rep drive– Video-enhanced training– Computer-assisted training– Business TV- broadcast live via satellite– On-the-job training

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Training Evaluation

We must assess the effectiveness of our training programs, we must decide on:– what outcomes will be evaluated?– How will these outcomes be measured?

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Outcomes and Measures

Reactions-subjective manner Learning-how much information they get-

test before and after Behavior- whether the trainee’s behavior

has changed in substantial ways. Result-increased sales and productivity

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