Sales and Promotions

Management Session 13th

Dated: -30-05-2010By: -Neeraj Gupta

Training the Sales Persons: -Training varies with the sales person's career cycle Sales persons have varied backgrounds, experience levels, learning abilities, etc. and therefore have their own training needs. Another factor deciding the type of training is the stage of the career of the sales person.

Training during different career stages:- Preparation: -Orientation and training about

the environment, Selling instructions and basic selling techniques.

Development: -Main focus is on field coaching

Maturity:- Sales person emphasises on smart work rather than hard work, refresher training required to retrain and acquaint with new techniques

Decline: -Motivational training required

Aim of training

Identify initial training needs Job Specification Trainee's Background and Experience Sales-related Marketing Policies

Continuing sales training programmes

Methods of Training

The Lecture Advantages

It is more economical as compared to other methods. It is the only method to cover the desired training content if initial sales training is

brief. It is the only practical way to handle instructions when the training group is too

large but it can also provide training appropriately to smaller training groups through summary of major topics.

Disadvantages Teaching is emphasised more than learning. Only one-way communication between trainer and trainee prevails.

Personal Conference Demonstration Role Playing Case Discussion (Learning by doing) Gaming simulation

Methods of Training

On the job training (Coach-and-pupil method)

Programmed learning (Teaching by machine method)

Correspondence courses

Execution of training

Execution is the fourth step of the A-C-M-E-E approach of sales training. It involves the following four key decisions: Who will be the trainees? Who will be the trainers? When will the training take place? Where will the training site be?

Evaluation of Training Programmes Market share percentages Written Tests Observers which work with sales personnel

COMPENSATING THE SALES PERSONNEL

Requirements of a sales compensation plan Provides living wage in form of secured income Plan fits with rest of motivational programme Plan is fair Easy for sales personnel to understand Adjusts pay to changes to performance Economical to administer Helps attain sale objectives

Designing a compensation package Defining a Sales Job Consider the Company's General Compensation Structure

For this proper job evaluation needs to be done. There are four job evaluation methods:-

Non quantitative methods: - Simple ranking Classification or grading

Quantitative: - Point system Factor comparison method

Consider the Compensation Patterns in Community and Industry Determining Compensation Level Provide for the Various Compensation Elements Special Company Needs and Problems Consult the Present Sales Force Reduce Tentative Plan to Writing and Pre-test it Revise the Plan Implement the Plan and Provide for Follow up

TYPES OF COMPENSATION PLANS

Straight Salary Plan - Sales persons receive fixed sums at regular intervals

Straight Commission Plan – Payment according to productivity Sales persons paying own expenses Company pays expenses

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Determining Commission Base for Straight Commission Plan

Commissions based on sales volume Commissions based on collections Based upon

shipments, billings or payments ( if order cancellation is high)

Based on commissions or gross margin(to control price cutting by sales personnel)

Based on net profit(seeking control on price cutting, selling expenses and net profits)

…continued

Salary for Commission – Attempts to capture the advantages and offset the disadvantages of both the salary and commission systems.

Factors Influencing Compensation Scheme Relation with Product Life Cycle (PLC)

Introductory stage direct salary will be on the higher side and indirect benefits may not be introduced.

In the growth stage, Indirect incentive schemes have to be introduced.

In the maturity stage, the indirect benefits like training programmes in good environmental locales foreign trips, promotions, basic increase in salary are given.

In the decline stage, added incentives may be given to generate fresh interest in the product.

Compensation Related with Demographic Characteristics

Factors Influencing Compensation Scheme

Use of Bonus

FRINGE BENEFITS

Company benefits Insurance Paid vacations Paid leaves Retirement Plans Educational Assistance

Thank You