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Sales Force Management & Measurement
Sales ManagementPresented by : Faiza Hammad
Noman AmeenShah Rukh (12485)Sana Sadiq (12877)
Introduction
• Sales Force management is determinant of MARKETING SUCCESS
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Sales Force Management ELEMENTS
1. Integration
2. Resource Allocation
3. Rewards
4. Correct hiring & Training
Sales Territories: Sales person’s battleground
Level 2:• Balance potential sales each
territory contains
Level 1:• Minimize Travel expenses
• Minimize time associated with one
customer based in one specific geography
•
Sub titleTerritory Assignment
Under servicing & Over servicing Customers
Sub title
Under servicing
•Sales lost due to lack of activity
•Fewer lead sort
•Fewer prospects identified
•Sales person stretched too thin
Over servicing
•Lower sales directly & indirectly
•Direct result sales person calling too much unless the customer become alienated
• Indirect Result loss from sales in underserved category
Balanced & Unbalanced Territories
Unbalanced Territory Balanced Territory
Unfair sales potential Happier customer, sales person & company
Distorted compensation Potential
Main considerations are:
• Balancing work load
• Balancing Sales Potential
• Develop compact Territories
• Minimize disruptions during redesign
Talented people leave company
Work load
Sales Potential Parameters1. No. of potential accounts exist in a territory2. Served Market3. Size of Population in territory
4. Size Finding5. Time takes to travel a territory
Territory Changes Minimizing customer disruption is a priority with any change Sales people are very protective of territories and unwelcome changes Possible Complaints are:
Setting Sales Goals
Profit and sales objectives
Support product plans, channel and market plans
Motivate sales force for consistent efforts
SMART Strategy
Discuss with sales force how do they feel about the goals set
Forecasting Sales
Measuring Sales Result Effectiveness measures are driven by:
1.) Length of selling cycle2.) Complexity of buying process3.) No. of People involved in decision making
Effectiveness of a sales person is the key measure when analyzing performance
Important numbers to calculate effectiveness:1.)Amount of each sale & contribution from sale2.)No. of calls made3.)Total accounts active4.)Total Accounts in territory
Calculating Effectiveness
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Sales Resulting from calls to Customers
Sales-Force compensation
The incentive plan needs to align the salesperson’s activities with the firm’s objectives.
What form of compensation is appropriate for compensation task , to setting the metrics which performance will be based , to finding the level of bonus , salary or commission the financial targets of the firms .
Commission works based when sales effort can be linked directly to a sales .
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Rules of Compensation
Rule #1: Make the compensation plan easily understood so that the sales
person understands what behaviors are expected, what the sales objectives are, and what outcomes lead to financial reward.
Rule #2: Don’t play game , state the compensation plan and don’t change
it. Rule #3: Try to set metrics that are objective.
Rule #4: Think about non financial incentives such as recognition program.
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Designing Compensation plan
When designing a compensation plan for sales force , there are four key areas:
Level of pay:
Mix between salary and incentive: Measure of performance:
Performance-payout relationship:
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Calculating Total compensation
There are many ways to motivate the sales person, For a multi-bonus system the compensation for a sales person:
Compensation($) = Salary($) + Bonus 1 ($) + Bonus 2($)
In a compensation system , the following would represent the compensation for a salesperson:
Compensation($) = Salary($) + [Sales ($) * Commission(%)]
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Calculating Total compensation
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•Once the compensation plan for the sales force has been created , the sales-force manager may want to reevaluate the size of the sales-force. Based on forecast for sales in the coming year , there may be room to hire more sales people or need to cut back on the size of the force.
Sales Force Funnel:
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•A convenient way to forecast sales in the short term and also keep an eye on the sales-force activity is to create a sales funnel.
•The concept of funnel comes from simple principle: From large number of possible customers , only a much smaller number will actually make purchases.
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Thank you!