Professional Documents
Culture Documents
To remove unrealistic assumption that geographical control units have similar characteristics.
Large cities have greater sales potential than states requiring lesser coverage time at lower expense.
Differences in coverage difficulty represent differences in workloads. Control units are taken away from difficult to cover territories and added to easily covered territories. Total workload in any territory must not exceed the MAXIMUM DESIRABLE WORKLOAD. Ultimately territories defined have varying amounts of sales potential and different-sized workloads. Optimum territorial arrangement is reached when incremental sales for marginal selling expense is equated in all territories.
In assigning sales personnel to territories, management seeks the most profitable alignment of SELLING EFFORT to SALES OPPORTUNITY.
The principle is to Assign each sales person to the particular territory where his/her relative contribution to profit is highest.
500,000
1.00
500,000
125,000
500,000
0.8
400,000
100,000
500,000
0.7
350,000
87,500
Total
1,500,00 0
1,250,00 0
312,500
Assignment of Sales Personnel to Territories containing Sales Potentials proportionate to Salespersons abilities
Territory Potential Sales Person assigned Ability Predicted Contributi Sales on (25 % of sales)
600,000
1.00
600,000
150,000
480,000
0.8
384,000
96,000
420,000
0.7
294,000
73,500
Total
1,500,00 0
1,278,00 0
319,500
1000,000
1.00
1,000,00 0 240,000
250,000
300,000
0.8
60,000
200,000
0.7
140,000
35,500
Total
1,500,000
1,380,00 0
345,000
Assignment of Sales Personnel to Territories containing Sales Potentials proportionate to Salespersons abilities
Territory Potential Sales Person assigned Ability Predicted Contributi Sales on (25 % of sales)
600,000
0.9
540,000
135,000
480,000
1.0
280,000
120,000
420,000
0.7
294,000
73,500
Total
1,500,00 0
1,314,00 0
328,500
Assignment of Sales Personnel ToTerritories where Ability Indexes vary with the Assignment.
MOTIVATION
Motivation is goal-directed behavior to achieve NEEDS lack of something that reaching a goal could satisfy DESIRES positive ardor or strength of feeling Aspects affecting quality of salespersons job and why additional motivation is necessary:
Inherent nature of Sales Job Succession of ups & downs Interaction with pleasant & courteous people on one extreme to unpleasant & rude people Working time as well as after-work hours away from home missing out on family life.
Salespersons boundary position & Role Conflicts Conflict of Identification Customer or Company? Advocacy Conflict Identifies with & advocates customers position to other groups in Company Conflict in interests of customer & company versus own interests of earning based on selling as much as possible.
Tendency towards Apathy Dealing with same customers in same territory over years leads to losing interest & enthusiasm Familiarity on both sides leads to incomplete use of effective techniques.
Maintaining a group identity Working alone most of the time team spirit is weak Participating in a cooperative endeavor requires motivation & working conditions to promote group feeling for achieving group performance standards.
Economical to administer
Helps to attain objectives of the sales organization.
Consider the Companys General Compensation Structure Use Job Evaluation systems to compare with different jobs Job Evaluation procedure is not scientific but judgment based Ranking / Ordering of jobs without considering individuals doing it Purpose to arrive at fair compensation relationship amongst jobs.
Contd
Contd
Factor Comparison Method
resembles
point system but uses a scheme of ranking & crosscomparisons. Generally evaluated in value terms. Job Evaluations are made whenever decisions are made about the relative worth of jobs sometimes informally Many sales executives feel sales personnel compensation levels should be based on the external demand & supply factors.
Most companies choose various combinations depending on their particular selling situation. Proportions of different elements vary most however split the fixed to variable elements on a 60:40 to 80:20 basis.
Consult present Sales Force Reduce tentative Plan to writing & pretest it Normally pre-testing is done mathematically usually computerized reworking on past year/s data. Revise the Plan Implement the Plan & provide for Follow-up Periodic checkups indicate needs if any for further adjustments / revisions.