B2B 5/e Chapter 11

Managing Personal Selling Function for Business Markets

Learning Objectives
LO1: Outline the role of personal selling in a B2B marketing context.
LO2: Understand distinctive characteristics of an industrial salesperson.
LO3: Discuss sales force organization and management
LO4: Explain key account management.
Role of Personal Selling
 As a problem-solving resource
• Help customer to define the buying problem
• Providing effective customer service
• Representing customer at the seller firm
 As a Part of communication mix
• Promoting the products
• Securing orders
• Relationship building
Classification of Sales Jobs in B2B Marketing

• Trade selling

• Missionary Selling

• Technical Selling

• Business Selling

A sales person in business marketing is required to fill any of the

above sales positions
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Design of a Sales Organization
Different
customer needs

Market Combination of
Oriented product/market
organization organization
Simple and Complex and/or
less number large number of
of products Product products
Geographical
Organization Organization

Similar
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customer needs
Sales Organizations

Types of Sales Organizations

• Geographic Organization
• Product Organization
• Market Oriented Organization
• Combination Organization

Major selection criteria

• Different or similar needs of customers
• Simple or complex products and product lines

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Management of Sales Force

Management / administration of the sales force

involves:
• Recruitment and selection of salespersons.
• Training of salespeople.
• Supervision and motivation of sales force.
• Compensation of sales force.
• Evaluation and control of salespersons.

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Management of Sales Force
Recruitment and selection of salespersons
After planning the needed number and type of
salespeople, recruitment starts by:
• Identifying prospective candidates, using
internal and external sources
• Evaluating and selecting effective sources of
recruitment

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Management of Sales Force

Recruitment and selection of sales persons

Tools or steps in selection process:
• Screening resumes
• Application bank
• Initial interview
• Intensive interview
• Testing
• Reference check
• Physical examination
Each company decides selection criteria - e.g. knowledgeable, having
high energy, reliable, helpful.

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Management of Sales Force :Training

• The training process has three phases:

• Assess training needs of: (1) newly hired sales

trainees, and (2) experienced / existing salespeople
• Design and execute sales training program using
‘ACMEE Method’: Aims, Content, Methods,
Execution& Evaluation

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Management of Sales Force: Training

Designing & Executing Sales Training Program

Aims / Objectives (vary from company to company)
• Prepare new sales trainees
• Increase sales, profits, or both
• Increase sales force productivity
Content of training program
Initial training for new sales trainees (broader training)
• Company, product, customer, competitor knowledge
• Selling skills or sales techniques
Continuing training for existing salespeople (specific training)
• Depending on training needs
• Examples: New product, negotiating skills

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Management of Sales Force :Training

Sales Training Methods :Grouped into five categories

• Class room / conference training: Lectures, group
discussions
• Behavioral learning: Case studies, role-playing
• Online training : Distance learning, interactive multimedia
• Absorption training: CD-ROM, audio cassettes, manuals,
books
• On the job training: Mentoring, job rotation

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Management of Sales Force :Training

Execution of Sales Training program

Decide
• Who will be the trainees and trainers?
• When and where the training will take place?
• What would be the budgeted expenditure?
Arranging internal / external trainers
Arranging conference hall, teaching aids, travel, etc.
Prepare time table, communication, etc.

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Management of Sales Force :Training

Evaluation of Sales Training Program

• Sales performance against targets before and after
training
• Written tests before and after the training
• Trainees evaluate training program
Reinforcement training methods
• Web – based or online training
• Refresher training and retraining

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Management of Sales Force :Supervision

Supervision is directing and controlling daily activities of salespeople

Responsibilities of sales supervisor /manager
• Communicating & implementing sales policies & strategies
• Counseling on deficiencies of salespeople
• Setting goals or targets
• Creating a favorable work environment & relationship
• Training and development of sales persons
Methods used for supervising salespeople
• Direct: Phone, e-mail, sales meeting, personal contact, coaching
• Indirect: Sales report, sales analysis, expense report, compensation plan

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Management of Sales Force :Motivation

Motivation is the effort the salesperson makes to complete required

activities of the job
Categories of motivational methods / tools : Financial &
Nonfinancial
Financial tools / methods:
(1) Salary (2) Commission (3) Bonus (4) Fringe benefits (5)
Combination (6) Sales contests.
Non- financial tools / methods:
(1) Promotion (2) Sense of accomplishment (3) Personal growth
opportunities (4) Recognition (5) Job security (6) Training (7)
Sales meetings (8) Job enrichment (9) Supervision.

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Management of Sales Force :Compensation

Purpose : Attract and motivate salespeople

Methods / plans of sales force compensation
• Straight salary
• Straight commission
• Combination plan
• Salary plus commission
• Salary plus bonus
• Salary plus commission plus bonus

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Management of Sales Force : Evaluation and Control

Purposes
• To decide salary increment, promotion, training needs
• To find strengths and weaknesses of employees
Procedure
• Set policies on performance evaluation and control
• Decide criteria for performance evaluation
• Establish performance standards / goals / targets
• Compare actual performance with standards
• Review performance evaluation with salespersons
• Decide sales management actions

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Deployment of Sales Force

It includes the following:

• Setting - up sales territories
• Determining size of the sales force
• Allocating salespeople to territories

 Setting-up or Designing Sales Territories - Steps involved are:

• Select a control unit
• Find location and potential of customers
• Use build – up method to decide basic territories

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Deployment of Sales Force :Allocating Sales
People to Territories
Determining Size of the Sales Force
• Workload method
• Sales potential or Break down method
• Incremental method
Criteria / factors considered for allocation
 Relative abilities of salespeople
• Based on product & market knowledge, past performance, selling and
communication skills
• Link salespeople abilities to territory potentials

 Effectiveness of salesperson in a territory

• Relate salesperson’s social & cultural characteristics with those of territory
customers
Key Account Management
A key account is an important customer and is also called a major
account, national account or strategic account.
Def: A customer of strategic importance
Characteristics of key accounts
• Have high potential for sales and profits
• Buy for one or several units of an organization
• Expect customized products and services, superior and coordinated
services, and special price.
Key Account Management
Key Account Selling Vs Traditional Selling
Parameter Traditional Selling Key-Account Selling
Sales volume Varies Large
What seller Core product Augmented product
offers
Time horizon Short-term Long-term
Customer Lower price, higher quality Lower total cost
benefits
Objective of Revenue maximization Become preferred supplier
sales force
Information Price and product attributes Strategic intentions and
shared long-term goals
Selling firm Individual sales person Personnel from multiple
interface functional areas
Buying firm Relatively fewer contacts in the buyer Many people from customer
interface firm firm interact with their
counter parts in selling firm.
Seller-Buyer Interactions
Bow-Tie(Traditional) Diamond(KAM)
Choosing Key Accounts

Three step method

1.Measurement of sales and profit potential
2.Identify , among those that qualify step1, customers that need
special support services
3. Consider to what extent the transactions with the potential
customer help improve the profitability of the company
Implementing KAM Programs
• Objective: The objective(s) of the KAM program should be stated in clear terms. For example, to
become the preferred or sole supplier to the key account
• The tasks involved to achieve the stated objective would be:
• Assign the responsibility of implementing the program to a key account manager
• The key account manager should have complete knowledge and understanding of the key account’s
business and the needs.
• He/she should identify a team of internal experts as well as outside experts, if needed, to deliver a
solution that matches the customer’s immediate and future needs.
• He/she adopts a strong relationship management approach with collaborative relationships at various
levels of selling and buying firms.
• The key account manager gets technical approval of the supplier firm’s products and services from the
key account, uses team selling approach in negotiations with key accounts, and gets orders.
• For the success of the KAM program, top or senior management’s involvement, commitment, and
support is important
Benefits and Risks of KAM
Benefits
• Increase in share of wallet
• Increased trust
• Enhanced loyalty and purchase intentions
• Greater likelihood that the buyer will recommend the supplier to other firms
Risks
• By allocating scarce resources to a few key customers, other customers may receive less
attention. This may lead to lower growth of the customer base.
• The service demands from key-accounts who source 100% of their requirements from
the preferred supplier pushes up the costs , making the returns for the supplier firm
less attractive.
End of PPt