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    Financial Incentives For Salesman

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    Ravin Mehta
    This document discusses compensation practices and trends for salespeople. It notes that while fixed salary alone was once common, incentives tied to sales volume and marketing objectives are increasingly important. It also finds that smaller companies tend to pay salespeople higher salaries since they are less established and need to borrow talent from competitors. The document advocates developing a compensation plan that considers the salesperson's expectations and the company's objectives and budget. It stresses that the plan should motivate the salesperson to be an effective territorial marketing manager who drives profits in line with marketing goals through full-line selling, missionary work, sales service, market intelligence feedback, and other activities.

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    Financial Incentives For Salesman

    Uploaded by

    Ravin Mehta
    70 views14 pages
    This document discusses compensation practices and trends for salespeople. It notes that while fixed salary alone was once common, incentives tied to sales volume and marketing objectives are increasingly important. It also finds that smaller companies tend to pay salespeople higher salaries since they are less established and need to borrow talent from competitors. The document advocates developing a compensation plan that considers the salesperson's expectations and the company's objectives and budget. It stresses that the plan should motivate the salesperson to be an effective territorial marketing manager who drives profits in line with marketing goals through full-line selling, missionary work, sales service, market intelligence feedback, and other activities.

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    Financial incentives for salesman

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    This document discusses compensation practices and trends for salespeople. It notes that while fixed salary alone was once common, incentives tied to sales volume and marketing objectives are increasingly important. It also finds that smaller companies tend to pay salespeople higher salaries since they are less established and need to borrow talent from competitors. The document advocates developing a compensation plan that considers the salesperson's expectations and the company's objectives and budget. It stresses that the plan should motivate the salesperson to be an effective territorial marketing manager who drives profits in line with marketing goals through full-line selling, missionary work, sales service, market intelligence feedback, and other activities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    70 views14 pages

    Financial Incentives For Salesman

    Uploaded by

    Ravin Mehta
    This document discusses compensation practices and trends for salespeople. It notes that while fixed salary alone was once common, incentives tied to sales volume and marketing objectives are increasingly important. It also finds that smaller companies tend to pay salespeople higher salaries since they are less established and need to borrow talent from competitors. The document advocates developing a compensation plan that considers the salesperson's expectations and the company's objectives and budget. It stresses that the plan should motivate the salesperson to be an effective territorial marketing manager who drives profits in line with marketing goals through full-line selling, missionary work, sales service, market intelligence feedback, and other activities.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 14

    M. S.

    PATEL FACULTY OF MANAGEMENT STUDIES,


    M. S. UNIVERSITY, BARODA

    ARCHAL SHAH (Roll No. 26)


    Objective & Trends
     Objective in most companies
    Attract
    Retain
    Motivate

     Major Trends
    Only Fixed Salary – Extinct Spices
    Incentive quotient – Increasing
    Incentive α (Sales Vol., Mktg. Obj.)
    Use of Incentive
     In 1967, 444 Mfg companies (across 20 ind.
    employing 16,263 employees) were surveyed
    Variation in Industry
     Heavy Ads | Sales Promotion
    Non-Technical => Less payment
    Ex Cigarette industry (USD 6500/yr)

     Custom Built | WOM (Little Ads)


    => Highly paid
    Ex Footwear mfg for retailer (USD 22,500/yr)

    Avg. Salary (as per survey) USD 12,100/yr


    Earning Correlation
     Company size α Salesman salary
    Small company >> High Salary
    (Ex In paper industry, as per survey
    Avg. Co. ($2m) >> $1000. Big ($80m) >> $ 790

     Reasons
    1. Less well known, less Ads, Less Repo
    2. No training, so borrow from competitor at
    higher wages
    Age Relationship

    Earnings

    Sales Volume

    Salesman Age
    Compensation Practices
     Overpayment Policy
    There are examples of salesman paid equivalent
    or more than sales executive or even MD

    Effects
    1. Impossible to persuade to leave field
    2. Sales manager will resent (Exec. Turnover)
    3. Largest element of selling cost
    Compensation Practices
     Underpayment policy

    Effects
    1. Buyer gets the quality, he pays for
    2. If good ppl, higher turnover
    3. Salesman gone to competitor means info gone
    4. Hidden cost of turnover
    5. Customer distraction
    Compensation Practices
     Average Approach
    Apt for company with large sales force

    Advantages
    1. Hire young men, train as per firm
    2. Unspoiled men

    Disadvantages
    1. More aggressive supervision
    2. Rules required
    Compensation Practices
     Above Average concept
    Apt for company with small sales team

    Advantages
    1. No extra trg cost
    2. Get info of competitors
    3. Highly motivated environment

    Disadvantages
    1. Long run above avg compensation
    2. Must have above avg sales
    Developing a plan
     Salesman expectation & company obj
     Gross amt company wants to and afford to pay
     Once hw much is decide, Decide hw much fixed
    and hw much variable
    Full fixed, Full variable & Combination
     Depends on
    1. Company objective
    2. Characteristics of selling job
    3. Sales support provided
    Ultimate Objective
     Today salesman is not mere order getter
     Salesman is territorial mktg manager
     OBJ max. co. profits inline mktg. manager
     Incentive plan should consider
    Full line selling
    Missionary work
    Sales service of accounts
    Feedback of imp mktg intelligence
    Cooperation with other co. personnel
    Control of selling expense
    Preparation of prompt & complete report & records
    Fundamental aims
     Motivate the salesman
    1. To plan ahead & max. effectivenes
    2. Do as per sales management
    3. Lower direct selling cost & more profits
    THANK YOU

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