Management

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Sales. Management. Shaping Future Sales Leaders. JOHN F. TANNER JR. ... GLOBAL SALES MANAGEMENT Going Global to Achieve Growth.
Sales

Management Shaping Future Sales Leaders JOHN F. TANNER JR. Baylor University

EARL D. HONEYCUTT JR. Elon University

ROBERT C. ERFFMEYER University of Wisconsin - Eau Claire

Pearson Education International

Contents

Preface xix Acknowledgments xxi About the Authors xxiv

PART ONE

Strategic Planning "xxvi

Chapter 1 Introduction to Sales Management 2 From Sales Rep to Sales Manager

4

Establishing the Parameters of the Firm's Strategy: The Mission Statement

5

The Strategy Hierarchy

5

What Markets Do We Serve with What Products?

7

What Types of Relationships Do We Form and with Whom? 8 •

GLOBAL SALES MANAGEMENT



SELF-ASSESSMENT LIBRARY 12

Going Global to Achieve Growth

What Level of Investment Will Be Required, and How Will We Allocate the Needed Resources? 10 What Are the Detailed Objectives and Action Plans?

Selling Approaches

12

The Selling Process

13

Prospecting

14

Pre-Approach Approach

11

14

14

Needs Identification Presentation

14

15

Handling Objections

16

Closing the Sale 16 Implementation/Follow-up

17

The Selling Process versus the Selling Approach Sales Leaders

17

The Sales Executive •

18

ETHICS IN SALES MANAGEMENT Culture 19

The Field Sales Manager Summary Key Terms

Maintaining NCR's Ethical Sales

20

21 21

Questions and Problems Role Play: T&G Supply

22 22



CASELET1.1

Killebrew Manufacturing



CASELET 1.2

Morton's Ice House

References

17

23

23

23 • IX

CONTENTS

Chapter 2

The Sales Function and Multi-Sales Channels The Sales Function

26

Selling in a Multi-Channel Environment M GLOBAL SALES MANAGEMENT

28

Outsourcing to India

To Outsource or Not to Outsource the Sales Function Types of Outsourced Salespeople Aligning the Organization Achieving Alignment

32

SELF-ASSESSMENT LIBRARY 35



ETHICS IN SALES MANAGEMENT

Key Terms

37

31

34



37

Questions and Problems

Stuck in AOHell

38

Sales Manager's Workshop: Promedia Technology (PMT)

39



CASELET 2.1

Hereford Promotions



CASELET 2.2

Marchetti Machines: One Big Happy Family

Reference

Chapter 3

36

38

Role Play: Mechanix Illustrated

PART TWO

29

30

30

Types of Company-Employed Salespeople

Summary

24

40

42

Sales Leadership

43

Leadership and the Sales Executive What Is Leadership?

44

46

Leading versus Managing

46

Understanding Leadership: An Historical Perspective

47

The Behavioral Approach: "This is How a Leader Behaves" B GLOBAL SALES MANAGEMENT Marketplace •

41

49

Identifying Leaders in a Global

50

SELF-ASSESSMENT LIBRARY 51

Situational Approaches "Assess the Situation, then Adjust Behavior to It"

52

Contemporary Perspectives of Leadership: "Motivate Your Followers Through Leadership"

53

Emerging Leadership Concepts: "Develop Your Followers" •

ETHICS IN SALES MANAGEMENT Motors 55

Leadership Challenges for the Sales Executive Summary Key Terms

58 58

Role Play: Jackson Kramer Clothiers

Chapter 4

56

57

Questions and Problems

58



CASELET 3.1

"I Never Thought About It"



CASELET 3.2

"Coach" Charlie Hustle

References

54

Ethical Leadership at Ken Vance

59

60

60

Ethics, the Law, and Sales Leadership Approaches to Ethics The Golden Rule 65

65

62

CONTENTS •

SELF-ASSESSMENT LIBRARY 66

The Conventionalist Approach 66 The Protestant Ethic 67 The Market Imperative

67

The Libertine Ethic 67 The Utilitarian Ethic

68

The Salesperson as a Boundary Spanner •

ETHICS IN SALES MANAGEMENT

Common Ethical Issues Facing Salespeople Creating an Ethical Sales Climate •

80

Key Terms

81

The Caux Round Table

Questions and Problems

79

81

Role Play: Magnum Performance

83



CASELET 4.1

Patman Paper Co.



CASELET 4.2

Callahan Car Parts

References

74

76

Laws for Sales Managers Summary

69

70

72

GLOBAL SALES MANAGEMENT

Sales-Related Laws

68

Done Right

83 84

84

PART THREE Analyzing Customers and Markets

87

Chapter 5 Business-to-Business (B2B) Sales and Customer Relationship Management 88 Understanding B2B Purchasing Decisions 90 The Buyer's Decision-Making Process 90 Organizational Buying Situations

90

Understanding the Buyer's Criteria

92

Buying Center, or Group, Purchases 92 Team Selling and Multi-Level Selling •

94

SELF-ASSESSMENT LIBRARY 95

B2B Customer Relationship Management •

TECHNOLOGY IN SALES MANAGEMENT a Firm's Sales Are Profitable 97

The Nature of B2B Relationships •

96 Technology Can Help Ensure

98

GLOBAL SALES MANAGEMENT Other Cultures 100

Customer Lifetime Value (CLV) Strategies

Forming Business Relationships in 100

The Stages of B2B Customer Relationship Management Maximizing the Buyer's Value

102

Risk and the Organizational Buyer Important Salesperson Behaviors

103 104

Why Business Relationships End 104 Summary

105

Key Terms

106

Questions and Problems

106

102

XI

XII

CONTENTS Role Play: Managing a Sales Team at Alamance Associates

107

Sales Manager's Workshop: Adjusting the Territory Sizes within a Sales District •

CASELET 5.1



CASELET 5.2 Choosing a CRM System for Burlington Mechanical Solutions 109

References

Managing Buying Dynamics at Hughes Aircraft

108

108

110

Chapter 6 Leveraging Information Technologies 112 Commonly Used Technology

114

Sales Management Software

115

Knowledge Management, Proposal Writing, and Pricing Software Sales Force Automation Systems

Customer Relationship Management Software •

115

116

GLOBAL SALES MANAGEMENT

118

Global Issues in Sales Technology

The Challenges of Implementing CRM and SFA Systems

119

124

O SELF-ASSESSMENT LIBRARY 125 Salesperson/Sales Manager Issues

125

Encouraging Salespeople to Use Technology Effectively •

ETHICS IN SALES MANAGEMENT Benefits of CRM Systems 127

Summary

125

Ensuring Salespeople Derive the

128

Key Terms

128

Questions and Problems

129

Role Play: Blackburg Technologies

129

Sales Manager's Workshop: Promedia Technology: Familiarizing Yourself with Aplicor

130



CASELET 6.1

Frisco Solutions



CASELET 6.2

Zeron Corporation

References

130

131

131

• •

PART FOUR Designing and Developing the Sales Force

133

Chapter 7 Designing and Organizing the Sales Force 134 How a Firm's Goals Affect the Design of Its Sales Force

136

Organizing the Members of the Firm's Sales Force

137

The Size of the Sales Force 137 Specialists versus Generalists

139

Geographical, Product, and Market Structures Key Account Structures •

140

143

GLOBAL SALES MANAGEMENT

Sales Structures in Global Markets

144

D SELF-ASSESSMENT LIBRARY 145 Telemarketing and Computerized Sales Structures •

GLOBAL SALES MANAGEMENT Home 147

146

Some Offshore Call Centers Go Back

Reporting Relationships within a Firm's Sales Force Span of Control

149

Adding Independent Sales Reps to the Sales Structure •

149

ETHICS IN SALES MANAGEMENT

Company Salesperson or Sales Agent?

150

Ethical Dilemmas with Partners 152

152

CONTENTS Summary

154

Key Terms

154

Questions and Problems

154

Role Play: Structuring the Sales Effort at Green River Software

155



CASELET 7.1

Jefferson Pilot Reorganizes Its Sales Force



CASELET 7.2

IMC Considers Offshoring Its Call Center

References

156 157

157

Appendix 7A Computing the Point When It Is Time To Switch From a Company Salesperson To a Sales Agent 159

Chapter 8

Recruiting and Selecting the Right Salespeople Successful Hiring Requires Sales Managers to Follow a Process Planning to Hire

162

Calculating the Turnover Rate Conducting a Job Analysis

163

164

Writing a Job Description

165

Finding and Recruiting Applicants Recruiting Internal Applicants External Applicants •

166

166

167

ETHICS IN SALES MANAGEMENT When Should a Sales Manager Raid Her Competitors'Sales Force? 167

Selection Procedures Application Forms •

160

162

170

171

SELF-ASSESSMENT LIBRARY 173

The Personal Interview

174

Background Verification

177

Physical Exam 177 Making the Job Offer

177

Transitioning New Hires

178



Why a Diverse Sales Force Is Important Avoiding Common Hiring Mistakes •

179

180

GLOBAL SALES MANAGEMENT Your Company Abroad? 181

Who Should You Hire to Represent

Evaluating the Success of the Firm's Sales Force Recruiting and Selection Efforts 182 Summary Key Terms

183 183

Questions and Problems

183

Role Play: WRT Plans for Salesperson Interviews •

CASELET 8.1

Southeastern Industrial



CASELET 8.2

Harmony International

References

Chapter 9

184 185 185

186

Training and Developing the Sales Force How Important Is Sales Training? The Training Process

188

190

193

Identifying the Firm's Sales Training Needs 193 •

GLOBAL SALES MANAGEMENT Sales Force 196

The Challenges of Training a Global

XIII

XIV

CONTENTS D SELF-ASSESSMENT LIBRARY 198 Designing and Developing the Sales Training Program •

ETHICS IN SALES MANAGEMENT

198

Can You Teach Sales Ethics?

199

Delivering the Training 205 Assessing the Firm's Training Efforts

206

Completing the Sales Training Cycle 208 Summary

210

Key Terms

211

Questions and Problems

211

Role Play: Home Fire Lights

211

Sales Manager's Workshop: Identifying Training Needs CASELET 9.1

Justifying the Cost of a Firm's Sales Training



CASELET 9.2

Good, Good Enough, or Not Good Enough?

References

PART FIVE

212



212 213

214

Process Management

217

Chapter 10 Supervising, Managing, and Leading Salespeople Individually and in Teams 218 Supervising Managing

220 221

Sources of Power 222 •

ETHICS IN SALES MANAGEMENT Bad Leader? 224

What Are the Traits of a

The Up-Close Perspective: Becoming the Boss 225 The Sales Representative's Perspective: What It Takes to Be a Good Sales Manager Leading

226 227

A New School of Managerial Thought?

227

What Leadership Competencies Do Sales Managers Need?

229

Coaching 229 Mentoring

230

The Ability to Organize and Work Effectively with Teams 231 D SELF-ASSESSMENT LIBRARY 231 Being a Team Member

232

The Future of Sales Management •

233

GLOBAL SALES MANAGEMENT

Summary

Questions and Problems Key Terms

Developing Global Leaders

233

234 235

235

Role Play: Outside Escapes

236



CASELET 10.1

Friend or Mentor? Deciding When to Take Action



CASELET 10.2

Teamwork?

References

237

238

Chapter 11 Setting Goals and Managing the Sales Force's Performance 240 Why Are Sales Goals Important to an Organization?

242

236

CONTENTS Using Goals to Guide and Manage the Performance of a Firm's Sales Force 243 •

GLOBAL SALES MANAGEMENT

Goals Are Goals, Right? Not Quite.

Different Types of Goals or Quotas

244

244

Choosing the Right Metrics to Track

248

Choosing the Right Time Period to Track

248

D SELF-ASSESSMENT LIBRARY 248 What About Almost Meeting a Goal?

249

Should Salespeople be Involved in Setting Their Own Goals? When is a Sale a Sale?

249

249

Should Everyone Achieve Their Sales Goals? Do Goals Ever Get Changed or Altered?

250

250

What Happens When Salespeople Do Not Achieve Their Sales Goals? The Process of Setting Good Goals •

ETHICS IN SALES MANAGEMENT Too Difficult? 252

Summary Key Terms

251

251 When Do Difficult Goals Become

253 254

Questions and Problems

254

Role Play: Oval Track Promotions

255

Sales Manager's Workshop: Setting Threshold, Actual, and Stretch Goals •

CASELET 11.1

All in a Day's Work



CASELET 11.2

Sandwiched In

References

Chapter 12

256

256

257

257

Motivating and Rewarding Salespeople What Motivates Salespeople?

260

262

D SELF-ASSESSMENT LIBRARY 263 Generational Motivational Issues Matures

264

266

Baby Boomers 266 Generation X'ers Millennial

266

268

The Dos and Don'ts of Motivating Your Sales Representatives Financial and Nonfinancial Rewards •

GLOBAL SALES MANAGEMENT Right?" 270

269 "We're All In It for the Money,

The Components of a Reward Program Compensation •

268

270

272

ETHICS IN SALES MANAGEMENT What Do You Do If Your Company's Compensation System Encourages Unethical Behavior? 276

Benefits

279

Work-Life Rewards

279

Recognition Programs Expense Accounts

280

282

Personal Development and Career Opportunities Summary Key Terms

283 284

282

XV

XVI

CONTENTS Questions and Problems Role Play: BiolDs •

CASELET 12.1 Adjusting Your Compensation Plan to Motivate Your Sales Representatives 287



CASELET 12.2 Which Is Better? A Market Share-Based Incentive System or a Revenue-Based Incentive System? 288

References

PART SIX

285

286

289

Measurement, Analysis, and Knowledge Management 291

Chapter 13 Turning Customer Information Into Sales Knowledge 292 Knowledge Generated by the Firm's Sales Force Sales Forecasting

Estimating Market Potential •

299

ETHICS IN SALES MANAGEMENT

Forecasting Methods

306



SELF-ASSESSMENT LIBRARY 306



GLOBAL SALES MANAGEMENT

Guidelines for Forecasting Key Terms

300

301

The Limitations of Forecasting

Summary

Forecasting or Fortune Telling?

307

308

309 310

Questions and Problems

310

Sales Manager's Workshop: Making Forecasts

Chapter 14

294

297

311



CASELET 13.1

Englander Container



CASELET 13.2

Freud Testing Services

312 313

Assessing the Performance of the Sales Force and the People Who Comprise It 314 Evaluation Helps the Sales Manager Know What Is Working and Why 316 Evaluating the Performance of the Sales Force as a Whole Sales Analysis

317

317

Cost Analysis

319

Profit Analysis

321

Ratio Measures for Evaluating the Sales Force 321 Relating the Performance of the Sales Force to the Firm's Salespeople Evaluating Individual Sales Representatives

Leveraging Technology to Manage Sales Rep Performance Input Measures

324

328

Outcome Measures Profitability Measures

329 330

Ratio Measures for Performance Appraisals The Four-Factor Model of Evaluation Qualitative Performance Measures •

323

323

331

333 333

GLOBAL SALES MANAGEMENT Overseas 335

Evaluating Salespeople Working

CONTENTS The Problem of Evaluation Bias 336 Informal Evaluations

336

Reducing Sales Management Errors in Performance Evaluations

337

D SELF-ASSESSMENT LIBRARY 337 What Happens When Salespeople Don't Achieve Their Sales Goals? Developing and Reallocating Salespeople's Skills and Efforts

338

338

Modifying the Performance Setting 338 Summary Key Terms

339 339

Questions and Problems

340

Role Play: Johnson Controls Considers Changing Its Assessment Criteria 340 Sales Manager's Workshop: Promedia Technology (PMT) Analyzing the Performance of Your Sales Representatives 341 •

CASELET 14.1 Goals? 341

"Happy Hannah": Did the Sales Reps Meet Their



CASELET 14.2

Ligon Industrial

References

Chapter 15

342

343

Internal and External Cultural Forces That Affect a Firm's Sales Performance 344 How the Corporate Culture of a Firm Affects Its Sales Force

346

The Firm's Marketplace Orientation

346

Low- versus High-Performance Cultures Achieving Internal Alignment Misalignment and Entropy •

348

349

350

ETHICS IN SALES MANAGEMENT

Sales Managers as Culture Creators

What Constitutes a Bribe?

351

How External Cultures Affect a Firm's Sales Force , 353 The Different Levels of Culture The Components of Culture Communication Style Religion

353 355

355

357

Educational Levels Aesthetics

Social Organizations Technology

357

357 358

358

Time 358 Values and Norms

359

Managing the Global Sales Force

360

Designing the Global Sales Force 360 Selecting Sales Personnel 361 D SELF-ASSESSMENT LIBRARY 361 Training Global Salespeople

362

Motivating Global Sales Personnel

362

Compensating Global Sales Personnel

363

Evaluating Global Sales Personnel 363 Changing Demographics and Diversity in the Sales Force The Benefits of Embracing Diversity

364

363

351

XVII

XVIII

CONTENTS Summary

365

Key Terms

366

Questions and Problems

366

Role Play: Expatriate Pay and Benefits at RPG, Inc. CASELET 15.1

Long Island Manufacturing



CASELET 15.2

China Enterprises N.A.

References

PART SEVEN

367



368

368

369

Cases 373

Case Study 1

The Plantation Planning, Setting Goals, and Team Selling 374

Case Study 2

Lexington Industries Conducting Business Ethically in the Pacific Rim 380

Case Study 3

The San Francisco Giants A CRM Case Analysis 382

Case Study 4

TIP Financial Services Corporation Managing a Field Sales Force 386

Case Study 5

Wellco Distributors Considering a Diversity Program 391

Case Study 6

Pacific Medical Supply Company Hiring, Motivating, and Retaining Good Salespeople 394

Case Study 7

Southeastern Sales Associations Evaluating and Coaching Salespeople to Improve Their Performance 399

Case Study 8

Afgar Corporation Managing Multi-channel Sales 401

Case Study 9

Freedom Telecom Setting New Sales Goals to Turn the Sales Force Around 406

Case Study 10

The Sarasota Journal Inevitable Change and the Restructuring of the Sales Force 412

Case Study 11

Concord and Associates Evaluating a Sales Territory 417

Case Study 12

Cannon Associates Achieving Internal Alignment among Your Old and New Sales Force 421

Name Index

424

Subject Index 427