SALES FORCE



A company's sales force consists of its staff of salespeople. The role of the sales force depends to a large extent on whether a company is selling directly to consumers or to other businesses. In consumer sales, the sales force is typically concerned simply with taking and closing orders. Salespeople don't call on customers; the days of the door-to-door salesperson are long past. Salespeople don't create demand for the product, since demand for the product has already been created by advertising and promotion. They may provide the consumer with some product information, but individuals involved in consumer sales are often not concerned with maintaining long-term customer relationships. Examples of consumer sales forces include automobile salespersons and the sales staffs found in a variety of retail stores.

The sales force takes on a completely different role in business-to business sales. Industrial sales forces, for example, may be required to perform a variety of functions. These may include prospecting for new customers and qualifying leads, explaining who the company is and what its products can do, closing orders, negotiating prices, servicing accounts, gathering competitive and market information, and allocating products during times of shortages.

Within the business-to-business market, a distinction can be made between selling to retailers, industrial sales, and other types of business to-business sales and marketing. The concerns and activities of the sales force tend to vary in each type of business market. What they have in common, however, is the desire of the sales force to establish a long-term relationship with each of its customers and to provide service in a variety of ways.

In selling to retailers, for example, the sales force is not concerned with creating demand. Since consumer demand is more a function of advertising and promotion, the sales force is more concerned with obtaining shelf space in the retailer's store. The sales force may also attempt to obtain more promotion support from the retailer. The sales force relies on sophisticated marketing data to make a convincing presentation to the retailer in order to achieve its sales and marketing objectives.

The sales force may be organized around traditional geographic territories or around specific customers, markets, and products. An effective sales force consists of individuals who can relate well to decision makers and help them solve their problems. A sales manager or supervisor typically provides the sales force with guidance and discipline. Within the company the sales force may receive support in the form of specialized training, technical backup, inside sales staff, and product literature. Direct mail and other types of marketing efforts can be employed to provide the sales force with qualified leads.

The largest sales forces are involved in industrial selling. According to a survey published in the December 1998 issue of Sales and Marketing Management, however, the average company's sales force decreased by 26 percent from 166 people in 1996 to 123 in 1998. Reasons offered for the decline included an increase in mergers resulting in cutbacks in sales forces, more sales through technological advances such as Internet Web sites, and fewer customers accounting for a larger percentage of sales.

SALES FORCE AUTOMATION

Since the mid-1990s many companies have introduced sales force automation (SFA) programs. These programs provide mobile sales personnel with state of-the-art technologies, including laptop computers with CD-ROMs capable of making onsite product demonstrations. Some sales forces are able to use their laptop or palmtop computers for remote access to sales and other company data, electronic mail, and other functions. Sales forces that have adopted these technological advances are able to check order status, product information, and marketing plans quickly and efficiently from the field. Companies with successful SFA programs consider them an important factor in their sales growth.

SALES FORCE EFFICIENCY

Since the early 1970s, the cost of a single business-to-business industrial sales call has risen from less than $60 in 1971 to more than $250 at the end of the 1980s. Consequently, companies are very concerned about the efficiency of their sales force. Sales managers and supervisors can measure the efficiency of their sales force using several criteria. These include the average number of sales calls per salesperson per day, the average sales-call time per contact, the average revenue and cost per sales call, and the percentage of orders per 100 sales calls. The sales force can also be evaluated in terms of how many new customers were acquired and how many customers were lost during a specific period. The expense of a sales force can be measured by monitoring the sales-force-to-sales ratio, or sales-force cost as a percentage of total sales.

Using such criteria to evaluate the effectiveness of the sales force allows companies to make adjustments to improve its efficiency. If the sales force is calling on customers too often, for example, it may be possible to reduce the size of the sales force. If the sales force is servicing customers as well as selling to them, it may be possible to shift the service function to lower-paid personnel.

In industrial and other business-to-business sales, the sales force represents a key link between the manufacturer and the buyer. The sales force is often involved in selling technical applications and must work with several different contacts within a customer's organization. Industrial salespeople tend, on average, to be better educated than their consumer counterparts, and to be better paid. Their cost as a percentage of sales, however, is lower than in consumer sales, because industrial and business-to-business sales generally involve higher-ticket items or a larger volume of goods and services.

SALES FORCE COMPENSATION

The sales force may be compensated in one of three ways: straight salary, straight commission, or a combination of salary plus commission. From 1950 through 1990 more companies began using a combination of salary plus commission to compensate their sales forces, and fewer companies based their sales force compensation on straight commission. It appears that, as a percentage of all sales forces, the use of straight salaries remained constant. Whatever type of compensation system is used for the sales force, the important consideration is that the compensation adequately motivates the sales force to perform its best.

SEE ALSO : Sales Letter

[ David P. Bianco ]

FURTHER READING:

Campbell, Tricia. "Beating Sales Force Technophobia." Sales and Marketing Management, December 1998, 68-72.

Colt, Stocktoh B., ed. The Sales Compensation Handbook. 2nd ed. New York: AMACOM, 1998.

Donnolo, Mark A. "Expand Your Sales Force without Adding Headcount." Marketing News, 18 August 1997, 15-17.

Galea, Christine. "What Makes a Sales Force Great?" Sales and Marketing Management, October 1997, 70-71.

Garofalo, Gene. Fundamentals of Sales and Marketing Management. Paramus, NJ: Prentice Hall, 1998.

Ligos, Melinda. "The Incredible Shrinking Sales Force." Sales and Marketing Management, December 1998, 15.



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