American companies spend more than $50 billionAmerican companies spend more than $50 billion –milyar--–milyar--annually on...
TTop 10 training organizations as determined byop 10 training organizations as determined by““Training magazineTraining ma...
National sales manager wantsNational sales manager wants to develop closeto develop closerelationships with customers.Sale...
Market managers are interested in how much training salesMarket managers are interested in how much training salesrep.rep....
Product managers, hope the salespeople have been well schooled inProduct managers, hope the salespeople have been well sch...
When determining sales training needs, three issues mustWhen determining sales training needs, three issues mustbe conside...
WWho should be trained?ho should be trained?Sales Training: Objectives, Techniques, and EvaluationNew One Old OneNew One O...
Why?Why?OBJECTIVES OF SALES TRAINING• Increase productivity• Improve morale• Lower turnover• Improve customerrelations• Im...
Increase productivityIncrease productivityOBJECTIVES OF SALES TRAINING
Improve moraleImprove moraleOBJECTIVES OF SALES TRAINING
Lower turnoverLower turnoverOBJECTIVES OF SALES TRAINING
Improve customer relationsImprove customer relationsOBJECTIVES OF SALES TRAINING
Improve selling skillsImprove selling skillsOBJECTIVES OF SALES TRAINING
ObstaclesObstacles (Engel)(Engel) to Introducing Trainingto Introducing TrainingTHE DEVELOPMENT OF SALES TRAINING PROGRAMS...
management expects sales training to solve all themanagement expects sales training to solve all thecompany’s sales proble...
If the sales problems are not resolved, budget-cutting activities oftenIf the sales problems are not resolved, budget-cutt...
1 . S1 . Sales training analysisales training analysisCreating Credibility in Sales TrainingOne way to do this is to trave...
2 . Determine Objectives2 . Determine ObjectivesCreating Credibility in Sales TrainingThe objectives may include learning ...
3 . Develop and Implement Program3 . Develop and Implement ProgramCreating Credibility in Sales TrainingAt this point, a d...
4 . Evaluate and Review Program4 . Evaluate and Review ProgramCreating Credibility in Sales Training• What do we want to m...
TRAINING NEW SALES RECRUITSTRAINING NEW SALES RECRUITSSALES TRAINING• Companies with less than $5 million in annual sales ...
TRAINING EXPERIENCED SALES PERSONNELTRAINING EXPERIENCED SALES PERSONNELSALES TRAINING• Experienced sales reps are given, ...
SALES TRAINING TOPICSSALES TRAINING TOPICS• Product or service knowledge• Market/Industry orientation• Company orientation...
Product or service knowledgeProduct or service knowledgeSALES TRAINING TOPICS• Critical information for rationaldecision-m...
Market/Industry orientationMarket/Industry orientationSALES TRAINING TOPICS• Industry fit into overalleconomy• Knowledge o...
Company orientationCompany orientationSALES TRAINING TOPICS• Company polices that affecttheir selling activities– Personne...
Time and territory managementTime and territory managementSALES TRAINING TOPICS• Sales trainees need to learn tomanage tim...
Legal and ethical issuesLegal and ethical issuesSALES TRAINING TOPICS• Federal law dictates corporate action oravoidance o...
TechnologyTechnologySALES TRAINING TOPICS• Notebook computers– Presentations– Connecting to company intranet or extranet– ...
Specialized topicsSpecialized topicsSALES TRAINING TOPICS• Specialized, job-tailored trainingmost effective• Sample topics...
Specialized topicsSpecialized topicsSALES TRAINING TOPICS• Price and objections video:
Common Instraction MethodsCommon Instraction MethodsSALES TRAINING TOPICS
Creative Sales TrainingCreative Sales Training• Effective training can take place beyond theclassroom or computer• Require...
Keys for Effective OJTKeys for Effective OJT• Teaming - bring togetherpeople with different skills• Meetings - set aside t...
Classroom TrainingClassroom Training• Advantages– Standard briefings in• Product knowledge• Company polices• Customer and ...
Electronic Training MethodsElectronic Training Methods• Online training > $18billion industry (2009)• IBM plans 35% sales ...
Measuring the Costs and BenefitsMeasuring the Costs and Benefits• Sales training consumes large time, budgetand support re...
Training Road BlocksTraining Road Blocks• Busy, tired salespeople are notopen to learning new skills• Conflicting methods ...
Sales Training CostsSales Training Costs• Training funds are often allocated with little regardfor results• Results and be...
Measuring Broad BenefitsMeasuring Broad Benefits• Improved morale• Lower turnover• Higher customer satisfaction• Measuring...
• Salary – a fixed sum of money paid at regular intervals• Incentive Payments (TEŞVİKLER)– Commission – a payment based on...
Components and objectives of FinancialComponents and objectives of Financialcompensation Planscompensation Plans
Compensation Methods for SalespeopleCompensation Methods for SalespeopleNo incentiveRequires closesupervisionSellingexpens...
Little securityLittle controlover repsReps mayprovideinadequateservice tosmalleraccountsSelling costsless predictableMaxim...
Sellingexpenses areless predictableMay be difficultto administerSome securitySome incentiveSellingexpenses varywith revenu...
Combination PlansCombination Plans• Offer a base salary plus some proportion ofincentive pay• Most popular form of compens...
Combination PlansCombination PlansWhen the salesperson’s selling skill is the key to sales success,the incentive portion o...
Design Questions for Combination PlansDesign Questions for Combination Plans• Appropriate size of incentive relative to ba...
Sales ContestsSales Contests• Short-term incentive programs to accomplishspecific objectives• Winners receive prizes, reco...
Structuring Effective Sales ContestsStructuring Effective Sales Contests• Prize structure :Contestrewards can take theform...
Criticisms of Sales ContestsCriticisms of Sales Contests• Salespeople may borrow sales from anotherperiod to increase sale...
Nonfinancial RewardsNonfinancial Rewards• Recognition makespeers and superiorsaware of outstandingperformance• Effective r...
Expense AccountsExpense Accounts• Types– Direct reimbursementGERİÖDEME – of all“allowable and reasonable” expenses– Limite...
Rewarding A While Hoping for B?Rewarding A While Hoping for B?• Straight commission may work for transactionalselling, but...
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Sales Training, Compensation

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Sales Training, Compensation

  1. 1. American companies spend more than $50 billionAmerican companies spend more than $50 billion –milyar--–milyar--annually on training.annually on training.Sales Training: Objectives, Techniques, and Evaluation
  2. 2. TTop 10 training organizations as determined byop 10 training organizations as determined by““Training magazineTraining magazine””..Sales Training: Objectives, Techniques, and Evaluation
  3. 3. National sales manager wantsNational sales manager wants to develop closeto develop closerelationships with customers.Sales Training: Objectives, Techniques, and Evaluation
  4. 4. Market managers are interested in how much training salesMarket managers are interested in how much training salesrep.rep. receive in dealing with the complex customer problemsreceive in dealing with the complex customer problemsSales Training: Objectives, Techniques, and Evaluation
  5. 5. Product managers, hope the salespeople have been well schooled inProduct managers, hope the salespeople have been well schooled inproduct knowledge, specifications, and applications.product knowledge, specifications, and applications.Sales Training: Objectives, Techniques, and Evaluation
  6. 6. When determining sales training needs, three issues mustWhen determining sales training needs, three issues mustbe considered:be considered:Sales Training: Objectives, Techniques, and Evaluation1. W1. Who should be trained?ho should be trained?2.2. What should be the trainingWhat should be the trainingprimary emphasis?primary emphasis?3.3. How should the trainingHow should the trainingprocess be structured?process be structured?On-the-job training andOn-the-job training andexperience?experience?Formal and more consistentFormal and more consistentcentralized program?centralized program?Web-based?Web-based?Instructor-based?Instructor-based?
  7. 7. WWho should be trained?ho should be trained?Sales Training: Objectives, Techniques, and EvaluationNew One Old OneNew One Old One
  8. 8. Why?Why?OBJECTIVES OF SALES TRAINING• Increase productivity• Improve morale• Lower turnover• Improve customerrelations• Improve selling skills
  9. 9. Increase productivityIncrease productivityOBJECTIVES OF SALES TRAINING
  10. 10. Improve moraleImprove moraleOBJECTIVES OF SALES TRAINING
  11. 11. Lower turnoverLower turnoverOBJECTIVES OF SALES TRAINING
  12. 12. Improve customer relationsImprove customer relationsOBJECTIVES OF SALES TRAINING
  13. 13. Improve selling skillsImprove selling skillsOBJECTIVES OF SALES TRAINING
  14. 14. ObstaclesObstacles (Engel)(Engel) to Introducing Trainingto Introducing TrainingTHE DEVELOPMENT OF SALES TRAINING PROGRAMS• Top management not dedicated to salestraining• Lack of buy-in from frontline salesmanagers and salespeople• Salespeople’s lack of understanding of whattraining is supposed to accomplish• Salespeople’s lack of understandingregarding application of training toeveryday tasks
  15. 15. management expects sales training to solve all themanagement expects sales training to solve all thecompany’s sales problemscompany’s sales problems when, in fact, the problem withwhen, in fact, the problem withsales might not even be connected with the sales force (for example,sales might not even be connected with the sales force (for example,poor product quality or an inefficient supply chain that is unable topoor product quality or an inefficient supply chain that is unable todeliver products on time)deliver products on time)THE DEVELOPMENT OF SALES TRAINING PROGRAMS
  16. 16. If the sales problems are not resolved, budget-cutting activities oftenIf the sales problems are not resolved, budget-cutting activities oftenstart with the sales training programstart with the sales training program..THE DEVELOPMENT OF SALES TRAINING PROGRAMS
  17. 17. 1 . S1 . Sales training analysisales training analysisCreating Credibility in Sales TrainingOne way to do this is to travel with sales reps, observeand ask them what they need to know to perform theirjobs more effectively. “Field sales managers”
  18. 18. 2 . Determine Objectives2 . Determine ObjectivesCreating Credibility in Sales TrainingThe objectives may include learning about new products,sales techniques, or company procedures. Keep it sample.
  19. 19. 3 . Develop and Implement Program3 . Develop and Implement ProgramCreating Credibility in Sales TrainingAt this point, a decision has to be made concerning developing the training program orhiring an outside organization to conduct it
  20. 20. 4 . Evaluate and Review Program4 . Evaluate and Review ProgramCreating Credibility in Sales Training• What do we want to measure?• When do we want to measure?• How do we do it? What measuring tools are available?This is why field sales managersare an important link:They can provide follow-up and feedback information onthesalesperson’s ability to retain and use sales training takeaways in the field. Thefield sales managers can also coach the salesperson if there is a need forfollow-up.
  21. 21. TRAINING NEW SALES RECRUITSTRAINING NEW SALES RECRUITSSALES TRAINING• Companies with less than $5 million in annual sales arespending more on sales training per new hire - $5,500worth of training per salesperson.• Training in smaller companies has increased from 3.3months to 4.4 months.• Smaller companies are placing more emphasis on trainingthan several years ago.• Companies are spending time and money on trainingexperienced salespeople• Companies with more than $5 million in annual sales, arespending less money on training
  22. 22. TRAINING EXPERIENCED SALES PERSONNELTRAINING EXPERIENCED SALES PERSONNELSALES TRAINING• Experienced sales reps are given, on average,32.5 hours of ongoing training per year at a costof $4,032 per rep• Continuing increasing amounts of trainingreflects a commitment to provide ongoinglearning opportunities for senior salespeople• Companies are spending an increasing amountof time on product training and less on trainingin selling skills
  23. 23. SALES TRAINING TOPICSSALES TRAINING TOPICS• Product or service knowledge• Market/Industry orientation• Company orientation• Selling skills• Time and territory management• Legal and ethical issues• Technology• Specialized topics
  24. 24. Product or service knowledgeProduct or service knowledgeSALES TRAINING TOPICS• Critical information for rationaldecision-making– Company’s product specifications– Common product uses/misuses• Competitive productscomparison on– Price– Construction– Performance– Compatibility• Technical products require moretime on product knowledgetraining
  25. 25. Market/Industry orientationMarket/Industry orientationSALES TRAINING TOPICS• Industry fit into overalleconomy• Knowledge of industry andeconomy• Economic fluctuations thataffect buying behavior andrequire adaptive sellingtechniques• Customers buying policies,patterns and preferences inlight of competition• Customers customers needs• Wholesaler and retailer needs
  26. 26. Company orientationCompany orientationSALES TRAINING TOPICS• Company polices that affecttheir selling activities– Personnel– Structure– Benefits• Handling customer requestsfor price adjustments,product modifications, fasterdelivery, different creditterms• Sales manuals– Hard copy, online– Product information– Company policy information
  27. 27. Time and territory managementTime and territory managementSALES TRAINING TOPICS• Sales trainees need to learn tomanage time and territories• Time spent training out of the field iscostly• 80/20 rule applies:– 20% of the customers account for– 80% of the business and– Require the same proportion of time andattention
  28. 28. Legal and ethical issuesLegal and ethical issuesSALES TRAINING TOPICS• Federal law dictates corporate action oravoidance of action in areas of marketing,sales and pricing• Sales personnel need to understand thefederal, state and local laws that constraintheir selling activities• Statements made by salespeople carry bothlegal and ethical implications
  29. 29. TechnologyTechnologySALES TRAINING TOPICS• Notebook computers– Presentations– Connecting to company intranet or extranet– Delivering documentation quickly and accurately• Home offices eliminate the need to go to anotheroffice• Salesperson can be almost totally self-sufficientwith– High-speed network connection– Computer– Printer– Cell phone• Effective computer use affords sales personnelmore face-to-face customer contact time• Effective use requires training
  30. 30. Specialized topicsSpecialized topicsSALES TRAINING TOPICS• Specialized, job-tailored trainingmost effective• Sample topics;– Price negotiations– Trade show effectiveness– Reading body language
  31. 31. Specialized topicsSpecialized topicsSALES TRAINING TOPICS• Price and objections video:
  32. 32. Common Instraction MethodsCommon Instraction MethodsSALES TRAINING TOPICS
  33. 33. Creative Sales TrainingCreative Sales Training• Effective training can take place beyond theclassroom or computer• Requirements– Focus on knowledge, selling skills for success• Examples– Boot camps– Cooking classes
  34. 34. Keys for Effective OJTKeys for Effective OJT• Teaming - bring togetherpeople with different skills• Meetings - set aside times whenemployees can get together• Customer interaction - includecustomer feedback as part oflearning process• Mentoring - provide informalmechanism for new salespeopleto learn from more experiencedones• Peer-to-peer communication -create opportunities for mutuallearning among salespeopleOn-the-Job Training“learning by doing”
  35. 35. Classroom TrainingClassroom Training• Advantages– Standard briefings in• Product knowledge• Company polices• Customer and market characteristics• Selling skills– Formal training sessions save executive time• Disadvantages– Expensive– Time-consuming– Too much material = less retention• Role playing a populartechnique
  36. 36. Electronic Training MethodsElectronic Training Methods• Online training > $18billion industry (2009)• IBM plans 35% sales training to be over Internet• CD-ROM currently #1 delivery method• 30% of server-based training over intranets• Effectiveness not well-documented• Not likely to eliminate one-on-one training
  37. 37. Measuring the Costs and BenefitsMeasuring the Costs and Benefits• Sales training consumes large time, budgetand support resources• Relationship between sales training andrevenue is difficult to measure• Relationship between sales training andother broad objectives difficult to measure
  38. 38. Training Road BlocksTraining Road Blocks• Busy, tired salespeople are notopen to learning new skills• Conflicting methods andphilosophies are taught ateach session• The training isn’t relevant tothe company’s pressing needs• The training format doesn’t fitthe need• E-learning is overused, or usedin wrong situations• There’s no follow-up aftertraining
  39. 39. Sales Training CostsSales Training Costs• Training funds are often allocated with little regardfor results• Results and benefits are difficult to measure• Difficult to isolate training impact from– Economic conditions– Environmental changes– Seasonal trends– Competitive activity– Etc.
  40. 40. Measuring Broad BenefitsMeasuring Broad Benefits• Improved morale• Lower turnover• Higher customer satisfaction• Measuring changes in skills, reactions and learningassists both new and experienced sales personnel
  41. 41. • Salary – a fixed sum of money paid at regular intervals• Incentive Payments (TEŞVİKLER)– Commission – a payment based on short-term results, usually a dollar or unitsales volume– Bonus – a payment made at management’s discretion for achieving orsurpassing some set level of performance• Quota - often the minimum requirement for a salesperson to earn abonus• Sales contests – encourage extra effort aimed at specific short-termobjectives• Benefits - medical and disability insurance, life insurance, retirementplan• Non-financial incentives - opportunities for promotion or various typesof recognition for performanceSalesperson Compensation and IncentivesSalesperson Compensation and Incentives
  42. 42. Components and objectives of FinancialComponents and objectives of Financialcompensation Planscompensation Plans
  43. 43. Compensation Methods for SalespeopleCompensation Methods for SalespeopleNo incentiveRequires closesupervisionSellingexpensesremain sameduring salesdeclinesMaximumsecurityControl overrepsEasy toadministerPredictableexpensesNew sales repsNew salesterritoriesMany requirednonsellingactivitiesStraight SalaryDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethodNo incentiveRequires closesupervisionSellingexpensesremain sameduring salesdeclinesMaximumsecurityControl overrepsEasy toadministerPredictableexpensesNew sales repsNew salesterritoriesMany requirednonsellingactivitiesStraight SalaryDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethod
  44. 44. Little securityLittle controlover repsReps mayprovideinadequateservice tosmalleraccountsSelling costsless predictableMaximumincentiveManagers canencourage salesof certain itemsSellingexpenses relatedirectly to sellingresourcesHighlyaggressivesellingMinimal requirednonselling tasksWhen companycan’t closelycontrol salesforceStraightCommissionDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethodLittle securityLittle controlover repsReps mayprovideinadequateservice tosmalleraccountsSelling costsless predictableMaximumincentiveManagers canencourage salesof certain itemsSellingexpenses relatedirectly to sellingresourcesHighlyaggressivesellingMinimal requirednonselling tasksWhen companycan’t closelycontrol salesforceStraightCommissionDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethodCompensation Methods for SalespeopleCompensation Methods for Salespeople
  45. 45. Sellingexpenses areless predictableMay be difficultto administerSome securitySome incentiveSellingexpenses varywith revenueManager hassome controlover nonsellingactivitiesSimilar salespotential acrossterritoriesWhen companywants to offerincentive butmaintain somecontrolCombinationDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethodSellingexpenses areless predictableMay be difficultto administerSome securitySome incentiveSellingexpenses varywith revenueManager hassome controlover nonsellingactivitiesSimilar salespotential acrossterritoriesWhen companywants to offerincentive butmaintain somecontrolCombinationDisadvantagesAdvantagesEspeciallyUseful ForCompensationMethodCompensation Methods for SalespeopleCompensation Methods for Salespeople
  46. 46. Combination PlansCombination Plans• Offer a base salary plus some proportion ofincentive pay• Most popular form of compensation• Well-suited for relationship selling bycompensating for nonselling activities whileproviding incentives to motivate sales
  47. 47. Combination PlansCombination PlansWhen the salesperson’s selling skill is the key to sales success,the incentive portion of compensation generally should berelatively large.However, when the product has been presold throughadvertising and the salesperson is largely an order taker, orwhen the salesperson’s job involves a large proportion ofmissionary or customer service work, the incentivecomponent should be relatively small.
  48. 48. Design Questions for Combination PlansDesign Questions for Combination Plans• Appropriate size of incentive relative to base salary?• Should ceiling be imposed on incentive earnings?• When should the sale be credited?• Should team incentives be used? How?• How often should incentive payments be made?
  49. 49. Sales ContestsSales Contests• Short-term incentive programs to accomplishspecific objectives• Winners receive prizes, recognition, sense ofaccomplishment• Successful contests require:– Clearly defined, specific objectives– An exciting theme– Reasonable probability of rewards for all– Attractive rewards– Promotion and follow-through
  50. 50. Structuring Effective Sales ContestsStructuring Effective Sales Contests• Prize structure :Contestrewards can take theform of cash,merchandise, or travel.– Prize value• Unique• Rank-ordered– Number of prize winners• > 1• Not so large incentive islessened– Contest structure willbe unique for eachsituation
  51. 51. Criticisms of Sales ContestsCriticisms of Sales Contests• Salespeople may borrow sales from anotherperiod to increase sales during contestperiod• Poorly administered contests can hurtmorale
  52. 52. Nonfinancial RewardsNonfinancial Rewards• Recognition makespeers and superiorsaware of outstandingperformance• Effective recognitionprograms:– Offer everyone areasonable chance ofwinning– Recognize bestperformers acrossseveral dimensions
  53. 53. Expense AccountsExpense Accounts• Types– Direct reimbursementGERİÖDEME – of all“allowable and reasonable” expenses– Limited reimbursement– sets expense limits by-item(such as a policy that limits reimbursement for restaurant meals to $40 perperson)– No reimbursement– salespeople covers all expenses;usually combined with higher total compensation—travel, lodging, meals, and entertainingcustomers
  54. 54. Rewarding A While Hoping for B?Rewarding A While Hoping for B?• Straight commission may work for transactionalselling, but…• Relationship selling is more complex; requires– Operating within a team– Securing, building, long-term relationship with profitablecustomers• Organizations must reward these additionalbehaviors

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