2. HPL was one of the largest food products company in India.
Very well-known and respectable brand.
Its products- milk, butter, ghee, cheese, milk-powder, ice-cream,
chocolates, shrikhand, tea-coffee whitener, and curd.
Some of its products were even marketed internationally to USA,
Singapore, and gulf countries.
The products were known for high quality and reasonable prices.
The company was the market leader, with maximum market share, in many
products, despite strong competition.
3. Severe competition from local as well as MNCs like Hindustan Unilever, Nestle India, and
Cadburys.
The company had been able to beat competition due to its sound business strategy of
providing quality products to consumers at affordable prices.
The company had 50 sales depots (or warehouses), with over 5000 distributors (or
wholesalers), who were supplying the company’s products to over 1.2 million retail outlets in
India.
The decision of the selection of right kind of distributors was important, because the
distributors had to invest at least Rs. 2,00,000 in infrastructure like cold storage and to
carryout key activities like selling to retailers, inventory carrying, warehousing, and
transportation.
The main criteria used for selection of distributors were: financial strength, market reputation,
availability of required infrastructure, and the previous experience in handling FMCG.
4. Main issue- motivation of sales representatives, sales executives and area sales managers.
The compensation provided for the salespeople was less than the industry norms.
Salaries paid at all the levels were much lower.
Incentives were given once in three years.
Financial rewards- the most important motivational tool.
5. Non- financial rewards were missing.
Decisions on promotions were delayed in the case of clear vacancies.
High turnover of people due to missing of the some of the important
policies in the company.
Training was inadequate.
Less promotional budget.
6. All the former suggestions told by the different regional sales managers.
Doing our jobs properly in place of blaming others for the declining of sales.
Finding out :
which region was not performing properly compared to the sales quotas
which sales areas were not achieving the targets
which sales executives, sales reps, and distributors were showing unfavorable
performance with large gaps.
Talking to them about the reasons behind all these problems.
Recognizing good performers during weekly or monthly meetings of salespeople.
Ensuring effective supervision by area sales managers.
7. Selection - Recruiting and selecting the right talent needed for each sales position is the
single most important skill of sales management.
Raising the Bar- Sales and service improvement is an outcome of deliberate, planned actions
over time, at all levels. "Raising the bar" must be the primary objective of sales and service
leadership.
Sales Process - Documenting your sales methodology and Best Practices both for salespeople
and sales managers provides a “Framework of Excellence” for improving your selling system.
Once documented, the sales process drives hiring, coaching, training, and marketing support
efforts.
Change - People change behaviors because they want to, because the value of change is
compelling, and because it benefits them significantly as individuals. If you want to change
selling behaviors, actively engage your people in the solution. It is their ownership that
ensures long-lasting change.
Measurement is the essential ingredient of process improvement. Without clear expectations
for activity and performance, sales improvement efforts seldom hit the mark.
8. Support Systems including activity scorecards, technology, pipeline forecasting, territory plans,
lead generation and strategy worksheets provide the tools to implement change. Tool
development is not a one-time effort, but a continuous process of enhancing the tools, modifying
them, and applying them to the business.
Focus Coaching sustains excellence and builds employee loyalty. Coaches are the catalysts of
team and individual effectiveness. Their ability to tap and stretch the capacity of each individual
generates power and momentum.
Training is the #1 intervention to communicate expectations, to stimulate growth, to lift
individual performance. It must be a core practice, consistently applied and customized to fit
your organization.
Compensation and recognition practices must be aligned to strategy. Alignment creates
leverage and increases the potential to maximize revenues.
Customer Retention - Its focus is indispensable, and everyone in the organization must take
ownership for their role in adding value and enhancing the customer experience.
Editor's Notes
According to their north regional sales manager, the main issue of the diminution of the sales was lack of motivation of sales representatives, sales executives and area sales managers. The second issue he raised was that the company was unable to retain good salespeople because the compensation provided for the salespeople was far less than the industry norms. He further said that not only the salaried paid by the company at all the levels were much lower than those paid by the competitors, but the incentives were given once in three years while the other companies paid the same on quarterly, half-yearly, or at the most, yearly basis. He said he learnt during his MBA programme that financial rewards were most important motivational tools.
RSM (South) said that he wanted to add that even non- financial rewards were missing. Decisions on promotions were delayed, even when there were clear vacancies due to resignation of area sales managers and sales executive positions. Even policies like personal growth opportunities and formal recognition programmes, which didn’t cost too much, were not considered by the company as part of the motivational mix which implies to their high people turnover. RSM (WEST) said that the subsequent training of experienced sales executives and assistant sales managers, once in three years, was too inadequate. The said that the general aim of training which is to improve the performance of employees was not well understood and hence the importance of training in improving the sales performance was ignored. He said even budget on advertising, sales promotions, and direct marketing was 15 per cent of the sales budget which would help the company to improve its top line whereas the competitors spent 25-30 per cent.
If I were Ramesh Shah, the general manager(sales) then I would have recommended all of the suggestions given by my regional sales managers during the review meeting to the management and adding to that the most important one was of the east’s RSM who have expressed his views totally different and really appreciable. He has said that everyone should do his/her job properly instead of blaming others. We should try and find out from the sales analysis which region was not performing well compared to the sales quotas and within the non-performing region, which sales areas weren’t achieving the targets? We should talk to the sales executives, sales reps, and distributors which were showing unfavourable performance with large gaps and find out the reason for this. Moreover, recognising the good performers during the weekly or the monthly meetings of salespeople is very important which greatly enhance the sales revenue, directly or indirectly. Finally, ensuring effective supervision by area sales managers is one of the most important thing which should be done on monthly or weekly basis depending upon the time and materials required. And any decisions on motivational mix should consider the needs of the consumers, the salespeople, and the company.
