Sales Force Management

Leadership, Innovation, Technology

Mark W. Johnston, Greg W. Marshall

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000317510
• Edition: 13
• Topic: Business
• Subtopic: Sales
• Index: Business

In this 13th edition of Sales Force Management, Mark Johnston and Greg Marshall continue to build on the book's reputation as a contemporary classic, fully updated for modern sales management teaching, research, and practice. The authors have strengthened the focus on the use of technology in sales management, offered new discussions on innovative sales practices, and further highlighted sales and marketing integration.

By identifying recent trends and applications, Sales Force Management combines real-world sales management best practices with cutting-edge theory and empirical research in a single, authoritative source. Pedagogical features include:

• Engaging breakout questions designed to spark lively discussion.
• Leadership Challenge assignments and Minicases at the end of every chapter to help students understand and apply the principles they have learned in the classroom.
• Leadership, Innovation, and Technology boxes that simulate real-world challenges faced by salespeople and their managers.
• Ethical Moment boxes in each chapter put students on the firing line of making ethical choices in sales.
• Role-Play exercises at the end of each chapter, designed to enable students to learn by doing.
• A comprehensive selection of updated and revised longer sales management case studies, in the book and on the companion website.

This fully updated new edition offers a thorough and integrated overview of accumulated theory and research relevant to sales management, translated clearly into practical applications—a hallmark of Sales Force Management over the years. It is an invaluable resource for students of sales management at both undergraduate and postgraduate levels.

The companion website features an instructor's manual, PowerPoints, case studies, and other tools to provide additional support for students and instructors.

CHAPTER 1

Introduction to Sales Management in the Twenty-First Century

LEARNING OBJECTIVES

Sales management is one of the most important elements in the success of modern organizations. When major trends emerge, such as a shift in the economy toward small to medium-sized businesses, it is incumbent upon sales managers to react with new selling approaches. And not only is personal selling the most expensive component of the marketing mix for most companies, but it is the firm’s most direct link to the customer. While Thoreau may have believed that the world will beat a path to the door of the company with the best mousetrap, the world needs someone to show how that mousetrap is better—and that role usually belongs to the salesperson. Otherwise, that sale may never occur. Therefore, management of the sales force is one of the most important executive responsibilities.

This chapter introduces you to the field of sales management. After reading it you should be able to:

• Identify and discuss key trends affecting sales organizations and sales managers today.
• Present a general overview of the sales management process.
• Identify and illustrate the key external and internal environmental factors that influence the development of marketing strategies and sales programs.

SALES MANAGEMENT IN THE TWENTY-FIRST CENTURY

As reflected in the chapter opener, personal selling and, consequently, sales management are undergoing dramatic changes. These changes are being driven by several behavioral, technological, and managerial forces that are dramatically and irrevocably altering the way salespeople understand, prepare for, and accomplish their jobs. Among the behavioral forces are rising customer expectations, globalization of markets, and demassification of domestic markets; technological forces include sales force automation, virtual sales offices, and electronic sales channels; and managerial forces consist of a shift to direct marketing alternatives, outsourcing of sales functions, and a blending of the sales and marketing functions.¹

Salespeople and those who manage them realize these changes affect every aspect of sales management from the way the sales department is structured to the selection, training, motivation, and compensation of individual salespeople. Sales organizations are being reinvented to better address the needs of the changing marketplace. A number of critical issues have been identified in reinventing the sales organization, including the following: (1) building long-term relationships with customers, which involves assessing customer value and prioritizing customers; (2) creating sales organizational structures that are more nimble and adaptable to the needs of different customer groups; (3) gaining greater job ownership and commitment from salespeople by removing functional barriers within the organization and leveraging the team experience; (4) shifting sales management style from commanding to coaching; (5) leveraging available technology for sales success; and (6) better integrating salesperson performance evaluation to incorporate the full range of activities and outcomes relevant within sales jobs today.²

In the broadest perspective, these new-age issues in sales management represent three key themes: (1) innovation—willingness to think outside the box, do things differently, and embrace change; (2) technology—the broad spectrum of technological tools now available to sales managers and sales organizations; and (3) leadership—the capability to make things happen for the benefit of the sales organization and its customers. The chapter opener provides vivid examples of each of these issues at play as firms modify the way they do business to accommodate the twenty-first-century marketplace. Throughout the chapters in this book, you will find highlighted feature boxes calling attention to industry examples of innovation, technology, and leadership among sales organizations. Now we introduce the themes and briefly address their impact on personal selling and sales management. In addition, we will also introduce the issues of globalization and ethics in sales management.³

Innovation Fuels Success in Selling Today

For many years the dominant sales approach was transactional selling—a series of transactions, each one involving separate organizations entering into an independent transaction involving the delivery of a product or service in return for compensation. In today’s highly competitive environment, however, customers realize there are benefits in building relationships between themselves and their suppliers and have thus turned to relationship selling approaches. For example, Apple has made a strategic decision to reduce the number of vendors it works with from several thousand to several hundred focusing on more strategic relationships with each vendor. As a result of buyers narrowing their vendor pool, salespeople are being asked to do more, working with customers to solve their problems, improve efficiencies, and, in general, add value to their customers’ business. More and more companies have salespeople with offices at or near their customers’ facilities. For example, P&G has aggressively reorganized its client teams so they are stationed very close to the company’s major accounts. Bentonville, Arkansas, home to Walmart, is also home to a team of several hundred P&G employees!

Offering this level of service is expensive, however, and it cannot be provided equally to all customers across the board. As a result, sales managers must prioritize their customers, creating partnerships with some while seeking to maximize efficiencies with others. In essence, organizations are creating a multilayered sales strategy that seeks to create unique and even more strategic relationships with the best customers while streamlining a transaction-based relationship with others who demand less service.⁴ Shell Oil, for example, found that some smaller buyers did not want or have time for personal visits by salespeople. When the company reallocated personal sales efforts to larger accounts and began using only telemarketing to call on smaller accounts, it found that all customers, even those assigned to telemarketing, were more satisfied. Selling costs were reduced, sales increased, and profits soared.

Sales Effectiveness Is Enhanced through Technology

Broadly speaking, technology has had a profound effect on almost every facet of personal selling. Tablets are a great example. Beer salespeople use iPads to show proprietors and customers a video about their brand—say, Heineken—and then ask viewers to answer a question about the video. If you get it right you get a free drink coupon! They also ask if you wanted to provide information, such as e-mail address and age, in order to stay up to date on Heineken news or offers. Such a seamless approach to customers would not be possible without the accompanying technology. Of course, the Internet has taken the interaction between customer and company to a new level, creating the ability to remain in touch with the customer (update information, handle questions, deal with complaints) in ways that have not been possible in the past. Companies are still learning how to best incorporate new technology into the business of selling.

The Internet’s ability to inform, persuade, and enhance the personal selling component makes it a critical part of sales management in the twenty-first century. For today’s young salespeople and buyers, the Internet is simply a given—they can’t imagine what business was like before it! Nearly every company of any size has created an extensive, integrative, and interactive website to sell and service customers. Zappos is a great example of a firm whose sales, customer satisfaction, and loyalty are greatly enhanced by their Web presence. The website has become an important sales tool as account managers work with customers to help them see the benefits of ordering online.

But don’t think technology is just about the Internet alone. Electronic data interchange (EDI) systems in manufacturing and efficient consumer response (ECR) systems in retailing enable companies to tie their computers directly to their customers. When a customer’s computer recognizes a low inventory, it can generate an order directly to the vendor’s computer, which then schedules the product for delivery (and in some cases even schedules the product for manufacturing). Thus, order and delivery systems have become just-in-time delivery systems. In addition, customer relationship management (CRM) systems are driving the overall customer capturing and retention enterprise in many firms.

TECHNOLOGY Social CRM

In Chapter 3 you will learn the basics of customer relationship management (CRM) and how it fits into the world of selling and sales management. At its essence, CRM provides an organization the opportunity to better manage customer relationships through comprehensive, integrated technology capabilities. Today, with the impact of social media, it is important to integrate data from these social media sites with existing customer relationship management systems.

Social CRM apps help salespeople and companies track customer activity and allow them to engage with customers quicker and more effectively. Social CRM apps are now common among salespeople. Companies’ social media presence helps build their brand and build trust among customers. As customers use social media sites to interact with companies, salespeople need to be able to easily communicate with them and track their satisfaction rate.

The social CRM app market is growing, but the apps are only useful if it ties into a company’s bottom line. The apps have been shown to help business objectives and increase the productivity of salespeople. Mobility is an important factor today and is considered a reason for the success of social CRM apps. As conversations between salespeople and customers move to the world of social media, salespeople must be equipped with the proper technology to best interact with and understand the customer.⁵

Chapter 3 provides a more extensive discussion of CRM and how it fits into various elements of sales management. For now, take a look at the Technology box for some insights on the status of CRM.

Leadership Is a Key Component in Sales Management Success

In the sales environment of the twenty-first century, traditional work relationships are being questioned and are often replaced with new ones. Nowhere is this more prevalent than in the relationship between salesperson and sales manager. In the traditional top-down bureaucratic style, managers were the supervisors responsible for administering the sales force. Conversely, they were held directly accountable for the actions of their salespeople. Words like control and manage were used to describe their activities.

The highly dynamic and competitive environment of the twenty-first century demands a more responsive, flexible approach to sales management. Sal...