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Lecture Dalrymple's sales management: Concepts and cases – Chapter 12: Compensating salespeople

This chapter presents the following content: What is motivation? reasons for motivating salespeople, what goals are most important? how successful were you at reaching your goals? maslow’s hierarchy of needs, an exercise to determine your motivational needs,. | Part V SALES FORCE LEADERSHIP Chapter 12: Compensating Salespeople Acceptable ratio of costs to sales force output in volume, profit, or other objectives Encourage activities consistent with firm’s overall, marketing, and sales force objectives and strategies Attract and retain competent salespeople, thereby enhancing long-term customer relationships Be clear and be flexible enough to allow adjustments that facilitate administration Goals of a Sales Force Reward System Convergence Selling Account Management Leverage Selling New Business Development New Current CUSTOMERS Current New PRODUCTS Figure 14-1: The Customer-Product Matrix The Customer-Product Matrix Compensating Salespeople Components Needs SALARY Motivate effort on non-selling activities Adjust for differences in territory potential Reward experience and competence COMMISSIONS Motivate a high level of selling effort Encourage sales success INCENTIVE PAYMENTS Direct effort toward strategic objectives Provide additional rewards for top (Bonus) performers Encourage sales success SALES CONTESTS Stimulate additional effort targeted at specific short-term objectives PERSONAL BENEFITS Satisfy salespeople’s security needs Match competitive offers Aligning Pay With Strategy Government Computer Sales, Inc.’s compensation plan ties a portion of reps' pay to the information they obtain from their clients. Mandates reps to dig deeper and put GCS in the minds of the government agencies and educational institutions that use its products. If a rep has $15,000 of available commission for the first ½ of the year the plan would work as follows: 40% ($6,000) is tied to account management (i.e., customer information) 60% ($9,000) is tied to a profit dollar quota Reps who meet the documentation requirements receive all $6,000; those who meet less than 85% do not receive the $6,000. Use of Compensation Plans Percentage of Companies Using Straight Salary 18 Straight Commission 19 Combinations Plans (63%) Salary Plus Bonus | Part V SALES FORCE LEADERSHIP Chapter 12: Compensating Salespeople Acceptable ratio of costs to sales force output in volume, profit, or other objectives Encourage activities consistent with firm’s overall, marketing, and sales force objectives and strategies Attract and retain competent salespeople, thereby enhancing long-term customer relationships Be clear and be flexible enough to allow adjustments that facilitate administration Goals of a Sales Force Reward System Convergence Selling Account Management Leverage Selling New Business Development New Current CUSTOMERS Current New PRODUCTS Figure 14-1: The Customer-Product Matrix The Customer-Product Matrix Compensating Salespeople Components Needs SALARY Motivate effort on non-selling activities Adjust for differences in territory potential Reward experience and competence COMMISSIONS Motivate a high level of selling effort Encourage sales success INCENTIVE PAYMENTS Direct effort toward strategic objectives Provide additional