Sales management coursework assignment
Sales Management Coursework Assignment
Outline what you believe to be going wrong with the sales efforts at Gardnov.
Richard Booth is the newly appointed sales manager of Gardnov Limited, he has spent his first four weeks by simply observing how the sales force operated by accompanying them on sales visits and by talking to the customers.
According to his observation, he found the company sales force are generally lacking in motivation and without energetic. Even customers can feel about that. Therefore, Richard has to do something in order to arouse the motivation of the sales force.
As no new account has been opened during the past four months, it means that the sales force haven’t expend their market and just keeping the existing customers. Sales will not grow lots if new account hasn’t been opened. Richard found the sales force are not trying very hard to get new customers.
Richard had visited some customers in each region and he was depressed to hear that even regular customers felt that they didn’t relate closely to Gardnov’s sales force, customers felt the sales force has been more like order-takers instead of order-makers. It shows that the sales force are not putting efforts on the customers, customers feel that they are unimportant because the sales force showed little interest in them.
Besides, a lot of customers reflected that the sales people were unable to answer questions about some of the products in the catalogue. It shows the sales people have lack of knowledge about the products that they are selling, it makes customers without confidence to buy the products because even the sales people did not know the details of the products. They felt that the salespeople showed little concern, spent less time on them, and had little enthusiasm for the products they were selling.
Outline what steps Richard should take to investigate further the problems highlighted by his initial research, whilst gaining/maintaining the support of the sales force.
By gaining/maintaining the support of the sales force, Richard analysed his initial research, and he will need more research to investigate further problems. By investigating the problems, he will use primary research and secondary research.
According to the existing situation, Richard has already done some primary research which included: spending his first four weeks observing how the sales force operated by accompanying them on sales visits and talking to customers. By communicating with the customers directly, Richard can be able to understand what customers need and want from the sales force, and also be able to know if the sales force are effective or not. By observing the sales force, he knew how they work normally and in which aspects that they need to improve to achieve the sales profit. Richard will also need to find out how the company can help the sales force, supporting them and motivate them to sell more products to customers.
Besides, Richard also use other ways of primary research to investigate how he can support the sales force and improve the problems in the sales force. He may send questionnaires to every customers (may enclose a brochure or leaflet which include the introduction of new products of the company or even with discount coupons), therefore he will be able to get more opinions about the sales force and he will directly know the problems in the sales force because customers are the most important sources of a company. After analyzing those statistic results, he can be able to take steps to improve sales performance accordingly by using those opinions from customers.
Apart from primary research, Richard can use secondary research to investigate more information and can find out more ways to solve out the problems of the sales force.
He can use internet research to get some ideas to maintaining the support of the sales force, internet is very useful nowadays, therefore lots of information can be found in internet.
By using the research, Richard can investigate more about the problems of the sales force, e.g. to motivate the sales force by using rewarding methods, training the sales force…..etc. After Richard knows the problems of the sales force, he can get some solution by using research and therefore he can be able to gaining and maintaining the support of the sales force.
Research can help Richard a lot, by taking some marketing research, he can be able to define the problems, decision alternatives and the research objectives. Then it can develop the research plan from the data sources he found, the research approaches including face to face interview customers, questionnaires, internet searching solution. So that Richard can take those steps to improve the sales performance in the sales force and therefore can lead the sales force and make them to develop effective selling habits and finally increase the profits of the company.
What are the disadvantages of the present salary-only compensation plan?
Salary-only compensation is mean straight salary, the sales people receives a fixed amount of money at fixed intervals, such as weekly or monthly. These security-oriented people prefer base salary or drawing account so that they can depend on some regular income to meet basic living expenses.
In Gardnov Limited, the sales force are each paid a straight salary averaged £21,000 each, within a range of £16,500 to £27,300, depends upon his age and the length of time he has been with the company.
The disadvantages of straight-salary method of compensation plan are:
It provides no financial incentive to put forth extra effort. That’s mean the sales force will not put much more efforts if the salary is fixed, they won’t get more salary if they gain some new customers or sell more products to customers. Therefore they will not work very hard to sell the products to customers because they can still obtain the same amount of salary every month.
It may increase selling costs because salaries go on when sales are not being made. If the sales force are not putting effort on selling the products to customers, then the sales profit will not made but Gardnov Limited still need to pay salary to the sales force because of its straight-salary. Therefore it might become a big expenditure if sales force didn’t earn any sales profits for Gardnov Limited.
It often leads to income inequities, since the least productive salespeople tend to be overpaid, and the most productive to be underpaid. There have six salespeople in Gardnov, if only few salespeople working hard and selling products to customers, then they will feel the straight-salary is not equities because they are working harder than other salespeople. They tend to be underpaid and the others tend to be overpaid, so that Gardnov Limited will need to make sure every salesperson are working their best to sell the products to customers under and let the salespeople think Gardnov Limited is fair to them.
It also leads to adequate, but not superior performance. By using straight-salary method, it would lead adequate sales profits by sales force, but it will not leads to superior performance because it cannot motivate the salespeople to put a lots of efforts on their selling job, as they can get the same amount of salary each month even though they put little effort on it.
The pay of the salary in Gardnov Limited is depends on the salespeople’s age and the length of time they have been with the company. Therefore if the youngest salesperson works very hard and sells lots products to customers, he will not get the high pay and he may even get the lowest pay in the company because of his age and the length of time in Gardnov. It will discourage his working enthusiasm and ambitions because he knows that he just get the same pay every month. On the other hand, the oldest salesperson will not working hard as well if he knows that he will get highest pay. Under this circumstance, it can’t motivate both of them to work and sell products for Gardnov initiative. And therefore the salary-only compensation plan might not suitable for Gardnov at this moment.
Produce some initial recommendations on how Richard might improve sales performance.
There have some ways to improve sales performance, it might help Richard to improve the sales performance.
Improving team performance is very important for Gardnov, the sales force are aligned with the Gardnov’s mission and culture. Gardnov has a committed and empowered workforce. Improving the utilization of the salespeople will help to increase sales volume and profitability of Gardnov, it can improve the sales performance by improve the sales force team workforce.
Training is one of the way that Richard can take, according to the case study, customer complain that the salespeople were unable to answer questions about some of the products in the catalogue, they felt that they didn’t relate closely to Gardnov’s sales force. Therefore customer already felt Gardnov’s sales force are not professional because they are deal with their problems. Training is a important job for Richard, it can develop the sales force into a successful, productive part of the team. Sales training and sales force development should be thought of as a long term, by training them more knowledge of the products they are selling, the skills to deal with customer, satisfy customer needs and wants.
Motivation is another important part of improving the performance of the sales force. There are many things can motivate a salesperson to perform better, for example, salespeople can be motivated of they feel a lot of work to do on the job will lead to better performance, with better performance leading to higher rewards. Therefore Richard might try to reward them to sell more products to customer, it might help the sales force to increase sales because the salespeople will begin a healthy amount of competition.
Another motivation way to motivate the sales force perform better is changing the compensation plan of Gardnov. At the moment Gardnov is using straight salary and they get paid depends on their age and the length of time with the company. Therefore some salespeople might think it’s unfair and it will not motivate them to work harder because they will not get more paid if they work harder and selling more products to customer. So there have others method of compensation plan, e.g. straight commission. Straight commission is the person receives an amount that varies with results, usually sales or profits. It provides incentives rather than security, the salespeople will increase their productivity because they can get their own commission rewards after selling products to customers. For example, a salesperson may receive 10% of commission on all sales, which mean if he sold £400, he can get £40 of commission with his base salary. Therefore income is directly related to productivity, its easy to calculate, so salespeople may keep track of their earnings.
Richard has to develop a sales system to invest in a customer management software program, therefore all the data will be in one locale, enabling Gardnov to increase sales while simultaneously being more efficient.