Marketing_Management_14th_Edition-min

558 PART 7 COMMUNICATING VALUE
Inside salespeople are of three types: Technical support people provide technical information and
answers to customers’ questions. Sales assistants provide clerical backup for outside salespersons, call
ahead to confirm appointments, run credit checks, follow up on deliveries, and answer customers’
business-related questions. Telemarketers use the phone to find new leads, qualify them, and sell to
them. Telemarketers can call up to 50 customers a day, compared to 4 for an outside salesperson.
The inside sales force frees outside reps to spend more time selling to major accounts, identifying
and converting new major prospects, placing electronic ordering systems in customers’ facilities,
and obtaining more blanket orders and systems contracts. Inside salespeople spend more time
checking inventory, following up orders, and phoning smaller accounts. Outside sales reps are paid
largely on an incentive-compensation basis, and inside reps on a salary or salary-plus-bonus pay.
SALES TECHNOLOGY The salesperson today has truly gone electronic. Not only is sales and
inventory information transferred much faster, but specific computer-based decision support
systems have been created for sales managers and sales representatives. Using laptop computers,
salespeople can access valuable product and customer information. With a few keystrokes,
salespeople can prime themselves on backgrounds of clients; call up prewritten sales letters;
transmit orders and resolve customer-service issues on the spot; and send samples, pamphlets,
brochures, and other materials to clients.
One of the most valuable electronic tools for the sales rep is the company Web site, and one of
its most useful applications is as a prospecting tool. Company Web sites can help define the firm’s
relationships with individual accounts and identify those whose business warrants a personal sales
call. They provide an introduction to self-identified potential customers and might even receive the
initial order. For more complex transactions, the site provides a way for the buyer to contact the
seller. Selling over the Internet supports relationship marketing by solving problems that do not require
live intervention and thus allows more time for issues best addressed face-to-face.
Motivating Sales Representatives
The majority of sales representatives require encouragement and special incentives, especially those
in the field who encounter daily challenges. 103 Most marketers believe that the higher the salesperson’s
motivation, the greater the effort and the resulting performance, rewards, and satisfaction—
all of which in turn further increase motivation.
INTRINSIC VERSUS EXTRINSIC REWARDS Marketers reinforce intrinsic and extrinsic
rewards of all types. One research study found the reward with the highest value was pay, followed
by promotion, personal growth, and sense of accomplishment. 104 Least valued were liking and
respect, security, and recognition. In other words, salespeople are highly motivated by pay and the
chance to get ahead and satisfy their intrinsic needs, and may be less motivated by compliments
and security. Some firms use sales contests to increase sales effort. 105
SALES QUOTAS Many companies set annual sales quotas, developed from the annual
marketing plan, on dollar sales, unit volume, margin, selling effort or activity, or product type.
Compensation is often tied to degree of quota fulfillment. The company first prepares a sales
forecast that becomes the basis for planning production, workforce size, and financial
requirements. Management then establishes quotas for regions and territories, which typically add
up to more than the sales forecast to encourage managers and salespeople to perform at their best.
Even if they fail to make their quotas, the company nevertheless may reach its sales forecast.
Each area sales manager divides the area’s quota among its reps. Sometimes a rep’s quotas are set
high, to spur extra effort, or more modestly, to build confidence. One general view is that a salesperson’s
quota should be at least equal to last year’s sales, plus some fraction of the difference
between territory sales potential and last year’s sales. The more favorably the salesperson reacts to
pressure, the higher the fraction should be.
Conventional wisdom is that profits are maximized by sales reps focusing on the more
important products and more profitable products. Reps are unlikely to achieve their quotas for
established products when the company is launching several new products at the same time. The
company will need to expand its sales force for new-product launches.
Setting sales quotas can create problems. If the company underestimates and the sales reps easily
achieve their quotas, it has overpaid them. If it overestimates sales potential, the salespeople will find it
very hard to reach their quotas and be frustrated or quit. Another downside is that quotas can drive