SALES FORCE

MANAGEMENT
MKT 205
Main references
Joseph F. Hair (Jr.), Rolph E. Anderson, Rajiv Mehta, Barry J. Babin (2020) Sales Force
Management, Wiley.
Sales Force Management 2017 by Gregory A. Rich &

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 CHAPTER 9 & 10:
SALES FORCE LEADERSHIP & MOTIVATION

2
 Introduction

What exactly is leadership?

Is there a difference between supervision, management, and leadership?

Is there a difference between leadership and power?

What are the sources of power?

How can classical and contemporary leadership theories be applied to twenty-first century sales
force management?

3
 Foundations Of Leadership
Leadership is interpersonal because it affects others (followers or subordinates), who should
be willing to accept directions from the leader (sales manager or supervisor).

Leadership relies on influence the behavior of subordinate salespeople toward the

attainment of organizational objectives

Sales force leadership is the ability to guide, clarify, and chart the paths for salespeople
toward goal achievement.

Leaders inspire their subordinates to attain organizational goals.

Leaders espouse ethical and moral values that they expect their followers to subscribe to.

Leadership relies on communication to achieve goals

4
 Sources Sales Manager Power and Influence
on the Sales Force
Being leaders, sales managers exercise psychological, social, and inspirational influence over the sales force
through their use of power.

SALES MANAGER POWER

Legitimate Power Reward Power Coercive Power Referent Power Expert Power
Derived from the position The ability of the sales The ability of the sales Ability to inspire Based on leader skills,
occupied on the manager to provide manager to obtain followers based on knowledge, intelligence,
organizational structure, subordinate salespeople salesperson compliance charisma, loyalty, and job-related expertise and
the sales manager has with various benefits, through fear of identification with the proficiency.
formally delegated including money, praise, punishment, sanctions, or leader’s vision.
authority to seek or promotion and by withholding rewards
salesperson compliance. incentives such as (includes being fired
commissions and from the job).
bonuses.

P O S I T I O N P O W E R P E R S O N A L P O W E R
5
 Leadership Behavioral Styles Theory:
Ohio State University and
University of Michigan Studies
Task Orientation
Low
Quadrant 1
Leader focuses on achieving team harmony
and individual need satisfaction. Less
High
Employee Orientation
emphasis is placed on subordinate tasks.
Sales Force Management Implications:
Appropriate to use when experienced, high-
performing salespeople tend to be too
competitive with one another.
Quadrant 3
Largely passive, the leader does not provide
structure and exhibits little consideration for
subordinate needs allowing work and people
Low
to be self-managed.
Sales Force Management Implications:
Appropriate in situations with experienced,
high-performing salespeople that know their
tasks and enjoy work.
Friendship, mutual trust, respect, support, and
warmth
High
Quadrant 2
Leadership strives to accomplish the job
while maintaining a harmonious work team.
Leader provides guidance on how tasks
should be completed and is considerate of
subordinate needs.
Sales Force Management Implications:
Appropriate in situations with newly hired,
inexperienced sales trainees.
Quadrant 4
Leader focuses on getting the job done
by structuring tasks, but exhibits little
consideration for subordinate needs.
Sales Force Management Implications:
Appropriate in situations where experienced
salespeople are required to do unpleasant,
unfamiliar work.
Leaders organize, define, and clarify the
tasks subordinates must perform
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Applying Contemporary Leadership Theories To Twenty-first Century
Sales Force Management
Five prominent contemporary leadership approaches that are
germane to sales force management are:
1.
Transformational
1. Transformational leadership Leadership

2. Pygmalion leadership, and

3. Empowerment 5. 2.
4. Servant leadership, and Shared Pygmalion
Leadership Contemporary Leadership
5. Shared leadership Leadership
Theories

Classic theories are based on

transactional leadership. 4.
Servant 3.
Leadership Empowerment

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 Transactional Leaders

The rewards transactional leaders provide to the sales force include:

1. Commissions, bonuses, and salary increases, and
2. Promotions to higher-level positions.

In sum, transactional sales leaders take a short-term perspective and are not
“forward” looking leadership behaviors!!!!!

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 Transformational Leadership
(AKA Charismatic and Visionary Leadership)

A theory that holds considerable promise is known as transformational leadership, which adopts a
long-term orientation by focusing on future needs.
Transformational sales leaders activate their subordinates’:
1. Higher-order needs and
2. Encourage them to substitute company needs for their own.
Transformational sales leaders:
1. Raise salespersons’ awareness of value of their jobs
2. Consequences of their actions, and
3. Salesperson importance to the organization.
Transformational sales managers gain extraordinary commitment from their salespeople
using the following four key facets: Inspiration ; Intellectual stimulation; Individualized and
consideration

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 Pygmalion Leadership

Pygmalion leadership is based on the principle that positive thinking begets positive results.

Sales managers can set high, but realistic expectations to their sales force.

Result: A self-fulfilling prophesy as sales managers get what they expect, which is known as the
“Pygmalion” effect.

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Leadership and Empowerment: Distributive Power Sharing Through
Participative Management

Empowerment focuses on distributing power to lower-level employees, who often experience

low levels of self-efficacy, or feelings of powerlessness and the belief that their work does
not make any meaningful contribution to organizational performance.

Empowering employees allocates decision-making authority to better resolve problems, which

can help alleviate employee powerlessness.

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Leadership and Empowerment: Distributive Power Sharing Through
Participative Management
Low EMPOWERMENT CONTINUUM High

No Sales Force Sales Force Sales Force Sales Force Sales Force
Involvement in Consultation in Participation in Involvement in Self-
Decision Making Decision Making Decision Making Decision Making Management
Sales manager Sales manager Sales manager Sales manager Power and
makes all decisions makes all and salespersons delegates power authority
jointly provide and authority to distributed
decisions, but input and salespeople for between sales
Salespersons have periodically suggestions in decision making manager and
no decision making elicits input to or decision making salespersons
authority or suggestions from Equal power
Some power sharing on Sales manager
discretionary salespersons sharing, but sales decisions, but and salespersons
power manager is still sales manager equally involved
superior due to implements in formulating and
position in firm decisions implementing
hierarchy and strategy
implements
decisions
Low SALES FORCE SKILL LEVEL High

Low SALES MANAGER-SALES FORCE COOPERATION LEVEL High

Low SALES FORCE LOCUS OF CONTROL High

Low SALES FORCE POWER High

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 Implementing an Empowerment Program
for the Sales Force
2. Salesperson
Character Development
• Commitment to firm and
sales team success
• Trust, honesty,
adaptability, flexibility,
and accountability
• Desire to grow
• Ethics, values, and morals 3. Developing an
1. Salesperson Skill
Empowerment Culture
Development
• Cooperation
• Technological skills • Collaboration
• Time and Territory management • Mutual trust
skills Sales Force • “Win-win” mindset
• Communication skills (verbal and Empowerment • Open communications
nonverbal) Program • Access to critical information
• Self management skills • Holding salespeople accountable
• Team dynamics skills and tying rewards to meeting
• Statistical analysis of sales data goals
4. Providing
Empowerment
Opportunities
• Distributing power
• Delegating decision making
authority
• Shared participation in
decision making
• Developing and
implementing sales
strategies
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 Servant Leadership

Servant leadership refers to striving in decision-making to consider and serve the needs of people first ahead
of everything else.

Organizational leaders focus first on the well-being of the employees and stakeholders including the
communities they serve.

Servant leadership is not about acting submissive, but serves to proactively involve exhibit the following key
behaviors:
1. Empowering and developing people
2. Humility and authenticity
3. Stewardship and high moral values

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 Shared Leadership
The (re)emergence of contemporary empowerment, servant, and shared leadership theories
represents a major paradigm shift that has moved away from relying on "vertical,"
"hierarchical," or the “traditional” narrow “top-down” leadership styles towards the adoption of
alternative “bottom-up” leadership approaches.

Indeed, shared leadership—like empowerment and servant leadership—embody very similar

philosophical underpinnings that seek to focus on the well-being and attempt to satisfy
employees’ needs.

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SALES FORCE MOTIVATION

16
 Introduction

But what is motivation?

What is the nature of motivation?

What motivation theories can sales managers use to augment salesperson performance?

What reward and incentive programs, can be used to motivate salespeople?

What strategies and tools can be employed for sales force motivation?

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 Foundations of Motivation

In the context of sales management, motivation is the set of dynamic interpersonal processes
that cause the initiation, direction, intensity, and persistence of work-related behaviors of
subordinate salespeople toward the attainment of organizational goals and objectives.

Key features of motivation include:

 Direction, which means tasks on which the individual will focus effort.
 Intensity, which refers to the amount of physical and mental effort expended on a given task, and
 Persistence, which refers to the duration of the effort an individual will exert.

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Applying Contemporary Motivation Theories To Twenty-first Century
Sales Management
There are three broad classical schools of thought about motivation that are germane to sales
force management:

1. Contemporary 2.
Content Theories Motivation Theories Process Theories

• Hierarchy of Needs • Equity Theory

Theory 3.
Reinforcement • Expectancy Theory
• ERG Theory Oriented Theories • Attribution Theory
• Needs Theory • Also known as Organizational • Goal-Setting Theory
• Dual Factor Theory Behavior Modification Theory

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 Maslow’s Hierarchy of Needs

Higher Self-
Level Actualization
Needs
Esteem
Maslow’s well-known hierarchy of needs Needs
theory contends that people are motivated by
Social
a hierarchy of psychological growth needs. Needs
Safety
The gratification of needs at one level in the Needs
hierarchy activates needs at the next higher Lower
Level Physiological
level. Needs Needs

Can you think how this theory can be

used by sales managers to motivate
salespeople?

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 Maslow’s Hierarchy of Needs

Physiological needs for human survival, food, drink, shelter, warmth, clothing, etc.

Safety needs for security, such as medical and fear.

Social needs and involve feelings of belongingness to a family, group or community.

Self-esteem needs involve dignity, achievement, desire for reputation and respect.

Self-actualization: Realization of a person's potential, self-fulfillment, and personal growth.

Task for sales managers: Sales managers should keep track of the level of needs most important
to each salesperson. To avoid stagnating at any one level, salespeople must be given
opportunities to activate and satisfy higher-level needs so they can be successfully motivated
toward superior performance.

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22
 ERG Theory

Three need categories are posited by ERG theory:

1. Existence, which is similar to Maslow’s physiological and safety needs
2. Relatedness, which is similar to social and esteem needs, and
3. Growth, which is similar to self-actualization needs

Like hierarchy of needs theory, ERG proposes that individuals focus on higher-level needs
as lower-level ones are satisfied; unlike need hierarchy theory, though, it suggests that
people can move up and down the three-part hierarchy.

1. ERG Theory 2.
Existence Relatedness

3.
Growth
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 Needs Theory
Needs theory focuses on the following to motivate salespersons:

1. The need for power reflects the drive to dominate, influence, and have authority to control others.

2. The need for achievement is the strong urge to master and accomplish difficult tasks.

3. The need for affiliation consists of the desire to establish friendships, to have close working
relationships with peers as well as customers, and to avoid conflict.

1. 2.
Need For Needs Theory Need For
Power Achievement
3.
Need For
Affiliation
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 Dual Factor Theory
(AKA Motivation-Hygiene Theory)
Dual Factor theory focuses on motivation factors and hygiene factors to motivate
salespersons:
Sources of satisfaction are called motivators because they are necessary to stimulate
individuals to make superior efforts. They include responsibility, achievement,
recognition, and opportunities for growth and advancement.
 When present, they motivate salespeople; if lacking, they demotivate them.

Hygiene factors: These are the extrinsic aspects of the job, such as company policies, pay,
benefits, working conditions, and job security.

 When perceived as adequate or better, hygiene factors do not actually induce positive
motivation in salespeople. Their absence, however, leads to salesperson dissatisfaction and
demotivation.
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Applying Contemporary Motivation Theories To Twenty-first Century
Sales Management
2. Process theories, which emphasize the kind of goals and rewards that motivate people
and explain the thought process of employees and identify actions that fulfill their needs,
are:

a. Equity theory
b. Expectancy theory
c. Attribution theory, and
d. Goal-setting theory

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 Equity Theory

Equity theory of motivation suggests that salespeople compare

their relative work contributions and rewards with those of
other individuals in similar situations.

Salespeople experience inequity when they feel either under-

or over-rewarded for their contribution relative to that of
others.

Salespeople who feel under-rewarded decrease their work

efforts.

Salespeople who feel overpaid tend to increase theirs.

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 Expectancy Theory
Expectancy theory proposes that individuals contemplate the consequences of personal actions
in choosing different alternatives to satisfy their needs.
Motivation (or effort) is a function of three elements:
1. Expectancy
2. Instrumentality, and
3. Valence

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 Expectancy Theory

Basically, what this implies is that sales managers need to ensure

salespersons that:

1. Exerting effort will leads to higher achievement

2. Improved performance will lead to the attainment of certain

rewards, and

3. Most importantly ensure that the rewards that are offered are
actually desirable, if not salespersons will not expend higher
effort

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 Attribution Theory

Attribution theory explains that people want to know why an

event occurred and why they succeeded or failed at a certain
task.

An internal attribution is a reason within the salesperson that

could affect performance (ability, effort, skill, and
experience).

An external attribution is an explanation that lies beyond the

salesperson’s realm of control (luck, territory or task difficulty).

The outcome: salespeople can choose either to work harder or

to work smarter.

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 Goal-Setting Theory

Goal-setting theory attempts to increase motivation by linking

rewards directly to salespersons’ goals.

Sales managers should set goals:

1. For individual salespeople
2. That are moderately difficult to achieve, and

To implement goal setting, sales managers should:

1. Involve the salesperson in the goal-setting process to set realistic
goals
2. Meet and reset goals if conditions change

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 Applying Contemporary Motivation Theories To Twenty-first Century
Sales Management
3. Reinforcement-oriented theories (or OBM)—rely on systematic
application of rewards or punishments to strengthen, maintain, or
eliminate behaviors.
Sales managers can use the following four OBM approaches:
1. Positive reinforcement or a reward for a desired behavior.
2. Negative reinforcement or avoiding an undesirable outcome.
3. Punishment or sanction for displaying an undesired behavior.
4. Extinction or no positive reinforcement after an undesirable
behavior.
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 Using Rewards and Incentive Programs for
Sales Force Motivation
• sales managers can use intrinsic and extrinsic rewards to induce salespeople to
exert higher levels of effort
 In other words, employees’ income is tied directly to their performance.

1.
Extrinsic
Rewards
2.
5.
Sales Incentive
Recognition Reward and Programs
Incentive Programs
4. 3.
Intrinsic Promotion
Rewards Opportunities

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 Using Rewards and Incentive Programs for
Sales Force Motivation
Extrinsic Rewards
Extrinsic rewards include salary, commissions, fringe benefits, perks, formal recognition, job promotions, employee stock
ownership plans, profit sharing, gain sharing, stock options, and team-based compensation.
 Because compensation plans and packages constitute the most important way to remunerate employees, they
are discussed separately in next chapter .
B. Sales Incentive Programs
• Salespeoples' self-selected sales incentives can be cost-effective ways to increase sales and sales force morale.
• The important implication for sales mangers is that salespeople are willing to extend themselves more when they
are properly motivated by incentives they value most
• Some examples
 travel and merchandise are among the most popular awards.
 There is also growing salesperson interest in less traditional incentives, for example, tuition assistance for
themselves or their children and educational opportunities that could lead to career advancement.

34
Using Rewards and Incentive Programs for Sales Force Motivation
Promotion Opportunities : An attractive career path with promotion decision stages at regular intervals (at least
every three to five years) can keep many individuals motivated throughout most of their careers.
Intrinsic Rewards
Intrinsic rewards are psychological or behavioral in nature and seek to influence and satisfy internally experienced
desires. The following needs
Motivators Description
Need for status Recognition is a key motivating factor for top salespeople as they seek greater respect, image, and reputation.
Need for control While top salespeople like being with other people, they often also like to be in control and enjoy influencing others

Need for respect Top sales achievers like to be seen as experts who are able and willing to help and advise others.
Need for routine It is a misconception that successful sellers thrive on freedom. Most like to follow a strict routine and are upset when it’s interrupted

Need for Money is only one of the many things that motivate top sales performers. In addition to a nice house, fancy cars, and expensive
accomplishment clothes, they continually pursue new challenges in their jobs to maintain enthusiasm.

Need for Most outstanding salespeople have an abundance of physical energy and thrive on challenges. Therefore, they welcome new goals
stimulation as ways of channeling their energy.

Need for honesty Top sales achievers have a strong need to believe in the product they are selling. If they have doubts about the company or a new
product line, they are likely to consider other employment.

Need for Salespersons need to be supported by their senior sales management in their quest for higher sales. This commitment is exhibited
commitment from in the form of training, mentoring, and guidance provided by sales managers.
upper sales 35
 Sales Force Motivation Strategies and Tools

Sales managers can use other sales motivation strategies and tools that go
above and beyond rewards.

But the two most popular motivational strategies are:

a. Sales contests, and
b. Sales meetings

1. Motivation 2.
Sales Contests Strategies Sales Meetings

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 Sales Contests

1. Sales Contests: Purposes, Goals, and Objectives.

The purpose of a contest may be to motivate
salespeople to:
a. Increase the number of new customers
b. Develop sales of a new product
c. Counteract sales slumps due to seasonal variations
d. Clear overstocked inventory
e. Many more ….. Refer table 11.5 pg 347

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 Sales Contests

2. Contest Themes.
Sales managers should ensure that contest themes are:
a. Creative
b. Novel
c. Timely

The theme can be a:

a. Summer contest, or
b. Holiday contest

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 Sales Contests
3. Contest rules.
Formulate contest rules to clarify goals and prevent abuses.
Rules should also be phrased so that they discourage salespeople from holding back
orders before the contest, applying undue pressure on buyers during the contest, or
suggesting that buyers can cancel their orders after the contest.

4. Contest rewards and prizes.

Contest prizes should include items that most of the participants want, or the contest will not
be motivating.
Examples of rewards include:
Glamorous trips , Luxurious boats and cars ,Sporting equipment , Home entertainment systems

39
 Sales Contests
5. Salesperson participation.
Most contests don’t pit one salesperson against another, but award prizes for achieving
certain standards of performance.
Prizes must be at least attractive enough to motivate because token prizes with little
recognition value may kill the motivational effects of the contest.

6. Contest duration.
Usually last between one and five months.
Contests that occur too regularly (at the same time each year) may come to seem routine and
lose their incentive value.

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 Sales Contests
7. Promoting the contest.
To build enthusiasm, the contest should be promoted with personal letters, and e-mails from
management can announce and reinforce the imminent contest.
 The letters should announce the exact nature and rules of the contest to all salespeople
simultaneously.
8. Assessing contest effectiveness.
Management should assess whether the contest objectives were achieved, such as those
identified earlier under the purposes of the contest.
9. Potential pitfalls of contests.
Sales managers should recognize that contests can become so routine that they are expected,
and sales reps consider awards as part of their yearly compensation.
Contests can temporarily increase sales and thereby provide a means of disguising sales force
shortcomings or sales management deficiencies.
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 Why Some Sales Contests Not So Effective

Evidently, a lot goes into planning sales contests. Even so, some sales contests fail because of:
a. Overestimating goals
b. Neglecting to publicize the contest
c. Rewarding only the top salespeople

42
 Sales Meetings
Sales meetings are strategic for
communicating about new-product
introductions, price changes, upcoming
promotional campaigns, new policies, and
overall company goals.

1. National, regional, and local meetings.

a. National meetings held once a year

b. Regional meetings held 3-4 times a year, and

c. Local meetings are regularly held 43

 Sales Meetings
2. Planning sales meetings.
Planning sales meetings involves several tasks, such as:
a. Establish meeting goals
b. Select a theme on the purpose of the meeting
c. Develop a tentative agenda or program for the meeting
d. Develop and finalize the program and budget
3. Competitive spirit.
The sales meeting is an excellent opportunity for management to recognize sales
accomplishments, to announce the names of sales leaders, and to award prizes to outstanding
salespeople and sales managers.
4. Specialized training.
National or regional sales meetings offer management an excellent opportunity to train all
salespeople simultaneously (e.g., regarding how to introduce a new product or customer
strategy).
44
 Sales Meetings
5. Change of pace.
Getting away helps salespeople unwind. Many firms hold their sales meetings at resort sites,
where salespeople can enjoy golf, tennis, swimming, and health club facilities between
business meetings.

6. Video conferences.
Setting up a video conference is an efficient way to link several different locations together
for an interactive sales meeting rather than bringing the entire sales force of an
organization together under one roof.

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Additional Perspectives In Twenty-First Century Sales Force Motivation
Additional perspectives in 21st century sales force motivation, are:
• Organizational and Job Commitment
• Organizational Climate
• Learning Orientation vs. Performance Orientation
• Salesperson’s Career Cycle, and
• Empowerment and Participative Management

Organizational and Job Commitment Learning Orientation vs. Performance Orientation

Successful salespeople feel a bond between themselves
and their company and work.
Organizational commitment is identifying with and
internalizing the company’s values and goals and
desiring to stay with the organization.
Job commitment refers to the degree of involvement
(high or low) salespeople have in their job.
A performance orientation predisposes salespeople to
work hard and generate sales.
A learning orientation occurs when salespeople
discover news ways of selling effectively and try new
approaches, even if doing so leads to mistakes; they
learn by not repeating mistakes.

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Organizational Climate
Organizational climate consists of the perceptions salespeople have about their work situation and conditions.
Whether favorable or unfavorable, these perceptions can affect salesperson attitudes about their job situation.
Organizational climate has four components:
1. Job characteristics (role perceptions, opportunities, and problems in the job)
2. Leadership characteristics (supervisory styles and salesperson/sales manager relationships)
3. Organizational characteristics (company philosophy about managing salespeople)
4. Work group characteristics (formal and informal relationships among the salespeople)

Learning Orientation vs. Performance Orientation

A performance orientation predisposes salespeople to work hard and generate sales.
A learning orientation occurs when salespeople discover news ways of selling effectively and try new approaches,
even if doing so leads to mistakes; they learn by not repeating mistakes.

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 Salesperson’s Career Cycle/Stages
► Salespeople need to be managed according to four career stages they pass
through.

4.
Decline or
Disengagement
Stage

3. Salesperson 1.
Maturity or Career Preparation or
Maintenance Exploration
Stage
Cycle/Stages Stage

2.
Development or
Establishment
Stage
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 Salesperson’s Career Cycle/Stages
Salespeople need to be managed according to four career stages they
pass through.
1. In the preparation/exploration stage, salespeople’s priority is to build up
knowledge and skills to succeed in their new job.
2. In the development/establishment stage, they have become committed to the
selling profession, seek stability in their professional and personal lives, and strongly
desire professional success.
3. The maturity/maintenance stage requires holding on to what has already been
achieved—position, status, image, and performance level. In this stage, salespeople
prefer to sell smarter rather than harder and may well plateau at a desirable level.

4. In the decline/disengagement stage, salespeople may be preparing at least mentally

for retirement and may psychologically withdraw from sales by making fewer calls per
day, call solely on existing accounts rather than on prospects, and lose interest in their
work. 49
 Career Plateauing
Career plateauing occurs when a salesperson no longer grows or
develops in the position, or when the likelihood of the person’s
receiving additional responsibility is low.
3 major reasons:
The salesperson’s performance is deficient.
Few opportunities for promotions or augmented responsibility
are available in the firm.
The individual has a preference or some constraint that prevents
him or her from taking on added responsibility.

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 Career Plateauing
Sales managers can take several actions with a plateaued salesperson, such as:
Review the job description of the advanced position to determine whether a salesperson has the
skills and abilities necessary to perform effectively in it.
Provide different, more focused training for a salesperson who has insufficient capacities for
assuming additional responsibility but might be able to perform better in his or her current jobs.
Consider changing the nature of the job—increase the number of sales activities the salesperson
performs, use sales teams if feasible, and adopt relationship-selling principles to better serve
customers.
Explain to the underachieving salesperson why his or her performance is deficient, and work out
strategies for addressing the sales problems.
Maintain competitive compensation and promotional programs for a salesperson at all career
stages.
Provide career information to each salesperson—and explain the consequences of taking on or
failing to take on additional responsibility.
51