Chapter Six: Training the Sales

Team
LEARNING OBJECTIVES
• After completing this chapter the student will
be able to
Define Sales Training
Explain Importance of Sales Training
Explain Methods of Sales Training
WHAT IS SALES TRAINING?
Sales training is the effort an employer puts forth to
provide salespeople job-related culture, skills,
knowledge, and attitudes that should result in
improved performance in the selling
environments.
• Sales training is a process of providing the sales
force with specific skills for performing their task
better and helping them to correct deficiencies in
their sales performance.
• When a new product is introduced into the
market, the market situation undergoes a change
with the entry of a new competitor or a new
technology.
• Sales training becomes more and more an
essential tool of sales management because of
the changing nature of selling, which is shifting
from mere product or service selling to the study
and satisfaction of customer’s needs
 Characteristics
1. Sales training is imparted to develop selling skills of
the sales persons.
2. It develops principles and practice of selling.
3. Sales training is a planned and organized activity of
the sales department.
4. The sales organization and the salesmen, both are
benefited from the sales training.
5. Training programs are organized for the interests of
new and old salesmen.
6. Its aim is to provide maximum satisfaction to
customers through the knowledge gained by
salesmen.
7. Training is given to find out solutions to various
problems related with sales.
Why train
• The purpose of training is to improve the overall
competence of members of a sales team, and this is
usually tackled by sales managers working to:
●impart knowledge of the company, its products, and its
markets
●create or change attitudes that affect performance
●develop skills that increase performance
●develop habits that contribute to improved performance
●reduce the level of field management supervision
subsequently needed, or to enable managers to widen
their span of control and take on other duties or more
subordinates
●increase job satisfaction (reducing sales force turnover).
Components of a Training Programme

8
 Process of Sales Training
• Like recruitment and selection, training is also
a managerial function. The management is
responsible to induct, socialize, train, develop,
and make new employees who can work in
the company.
• Training is an organized process to extract the
best from the employees and to use it for the
success of the organization.
• Sales training is a systematic process
consisting of a number of steps to achieve
training goals.
• Let us understand the typical sales training process as
explained by Ingram (2009)
1. Assess Sales Training Needs: deals with identifying the
necessary skills, attitudes, perceptions and behaviors of
the sales representatives.
2. Set Training Objectives: the necessary measurable
outcome of the training program
3. Evaluate Training Alternatives
4. Design Sales Training Program :identifying the training
program period and modules and the necessary skills
to be imparted, logistics arrangements
5. Perform Sales Training :actual implementation of the sales
training program
6. Conduct Follow up and Evaluation
 Training Methods
• Selection of the right training method is vital.
Before choosing a method, it is essential to know
which method will offer the best skill and learning
development to the trainees.
• There are number of training methods available.
Use of a particular method depends on the type of
trainees’ viz. worker, supervisor and manager.
1. Lecture Method:
This method basically presents the needed information
on selling skills and techniques to the trainees.
Sales trainees learn ideas about selling as a functional
component, managerial practices of selling, different
underlying problems of selling, creativity in selling,
role of selling in cross-functional interaction, etc.
A participative environment is created in the lecture
method, where trainees can be actively involved by
listening to the lectures, writing notes, asking
questions, clearing doubts, and getting suggestions.
• Often written materials and instruction manuals
are handed to the participants.
• Company executives, senior managers,
professional trainers, guest lecturers with huge
experience in the marketing discipline are invited
to act as speakers in the lecture sessions.
2. Conference Training
• Conference is a platform for discussing various issues on a
topic.
• It is a group meeting which has preplanned items for
discussion. The discussion can flow on multiple tracks
revolving around the issue. The conference coordinator or
the leader presents the connective link between these
different points of discussion.
• In sales training, conference method gives opportunity for
an all-round discussion veering around specific products or
services that sales trainees will sell in future.
• Sales management and territory management are also
discussed in the conference proceedings. The entire session
is controlled by a chairperson who sums up the discussion
in the conference.
3. Case Study
• Case study is a written description about a real life
or hypothetical selling situation or a sales problem
that is discussed in a classroom.
• The trainees have to sincerely listen to and
understand the various issues in the case. After this,
they need to relate to these issues with personal
selling concepts and principles which they have
already learnt before they take part in the case
study. The case discussion tries to highlight the
problem areas, diagnose the inputs of personal
selling discipline and offer solutions to the problems.
4. On-the-Job Training(OJT)
• In this method, the salesman is given the
opportunity of observing and performing the
selling job of a typical salesman.
• Keen observation and active participation are
two important aspects of learning the job.
• The trainer observes the performance of the
trainee. The trainer corrects him in case of need.
This method is also known as field training
method.
5. Audio-Visual Oriented Training
• These training methods are lively and interesting
demonstration of films, power points, audio cassettes,
videos, etc. It gives the trainees a chance to have a look
at the charts, graphs, tables, slides, talk show, buyer-
seller interaction, interview of a marketing expert or
consultant, a meeting session with the dealers, some
realistic buying-selling situations, etc.
• Video conferencing is becoming popular today and is
effective for long-distance communication. This training
method combines video presentations and computer-
aided questioning techniques.
7. Role Playing
• In role playing, an artificial environment of the realistic
sales situation is created and salespeople are asked to
sell a product to an imaginary prospect.
• Trainees are asked to assume the role of salespeople
and prospects in rotations. So, the trainees find an
opportunity to replicate the buying-selling session that
they will face in real-life situations.
• The objective is to develop skills in trainees in
managing and controlling the sales situations. Trainees
also learn to handle problems.
 Evaluation of training courses
1. Participants’ reactions to the training course.
Reactions are measures of how the sales
trainees feel about various aspects of a sales
training course.
2. Acquisition and retention of knowledge and
attitude change.
Acquisition and retention of knowledge can be
assessed by pen and paper tests when the
training objectives are the provision of
information
3. Changes in work behavior. Behaviour change
evaluations measure the extent to which
salespeople modify their job-related behaviour due
to sales training
4. Organizational outcomes. Six organizational sales
training objectives are often used:
• increased sales volume
• improved customer relations
• increased salesperson commitment leading to lower
levels of staff turnover
• decreased selling costs
• improved control of the sales force; and
• better time management.
Chapter Seven: Compensating
(Remunerating) Salespeople
After completing this chapter the student will be
able to
❖Identify the Need for Sound Remuneration Plan
❖To understand Functions of Compensation
(Remuneration) Plan
❖To understand the Importance of Compensation
❖Factors Affecting Remuneration Plan
❖To understand about the Methods of
Compensation
 What is compensation

• Compensation is defined as the money received by

employees from the organization on account of the
performance they render.
• When the employee receives the money in terms of
salary or wage, it is known as direct compensation.
When the employee receives benefits such as – health
insurance, medical benefits, travel allowances, etc.,
these are known as indirect compensations.
• Agarwala (2007) defined compensation as the sum
total of all forms of payments and rewards provided to
the employees for performing tasks to achieve
organizational objectives.
• Compensation is referred to as money and other
benefits received by an employee for providing
services to his employer.
 Need for Sound Remuneration Plan
Some of the most important qualities of a good
remuneration plan are as follows:
1. Provision for Adequate Income
It must be adequate to meet living expenses. Inadequate
payment makes salesmen to work elsewhere to earn extra
income.
2. Provision for Incentives
In order to encourage salesmen to perform job actively with
interest, they must be offered attractive incentives, such as
variable commission rates, fringe benefits, awards, bonus,
etc.
3. Flexibility
Remuneration plan must be flexible to absorb useful
changes. It must be changed periodically to suit with
dynamic environment.
4. Simplicity
Pay plan for sales force should be simple to design,
understand, and implement. It should not involve
unnecessary complexities leading to confusion or
misunderstanding.
5. Regularity
Remuneration must be paid regularly. Salesmen
must be paid as per the schedule fixed in advance.
6. Suitability
It must be suitable to company’s objective, policies,
current industry practices, and nature of job on one
hand, and expectations, tasks, qualifications,
experience, etc., of salesmen on the other hand.
7. Competitiveness
Salesmen’s remuneration plan must enjoy
competitiveness. It must be equal or more attractive
than the competitors to sustain salesmen’s interest
to work with the company.
8. Consideration of Legal Provisions
Remuneration plan must be formulated in
accordance with the legal provisions in force. It must
fulfill the legal conditions or norms.
9. Fair and Economic
Pay plan must be fair to both, company and
salesmen. It must not be beyond the ability of
company to pay. It must involve reasonable costs to
formulate and administer.
10. Provision for Security
Salesmen do not want only better pay but security,
too. They want job security. Along with their job
security, their feeling and self-respects must also be
secured.
11. Motivating Salesman
It must motivate salesmen to develop interest in job
and put maximum possible efforts. It must lead to
job satisfaction.
12. Attractiveness
Able, qualified, and experienced salesmen can be
attracted to work with the company. Similarly,
attractive remuneration plan ensures the stability in
sales force.
 Functions of Compensation (Remuneration) Plan
• Remuneration which is also called
compensation and wage/salary mostly
performs/ contributes to three critical aspects
of human resource management
I . Attracting capable candidates for jobs
II. Motivate the employees towards the
achievement of organizational
strategies/higher performance and
III. Retain the capable employees over a period
of long-term.
 Importance of Compensation
• Compensation is relevant to most other fields of
human resource management such as recruitment
and selection, training and development,
performance appraisal, incentives, industrial and
employee relations, promotion and separation and
outside intervention in human resource matters.
 Compensation is one of the most important
aspects of running a business that can make or
break a business.
Some of the benefits of providing the right
compensation package to your employees are:
• Attracts top talent
• Increases employee motivation at the workplace
• Boosts employee loyalty
• Increases productivity and profitability
• Improves job satisfaction and employee
engagement
• Helps in retaining top employee
 Factors Affecting Remuneration Plan
• Compensation level is influenced by a host of factors.
Some factors are internal in nature and others are
external.
Internal factors are company-specific that relate to
the company’s resources, abilities, policies, etc.
External factors are those that operate outside the
organization, i.e., the external environment that have
an effect on the compensation plans.
1. Internal factors
Among the internal factors which have an impact on
employee remuneration are A company’s financial
strength , company’s compensation policies ,
Recruitment and Selection Policy etc.
i. Financial Ability
A company’s financial strength should be such
that even in uncertain situations, it can adhere
to the compensation policies and pay
uniformly to all its employees.
ii. Compensation Policies
A company’s compensation policies are
determined by the number of employees
working, number of permanent employees,
number of casual staff, etc.
iii. Recruitment and Selection Policy
The compensation policies should take into account the
number of new employees inducted and the number
of employees that are retired or have left.
iv. Promotional Policy
Compensation plans should be consistent with various
managerial or non-managerial ranks and promotion
from one rank to the next should be coupled with
reasonable rise in salaries and other benefits.
v. Job Descriptions:
The volume of job (sales volume), its importance, and
characteristics are related to the compensation level
assigned to a job position.
vi. Job Evaluation
The worth of the job in terms of contributions
in financial terms to an organization is related
to the compensation level.
viii. An Employee’s Relative Contribution
merit of the employee is a decisive factor in
finalizing his pay package. A high performing
salesperson in a rank can deserve special
attention in terms of incentives or rewards.
2. External Factors
i. Economic Conditions:
These are important pay level determinants. It is
a customary practice in the industry circuit that
with the rise in inflationary conditions, the
companies escalate the level of the dearness
allowance so that the employees can cope up
with the rising price level.
ii. Legal Conditions
As companies operate within the legal frame of
governments, they need to strictly observe the
legal policies and regulations of the governments.
iii. Market Competition
It is a great trigger to manage employees tactically on
the compensation packages. Under highly
competitive situations, the companies deploy
strategies to sustain or survive in the chaotic
situation and here, skilled employees become valued
resources of the organization
iv. Trade Unions:
In small or medium-sized firms, trade unions
are generally non-existent and employees are
forced to swallow the salary or wage levels as
determined by the company.
v. Global Considerations
These are important when the company establishes any
subsidiary units in foreign nations or send their
employees abroad to work on international projects
or businesses.
It is essential, therefore, for the company to understand
the cost of living, tax structure, social or cultural
norms, etc., of a nation that has strong relationships
with compensation levels.
 Methods of Compensation
Remuneration plan must be attractive to attract
and motivate salesmen.
Using different components, various methods are
possible to suit different requirements of a
company and/or the expectations of salesmen.
There are main five methods
1. Straight Salary Method
2. Straight Commission Method
3. Salary plus Commission Method
4. Combination Plans
a. Salary and Bonus
b. Commission and Bonus
c. Salary plus Commission plus Bonus Method
d. Profit sharing
5. Point or Merit-Based Method
1. Straight Salary Method:
• It is the easiest of all remuneration plans and is the most
common method.
• Under this system, salesmen are paid a predetermined
amount, as a salary, generally at the end of every month.
• The amount is fixed and does not vary. There is a fixed
time-scale, with annual increments, for a continued
service.
• Generally, the amount consists of basic salary, dearness
allowance, and other allowances. Other amounts to meet
the business expenses will also be paid.
2. Straight Commission Method:
• This method is based on the result, and not on the basis
of time.
• The productivity i.e., volume of sales made by a salesman
is a basis for remuneration.
• The commission is calculated usually as a percentage on
total orders secured i.e., total value of sales.
• The rate of commission may be flat or differential.
Differential rates aim at lower commission up to a
standard performance and a higher rate over and above
the standard performance.
3. Combination of Salary and Commission
• The combination of salary and commission plan takes
the advantages of both the methods- Straight salary
method and straight commission method.
• This plan is the popular method of remuneration. Almost
all the salesmen are satisfied with a regular fixed salary,
because people want economic security. In this method,
a salesman gets a salary (fixed component) and a
commission (variable component) on the basis of sales
made.
4. Combination Plans:
In combination plan, various aspects are combined to
make remuneration plan more attractive. Bonus and
profit sharing are used with straight salary and/or
commission.
Combination plan involves combination of one or
more of following elements:
1. Salary and bonus
2. Commission and bonus
3. Salary plus commission plus bonus method
4. Profit sharing with salary, commission and/or bonus.
• What is BONUS?
• Remuneration to salesmen consists of fixed
salary/commission and bonus.
• Note that bonus is different than commission.
Bonus is paid over and above the usual salary
paid to salesmen. It is paid for achieving certain
results beyond specific limit.
• Commission is paid on the basis of volume of
sales while bonus is paid for fulfilling a certain
sale quota.
Salary plus Bonus:
Salary is a major part of remuneration and bonus is
only an incentive to perform certain tasks. It is
advantageous when a company wants to encourage
salesmen to perform certain tasks for short period of
time.
Commission plus Bonus:
Bonus is different from commission. The payment of
commission is based on the value of the sales. Bonus
is a financial incentive to the salesman. It is paid to
the salesman in addition to the remuneration.
Salary plus Commission plus Bonus:
Some companies may adopt this plan to make
remuneration plan more attractive.
Profit Sharing
This is not much popular mode of payment. It is not
a part of regular payment to salesmen. Profit
sharing is used occasionally or in exceptional cases.
Profit sharing can be linked with salary and bonus,
commission and bonus, or salary, commission and
bonus, or with any other combination.
• It is not obligatory on part of a company. It depends on
attitude and intension of management. If there is
adequate profit, and if the company wants to share the
profit with salesmen, profit sharing is possible. Normally,
a company shares certain per cent profit equally among
salesmen.
5. Point or Merit Based Method:
This is not a popular method. It is relatively a new
method to remunerate salesmen. Here, amount of
remuneration to be paid to salesmen depends on
merits, marks, or point the salesmen have obtained.
• Company fixes rate per merit/mark/point in advance
and communicate the same with salesmen. Opinion of
salesmen may be considered to decide the acceptable
rate or price of each unit. Amount of salary can be
arrived at by multiplying points with rate per point.