Those key issues are: * Low motivation and decreasing job satisfaction; * The lack of formal recruitment and selection process; * The lack of quantity and quality in training and development; * The missing role of Key Account Management in the sales operation; * The inappropriate sales team structure. Based on the analysis of key issues, the fully detailed recommendations are provided in the end of this report, following with an Action Plan and expected outcomes. Part 1: GSM Personnel Specification
AccuClean is in crucial need of a new General Sales Manager, who will be in charge of the sales team in all regions and report directly to the Managing Director, Peter Ward. Our company is facing several leadership problems and lack of focus in sales team. The new GSM is expected to bring the new fresh leadership style and able to manage the sales team in all regions to achieve the highest performance and long-term development. The personnel specification of GSM will be illustrated in details. Experience The new GSM is expected to have at least 7 to 8 years sales experience, preferably in B2B market (CPSA, 2012; Myjobs, 2012; Reed, 2012).
The experience in B2B sales market is very important for our company since our customers are ranging from small to large sized companies, and many of them are with us more than ten years. He/she has a minimum of 5 years experience in business management, marketing and sales strategies and planning, and financial oversight (Inc, 2012; Myjobs, 2012). With these experiences, the new GSM is able to diagnose the management problems within our sales operation, and bring in his/ her new approach in leadership style, in order to improve sales team’s performance as well as increase the motivation and satisfaction of sales people.
However, we should be very flexible in selecting candidates based on experience. If a candidate had excellent qualifications regarding his/ her education and 2-3 years experienced, we should not exclude him/ her from our shortlist. The requirement of sales experience is likely to cause a problem of excluding potential candidates (Jobber and Lancaster, 2006). Qualifications The candidate needs to have Bachelor degree of Business or Marketing Management (CPSA, 2012). The university degree is necessary since the good educational background will help the new GSM a lot in management.
Besides, the combination of education and experience for the GSM position is ideal for long-term development of our sales force. Required skills The new GSM is required to have excellent and proven oral communication skills (Inc, 2012). In addition, the candidate needs to prove his/ her skills in exceptional customer facing and interpersonal skills to enable difficult situations to be overcome successfully (JCT600, 2012). Communication skills are the most crucial qualities of sales people, especially sales manager (Jobber and Lancaster, 2006).
Furthermore, the new GSM should be able to create a workplace environment and culture that allows all the sales people in the team to develop and excel their jobs (JCT600, 2012). This requirement is essential since the current leadership style in our sales operation does not seem to work very well and need a crucial change and improvement. The potential candidate is able to negotiate effectively and at the highest level together with excellent numeracy skills and literacy skills (JCT 600, 2012). For both short-term and long-term development of our sales force, these skills are necessary.
Besides, the most two important basic qualities that a good sales person must have are empathy and ego drive (based on the study of Mayer and Greenberg, 1964, cited in Donaldson, 2007). Empathy is defined as “the important central ability to feel as the other fellow does in order to be able to sell a product or service” (Donaldson, 2007, p. 60). Ego drive is a desire to want and need to make a sale (Donaldson, 2007). Both of these basic qualities are a must for our potential GSM since in order to be a good sales manager, he/ she should be a good sales person.
Last but not least, we are looking for a new GSM with high motivation, ambition in sales, enthusiasm, full commitment, and ability to work under high pressure (Mathews and Redman, 2001, cited in Jobber and Lancaster, 2006). Part 2: Key issues and Recommendations 1. Introduction Part 2 is aimed to illustrate the key issues regarding our sales operation in AccuClean. The analysis based on our current situation and theory is presented for every issue. Recommendations are coming in the end of this report, followed by the Action Plan and expected outcomes.
All the key issues and recommendations are ordered according to its priority of taking urgent actions. Key issues 1. 1 2. 1 Motivation and job satisfaction Motivation is “the amount of effort that a salesperson expends on each activity or task associated with the job” (Donaldson, 2007, p. 230). Many factors are believed to cause positive motivation, such as monetary reward, workload, promotion, degree of recognition, supervisory behaviour, targets, and tasks (based on Adams’s inequity theory, Jobber and Lancaster, 2006).
In AccuClean, the first factor that causes the low motivation in the sales team is bonus system, which is perceived by many staffs as unfair. The bonus system in AccuClean is set based on achieving a sales figure above the individual sales target, starting from 5% above target sales with a bonus of 5% basic salary. Last year, only nine sales people out of 71 have been able to achieve the bonus, which gives the evidence about the inappropriate bonus system. In addition, the salary is based on individual negotiations when they joined the company, which might lead to unfairness between individual sales people in the team.
According to Vroom’s expectancy theory, it is assumed that “people’s motivation to exert effort is dependent upon their expectations for success” (Jobber and Lancaster, 2006). It means to what extent AccuClean sales people believe by working harder (increase effort), they will achieve 5% above target sales (high expectancy), and that higher sales will lead to higher salary – bonus of 5% of basic salary (high instrumentality), and higher salary is very important for them (high valence).
Moreover, during the merger, there were several sales staffs left to join competitors, which may result from the lack of motivations. According to Herzberg’s motivation- hygiene theory, working conditions and company policies are two of the hygiene factors, which cause dissatisfaction, thus, lead to low motivation (Donaldson, 2007). Bonus as money is the only type of rewards that is used in AccuClean, nevertheless, there are many more types of rewards that could also be applied, in order to motivate various types of sales people.
The suggested bonus system will be illustrated in the recommendation part in the end of this report. 2. 2 Recruitment and selection Bob Carter is in charge of the selection process for new sales people. However, he has no formal system for recruitment and selection as well as no job description. Formal selection process is crucially important to ensure the quality of sales persons, which can have a substantial effect on sales turnover (Jobber and Lancaster, 2006). Furthermore, hiring a sales person is very costly, much more than the basic salary.
Therefore, selecting the right person for the right position is essential, and can be achieved through setting up a formal selection procedure. Another problem is Carter’s way of selection – ‘he knows a good sales person as soon as he sees one’. This bias can harm the screening process, which is part of the recruitment process (see Appendix 5. 1). Either selecting the wrong person or dropping good persons is costly (Donaldson, 2007). Donaldson defines job description as the roles and duties attached to a specific position in the organization (2007).
It is necessary for AccuClean to prepare job descriptions for any new positions in the sales team, to ensure the responsibility of each team members, thus, no role ambiguity can occur. 2. 3 Training and development Training is one way for sales managers to improve the performance of the sales people under their controls, broadly to meet the company objectives (Donaldson, 2007). Training and development for sales people in AccuClean are lacked due to several reasons. Any trainings or development relies on the management style and differs in every ASM.
There is no formal training process since Carter believes that sales people learn best ‘on the job’. Indeed, there are many kinds of training, which includes individual on-the-job training as Carter’s opinion (Donaldson, 2007). However, good trainings can also be achieved through company-specific programs that are organized in a standardized and professional manner. The irregular and occasional training sessions, usually occur when introducing new products (currently in AccuClean), might lead to the lack of knowledge about products and new skill practices.
As the merger of one cleaning chemicals and the other in cleaning machinery, training should have been taken at the early stage of the merger, in order to support sales people in both companies about the company objectives and targets, the knowledge of different and new products, competitors and their products, selling procedure and techniques (Jobber and Lancaster, 2006). 2. 4 Key account management Area sales teams are responsible for all accounts regardless their size and importance.
The treatment for key accounts, medium-size accounts or small accounts is much dependent on each ASM’s view, its current mix of accounts in the area and experience. There are in fact 21 customers; each has accounts worth over ? 4 million. Those customers are important to our business and need to be prioritized as key accounts since the loss of even one of them would significantly cause a radical drop in sales and profits (Jobber and Lancaster, 2006). Key account management seems currently necessary, in order to serve our key customers with special treatment in all areas of marketing, administration, and service (Jobber and Lancaster, 2006).
In addition, key account management will help to develop a close relationship between our company as supplier and our customers, in order to enhance the communication and co-ordination between us, thus, create more in-depth penetration of DMU, which includes push and pull opportunities for buying decisions (Jobber and Lancaster, 2006). 2. 5 Sales team structure The sales territories of AccuClean, which are merely geographic based, have not been changed since the merger. Geographic structure is traditional and the most widely used type of sales organization in the UK.
It has several advantages such as simplicity, shorter journey times, low travel costs, and less potential for conflicts over responsibility (Donaldson, 2007). However, geographic structure has some drawbacks, which might influence to the effectiveness of the sales team and its management. Examples of disadvantages are the need to sell full range, broad expertise needed, and overhead costs for more layers of management evolved (Donaldson, 2007). In order for the sales team to work more productively and better management, it is necessary to make some changes concerning our sales team structure (see Recommendations, section 4).
The number of sales people in AccuClean is currently more than necessary, compared to the number of customers. Figure 1 illustrates the current sales people in each ASM as well as the actual needed sales people based on the number of customers in each area. Territory| Number of customers| Current number of sales people| Actual number of sales people| Spare sales people| Midlands| 1973| 26| 18| 8| South| 1545| 22| 14| 8| North| 1196| 16| 11| 5| Scotland/ North Ireland| 499| 7| 5| 2| UK total| 5264| 71| 47*| 24*|
Figure 1: Number of Sales people (* approximate number) 1 2 Conclusion Five key issues that have been listed and analyzed above are low motivation and decreasing job satisfaction, informal recruitment and selection process, unstandardized and the lack of regular training, the lack of key account management, and the ineffective sales team structure. Those issues are the most urgent in AccuClean that need to be solved as soon as possible, in order to improve the sales team to work more effectively. Recommendations 4. 1 Change the reward system
Bonus (monetary reward), which is the only form of reward using in AccuClean, shows its limitation, therefore, improving the bonus system is crucial. The starting point of 5% should be set lower and dependent on different products and accounts. There should also be other chances to get commission, which can be based on the annual sales revenue and profits. In addition to the monetary reward, AccuClean can apply many other types of rewards such as promotion or workload (based on Adam’s inequity theory, Jobber and Lancaster, 2006).
Not all sales people highly value money; some of them might place higher value on promotion, responsibility or recognition. Thus, the variable of rewards will motivate different type of sales people, in order to maximize the expectancy and value of reward (Vroom’s expectancy theory, Jobber and Lancaster, 2006). A study of sales force practices by Chartered Institute of Marketing showed that sales people are mostly motivated by individual meetings with supervisor to discuss career, job problems, etc. The second ranked motivating factors is ‘regular accompaniment in the field by the sales manager’ (Jobber and Lancaster, 2006).
These methods of improving leadership style should be aware by ASMs and higher management. 4. 2 Set up the formal recruitment and selection process The formal recruitment process is proposed as below (according to Jobber and Lancaster, 2006, p. 384). Bias in selecting applicants should be minimized by carefully preparing job description and personal specification. Of course, the experience of employer should be used during the selection process. However, those five steps above should be strictly followed to avoid any mistakes during recruitment. 4. Set up a standardized training Good training programs will help to equip our sales people with sufficient knowledge and skills. Besides, it plays as a motivation factor for sales people and positively influences the job satisfaction. 4. 3. 1 When should our company train our sales employees? According to Donaldson (2007, p. 208), the training should be held properly when: * New sales person is recruited * A sales person takes on a new territory * New products * New business, new market segments * Company new policies or procedure * Selling habits are poor or inappropriate An individual is being considered for promotion The sales techniques are very important to train all sales people in the organization (69% of North European firms providing sales techniques training). The market and customer knowledge is also essential in training (42% of firms providing this, based on Roman and Ruiz, 2003, cited in Donaldson, 2007). 4. 3. 2 Who should do the training? Sales trainer can be senior managers (i. e. ASMs, GSM), technical specialists (from Production department), external specialists, or inside experienced sales people (i. e. from other ASMs).
In many cases, training is more likely to be provided by inside company specialists, who not only have the best understanding about the organization and individual needs, but also can tailor training programs to suit both internal and on-the-job requirements (Donaldson, 2007). 4. 3. 3 Where should training be done? The training can be organized in internal single location (different ASMs), a centralized external location or a decentralized location (on the job). It depends on the purpose of training and variable factors to decide where to hold the training.
Below is the nine possible options that are proposed by Donaldson (2007, p. 210). 4. 3. 4 What methods of training should be used? Lectures, films, role playing, case studies, or in-the-field training are options of training methods (Jobber and Lancaster, 2006). Each has its advantages and limitations. The point is how to use them properly for different training purposes, in order to achieve the best results and highest satisfaction of participants. 4. 4 Restructure the sales team with the new role of KAM New proposed sales team structure is presented in Figure 2 with two radical changes. ASM North and ASM Scotland will be combined into Regional Sales Manager of North and Scotland * Key Account Manager is added to our sales team structure as one independent function Figure 2: Sales Team Structure (proposed) The Regional Sales Managers are formed to ensure the number of sales people is interrelated to the number of customers in each region. The number of customers in the North and Scotland, which is 1196 and 499 respectively, is much fewer than the number of customers in Midlands and South (1973 and 1545 respectively).
Therefore, it is appropriate to merge two ASMs North and Scotland together, in order to enhance the performance in the broader area, and increase the influence on organization’s decision-making of sales people in the North and Scotland area. The Key Account Manager is added to be in charge of all key accounts in the whole UK. KAM’s responsibility is to manage all sales people, who are managing those key accounts in different regions. Moreover, KAM is also responsible for potential key accounts and complex DMUs. The communication and leadership style are crucially important to be successful in managing sales people in different areas.
Monthly meeting can be organized and the advanced record system (computer based) should be built up to develop the whole sales team’s communication flows in long-term. This proposed sales team structure is based on all forms of selling simultaneously: KAM for very big accounts, general territory representatives (Regional Sales Managers) for the medium and small- sized accounts (Jobber and Lancaster, 2006). The number of sales people in AccuClean is currently more than necessary, as calculation based on the current number of customers. In fact, it is difficult to get rid of 24 sales people at once, and should not be done in that way.
AccuClean can evaluate sales people in the whole company by their performance, motivation and achievement in past years. In a period of 12 months, it is expected to dismiss six sales people. After two years, 12 sales people in total will be fired. AccuClean may attract more customers in the future and need more sales people; therefore, it is dependent on the situation at the time to decide how many more sales people have to leave. 4. 5 Action Plan 4. 6 Expected Outcomes Limitations The merger of two ASMs North and Scotland into one Regional Sales might cause problem in the p of control.
The new RSM will manage 20-23 sales people, which might lead to the role ambiguity and lack of coaching and supervision. The Action Plan illustrates many tasks that need to complete in the first year, thus, it might be very challenging in the first year for the new GSM. It is a tough decision to fire some sales people in the next two years. It might cause several problems within the sales team concerning rumours or miscommunication. Therefore, it is necessary to have a serious evaluation based on a formal checklist and consultancy from different people in the team.
Furthermore, the training needs to be held at the beginning of the year, to inform the sales team about new changes, thus, reduce miscommunication. Bibliography CPSA (2012) Sales Manager Job description [Online]. Available from :< http://www. cpsa. com/pdf/src/tools/Sample%20Sales%20Manager%20Job%20Description. pdf> [Assessed 16 December 2012]. Donaldson, B. (2007) Sales Management. 3rd ed. NewYork: Palgrave MacMillan. Inc (2012) General Manager Job description [Online]. Available from :< http://www. inc. com/tools/general-manager-job-description. html> [Assessed 16 December 2012].
JCT 600 (2012) General Sales Manager Job description [Online]. Available from :< http://www. jct600. co. uk/data/cm/careers/1028. pdf> [Assessed 16 December 2012]. Jobber, D. And Lancaster, G. (2006) Selling and Sales Management. 7th ed. England: Pearson Education Limited. Myjobs (2012) Senior Sales Manager (Oil Machinery) [Online]. Available from :< http://myjobs. classifiedpost. com/index. php/Job-Search/ENGINEERING-GENERAL-BUSINESS-DEVELOPMENT-ACCOUNT-MANAGEMENT-Job-Description/SENIOR-SALES-MANAGER-OIL-MACHINERY/597925> [Assessed 16 December 2012]. Reed (2012) General Manager – Milton Keynes [Online].
Available from :< http://www. reed. co. uk/jobs/general-manager-milton-keynes/22306659#/jobs/general-sales-manager-in-milton-keynes> [Assessed 16 December 2012]. Appendices 3 4 7. 1 The recruitment process 7. 2 Sales people calculation The Figure 1 calculation will be illustrated in details as below. Based on: Number of sales people = (Number of customers x Number of call pa) / (number of calls per day x Number of working days per year) Suppose there are 225 work days per year, 12 times calling per customer per year (once a month) Each sales person supposes to make 40 calls per week, 10 of those are to be made to prospects.
Therefore, each sales person has to make: (40-10)/5 = 6 calls per day. * Number of sales people in Midlands = (1973 x 12) / (6 x 225) = 18 * Number of sales people in South = (1545 x 12) / (6 x 225) = 14 * Number of sales people in North = (1196 x 12) / (6 x 225) = 11 * Number of sales people in Scotland/ North Ireland = (499 x 12) / (6 x 225) = 5