Marketing Insights From a to Z: 80 Concepts Every Manager Needs to Know

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Marketing Insights from A to Z

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ales Force
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About 11 percent of all employed people, or 18 million people, are
engaged in selling. The emergence of the Internet and other direct
marketing techniques, along with the high cost of personal selling, is
leading companies to reexamine the size and role of their sales forces.
Are salespeople necessary? According to Peter Drucker: 
“Peo-
ple are simply too expensive to be used for selling. We cannot, by
and large, sell anymore—we must market, i.e., we must create
the desire to buy which we then can satisfy without a great deal
of selling.”
Companies don’t always need their own sales forces. About 50
percent of companies use contract sales forces: manufacturers’ reps,
sales agents, and so on. Many companies hire outside salespeople to
handle more marginal geographical areas and market segments.
In hiring salespeople, you should hire only those who are sold
on the company and its products. This is hard to fake. And you
might prefer people who have failed, rather than those who never
tried. And don’t hire any salesperson whom you wouldn’t want to in-
vite to your home for dinner.
In deciding on how much to pay salespeople, remember that
low-paid salespeople are expensive, and high-paid salespeople are

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cheap. Top salespeople in a company often sell five times as much as
the average salesperson but don’t get paid five times as much.
Salespeople need to be motivated, much like football players
huddled in a locker room. The real talent is to be able to motivate
the average salesperson, not just the star performers.
Watch out for the salesperson who thinks any sale is good no
matter what its profitability. Tie compensation to the profit on the
sale, not to the revenue. Each salesperson should see himself or her-
self as managing a profit center, not a sales center, and be rewarded
accordingly.
Here are other measures to look at in judging a salesperson’s per-
formance: 
average number of sales calls per day
,
average sales-call time per
contact
,
average cost and revenue per sales call
,
percentage of orders per
hundred sales calls
, and 
number of new and lost customers per sales period
.
Then compare this salesperson’s performance to the average salesper-
son’s performance to detect poor or exceptionally good performance.
Poor performance is often excused by saying the market is ma-
ture. But calling a market “mature” is evidence of incompetence. It is
probably easier to make money in a mature industry than in a high-
tech industry, to take an extreme case.
The hardest job facing a salesperson is to tell a customer that a
competitor has the better product. IBM expects its sales reps to rec-
ommend the best equipment for an application, even if this means
recommending a competitor’s hardware. But the sales rep will win
the customer’s respect and eventually his or her business.
Marketing’s role is to support the sales force in the following
ways:
• Marketing places ads and buys lists to identify new prospects.
• Marketing prepares a profile of the best prospects so that
salespeople know who to call on and who not to call on.
• Marketing describes the buying influences and rationales used
by key customer decision makers.