Question

Explain why MP analysis is easier to apply to the sales force than middle managers.

Answer 1

1) The sales force represents a significant investment for most businesses. By current estimates, there are at least 20 million people involved in sales in the United States. About 3.6 million salespeople are involved in business-to-business selling (Bureau of Labor Statistics 2006), another 4.3 million are involved in retail sales (Bureau of Labor Statistics 2006), and over 15 million participate in direct-to-consumer sales for organizationssuch as Avon and Amway (“America’s 500 Largest Sales Forces 2006, p. 73). This sales force investment can be as high as 40 percent of sales, with the average company spending about 10 percent (Heide 1999). In total, the U.S. economy spends conservatively $800 billion on sales forces each year—close to three times the $285 billion that Robert J. Coen, Senior Vice President of Forecasting for Universal McCann, estimates was spent on advertising in 2006 (Johnson 2006)

2) The significance of the sales force goes beyond its cost. The sales force is perhaps the most highly empowered organization within many companies .Usually working alone and unsupervised, salespeople are entrusted with a company’s most important asset—its customers. Because of the sales force’s critical impact on customer relationships, its effect on top-line performance is significant. Sales leaders agree that every sales force has the opportunity to improve sales revenues through enhanced sales force effectiveness—projected increases of at least 10 percent are common. Most companies take a keen.

3) Despite a strong level of corporate attention, the concept of “sales force effectiveness” is not well defined, having different meanings for different people. A vice president of sales might view effectiveness as “adding value to the customer beyond the product by changing the sales process from transactional to consultative.” A sales compensation analyst might view it as“increasing sales force morale and motivation through better incentive compensation programs.” A sales training manager might view effectiveness as “increasing salesperson competency through innovative training programs.” A finance manager might view it as “increasing sales per salesperson” or “holding sales force costs below a benchmark percentage of sales.”As sales leaders struggle to define sales force effectiveness and make improvements that increase the bottom line, there is considerable opportunity for research. Surprisingly, there has historically been less academic focus on sales than one mightexpect. The Journal of Personal Selling & Sales Management isthe only academic journal focusing primarily on sales force issues. An electronic search of articles published in this journal between 2001 and 2006 reveals that over 82 percent of the articles are directly related to sales. An electronic search of other scholarly marketing journals for the same time period, including Marketing Science,Journal of Marketing, and Journal of Marketing Research, shows that less than 4 percent of articles are sales related. Sales-related articles were identified by search ing on relevant subject key words, such as “salespeople,” “sales management,” and “personal selling.