Establish Responsibility

An MBA student at the authors’ school was recently recruited for a sales job with a major software company. She was interviewed extensively, not only by the sales manager (her prospective supervisor) but also by higher-level executives in the firm, including a regional vice president of marketing. All this attention from top-level managers surprised the candidate. She asked, “Is it common for so many executives to be involved in recruiting new salespeople?”

The student’s question raises the issue of who should have the primary responsibility for recruiting and selecting new salespeople. The way a company answers this question typically depends on the size of the sales force and the kind of selling involved. In firms with small sales forces, the recruitment and selection of new people is a primary responsibility of the top-level sales manager. In larger, multilevel sales forces, however, attracting and choosing new recruits is usually too extensive and time consuming for a single executive. Authority for recruitment and selection is commonly delegated to lower-level sales managers or staff specialists.

In some firms, members of the human resources department (or outside HR specialists) instead of the sales management staff assist and advise sales managers in hiring new salespeople. This approach helps reduce duplication of effort and avoids friction between the sales and HR departments. One disadvantage is that HR specialists may not be as knowledgeable about the job to be filled and the qualifications necessary as a sales manager. Even when the HR department or outside specialist helps attract and evaluate applicants, the sales manager typically has the final say in whom to hire.

Finally, when the firm sees its sales force as a training ground for sales and marketing managers, either HR executives or other top-level managers may participate in recruiting to make sure the new hires have management potential. This was the situation in the firm that interviewed our MBA student. Although it offered her “just a sales job,” company executives saw that job as a stepping stone to management responsibilities.

Analyze the Job and Determine Selection Criteria

Research relating salespeople’s personal characteristics to sales aptitude and job performance suggests there is no single set of traits and abilities sales managers can use to help them decide which recruits to hire. Different sales jobs require different activities, and people with different personality traits and abilities should be hired to fill them. The first activities in the recruitment and selection process thus should be the following:

1. Conduct a job analysis to determine what activities, tasks, responsibilities, and environmental influences are involved in the job to be filled.
2. Write a job description that details the findings of the job analysis.
3. Develop a statement of job qualifications that describe the personal traits and abilities a person should have to perform the job.

Most companies, particularly larger ones, have written job descriptions for sales positions. Unfortunately, those job descriptions are often out of date and do not accurately reflect the current scope and content of the positions. The responsibilities of a given sales job change as the customers, the firm’s account management policies, the competition, and other environmental factors change. When this happens, companies need to conduct new analyses and update descriptions to reflect those changes. When firms create new sales positions new tasks also need to be identified.

Consequently, a critical first step in the hiring process is for management to make sure the job to be filled has been analyzed recently and the findings have been written out in great detail. Without a detailed, up-to-date description, the sales manager will have difficulty deciding what kind of person is needed and prospective recruits will not really know what is expected of them. Consider Ethical Dilemma #1 and the challenges companies face in identifying the right kind of candidates.

Job Analysis and Determination of Selection Criteria. Information about each selling job’s content should come from two sources: (1) the current occupant of the job, and (2) the sales manager who supervises that person.

Current job occupants should be observed and/or interviewed to determine what they actually do. Sales managers at various levels should be asked what they think the job occupant should be doing in view of the firm’s strategic sales program and account management policies. It is not uncommon for the person who analyzes a job to discover the salespeople are doing extra work that management is not aware of and slacking off on some activities management believes are important. Such misunderstandings and inaccurate role perceptions illustrate the need for accurate, detailed job descriptions.¹

Job Descriptions. Job descriptions written to reflect a consensus between salespeople and their managers can serve several useful functions. In addition to guiding the firm’s recruiting efforts, they can guide the design of a sales training program that will provide new salespeople with the skills to do their job effectively and improve their understanding of how the job should be done. They can also serve as standards for evaluating each salesperson’s job performance, as discussed in chapter 13.

In many companies there are a variety of sales positions. Some may not even include the word “sales” in the job title. Go to Monster.com and type in “sales” and you will find hundreds of job listings. Note that each description spells out many of the items identified below and require a variety of different skills and experience. Detailed job descriptions, such as those you see on Monster.com, tell both the company and the potential salesperson exactly what the expectations are before employment, which vastly increases the rep’s chances of success.

Good job descriptions of sales jobs typically identify the following dimensions and requirements:

1. The nature of product(s) or service(s) to be sold.
2. The types of customers to be called on, including policies concerning how often calls are to be made and the personnel within customer organizations who should be contacted (e.g., buyers, purchasing agents, plant supervisors).
3. The specific tasks and responsibilities to be carried out, including planning tasks, research and information collection activities, specific selling tasks, other promotional duties, customer servicing activities, and clerical and reporting duties.
4. The relationships between the job occupant and other positions within the organization. To whom does the job occupant report? What are the salesperson’s responsibilities to their immediate superior? How and under what circumstances does the salesperson interact with members of other departments, such as production or engineering?
5. The mental and physical demands of the job, including the amount of technical knowledge the salesperson should have concerning the company’s products, other necessary skills, and the amount of travel involved.
6. The environmental pressures and constraints that might influence job performance, such as market trends, the strengths and weaknesses of the competition, the company’s reputation among customers, and resource and supply problems.

Determining Job Qualifications and Selection Criteria. Determining the qualifications of a prospective employee is the most difficult part of the recruitment and selection process. The problem is that nearly all these characteristics play at least some role in choosing new salespeople. No firm, for instance, would actively seek sales recruits who are unintelligent or lacking in self-confidence. At the same time, not many job candidates will possess high levels of all desirable characteristics. The task, then, is to decide which traits and abilities are most important for which job and which are less critical. Also, some thought should be given to trade-offs among the qualification criteria. Will a person with a deficiency in one important attribute still be considered acceptable if he or she has outstanding qualities in other areas? For example, will the firm want someone with only average verbal ability and persuasiveness if that person has a great deal of ambition and persistence?

Deciding on Selection Criteria. Simply examining the job description can assist decision makers looking for key qualifications in new salespeople. If the job requires extensive travel, for instance, management might prefer applicants who are younger, have few family responsibilities, and want to travel. Similarly, statements in the job description concerning technical knowledge and skill can help management determine what educational background and previous job experience to look for when selecting from a pool of candidates.

Larger firms go one step further and evaluate the personal histories of their existing salespeople to determine what traits differentiate between good and poor performers. This analysis seldom produces consistent results across different jobs and different companies. It can produce useful insight, however, when applied to a single type of sales job within a single firm. The assumption is that there may be a cause-and-effect relationship between such attributes and job performance. If new employees have attributes similar to those of people who are currently performing the job successfully, they may also be successful.² Another compelling reason to analyze personal history is to validate the selection criteria the firm is using, as required by government equal employment opportunity regulations.

Find and Attract Applicants

This is one area where some firms do not spend enough time and money. They attempt to hold down recruiting costs in hopes that a good training program can convert marginal recruits into solid sales performers. Unfortunately, several determinants of sales success are difficult or impossible to change through training or experience. Therefore, spending the money and effort to find well-qualified candidates can be a profitable investment. In certain industries finding enough qualified individuals can be a challenge. For example, the life insurance industry reports that it must interview 60 to 120 people to find one good hire.³

In view of the difficulties in attracting qualified people to fill sales positions, a well-planned and well-implemented recruiting effort is usually a crucial part of the firm’s hiring program. The primary objective of the recruiting process should not be to maximize the total number of job applicants. Too many recruits can overload the selection process, forcing managers to use less thorough screening and evaluation procedures. Intel, for example, receives thousands of applications every day. Besides, numbers do not ensure quality. The focus should be on finding a few good recruits.

Self-selection by prospective employees is the most efficient means of selection, so the recruiting effort should discourage unqualified people from applying. For example, many companies recruit via the Internet. Companies like Cisco Systems and Amazon have a screening procedure by which candidates can provide certain key pieces of data about themselves and the company will search its job openings to look for a match.

Recruiting communications should point out both the attractive and unattractive aspects of the job to be filled, spell out the required qualifications, and state the likely compensation. This will encourage only qualified and interested people to apply for the job. Also, recruiting efforts should focus only on sources where fully qualified applicants are likely to be found.

Internal Sources. Sales managers go to a number of places to find recruits or leads on potential recruits. Internal sources are people already employed by the firm, while external sources include people in other firms (who are often identified and referred by current members of the sales force), advertisements, recruiting agencies, educational institutions, and the Internet.

When the job involves technical selling that requires substantial product knowledge and industry experience, firms focus more heavily on employees in other departments within the company and on personal referrals of people working for other firms in the industry.⁴ Surveys suggest that more than half of U.S. manufacturers hire at least some of their salespeople from other internal departments.

Recruiting current company employees for the sales force has distinct advantages:

1. Company employees have established performance records, and they are more of a known quantity than outsiders.
2. Recruits from inside the firm should require less orientation and training because they are already familiar with the company’s products, policies, and operations.
3. Recruiting from within can bolster company morale, as employees become aware that opportunities for advancement are available outside of their own department or division.

External Sources. Although it is a good idea to start with internal sources when recruiting new salespeople, most of the time there will not be enough qualified internal candidates to meet the needs of a firm’s sales force. As a result, the vast majority of companies must expand the search to include external sources like people from other firms, ads, professional recruiting agencies, educational institutions, and the Internet.

All of the recruiting issues faced by sales managers are magnified as companies expand globally and seek to hire salespeople in new international markets. Cultural differences, language barriers, and legal restrictions create additional concerns about hiring the right people for the sales position. The key is for a company to do its homework and research each new market before deciding to enter it. For example, in many European countries it is much more difficult to terminate the contract of an employee than in the United States, so it’s even more crucial to hire the right people. It is important for a company to understand the legal requirements of hiring new salespeople.

REFERRAL OF PEOPLE FROM OTHER FIRMS. In addition to being potential sales employees themselves, company personnel can provide management with leads to potential recruits from outside the firm. Current salespeople are in a good position to provide leads to new recruits. They know the requirements of the job, they often have contacts with other salespeople who may be willing to change jobs, and they can do much to help “sell” an available job to potential recruits. Consequently, many sales managers make sure their salespeople

are aware of the company’s recruiting needs. Some companies offer bonuses as incentives for their salespeople to recruit new prospects. Referrals from current employees must be handled tactfully to avoid hard feelings if the applicant is rejected later. The question of whether a firm should recruit salespeople from its competitors is controversial. Such people are knowledgeable about the industry from their experience; however, there are some disadvantages. Global Connection highlights the pros and cons of hiring salespeople from the competition.

ADVERTISEMENTS. A less selective way to attract job applicants is to advertise the position. When a technically qualified or experienced person is needed, an ad might be placed in an industry trade or technical journal. More commonly, ads are placed on specific industry or trade websites. For example, organizations like the American Management Association provide a service to members that posts available professional as well as academic positions to attract applicants. A well-written ad can be very effective for attracting applicants—though that is not necessarily a good thing. When a firm’s ads attract large numbers of applicants who are unqualified or only marginally interested, the firm must engage in costly screening to separate the wheat from the chaff.⁵

PROFESSIONAL RECRUITING AGENCIES. While employment agencies are sometimes used to find recruits, often for more routine sales jobs like retail sales, relationship selling usually requires more sophisticated outside professionals. These agencies specialize in finding applicants for more demanding sales jobs. When the company clearly understands the demands of the job and knows the kind of candidates it is looking for, these organizations can be helpful.

EDUCATIONAL INSTITUTIONS. College and university placement offices are a common source of recruits for firms that require salespeople with high intelligence or technical backgrounds. Most educational institutions allocate resources to “career management” departments that help graduates develop their careers. Educational institutions are an effective source when the sales job is viewed as a first step toward a career in management. Good grades are at least some evidence the person can think logically, budget time efficiently, and communicate reasonably well.

But college graduates generally have less selling experience and are likely to require extensive orientation and training in the basics of salesmanship. Also, college-educated sales recruits tend to “job hop” unless their jobs are challenging and promotions are rapid. One insurance company stopped recruiting college graduates when it found that they did not stick around very long. Such early turnover is sometimes more the fault of the company than of the recruits. When recruiters paint an unrealistic picture of the demands and rewards of the job, or when they recruit people who are overqualified, high turnover is often the result.⁶

Junior colleges and vocational schools are another source of sales recruits that has expanded rapidly in recent years. Many such schools have programs explicitly designed to prepare people for selling careers. Firms that recruit from such programs do not have to contend with the negative attitudes toward selling they sometimes encounter in 4-year college graduates.

THE INTERNET. The most common source for applications is now the Internet. Younger candidates are as comfortable submitting applications over the Internet as they are filling them out on paper. By targeting the Internet application to specific job postings, the company can direct the information to the right people very efficiently. For example, Internet applications to Dell include a unique job reference and number so that the information can be sent to the right people at a specific geographic location.

While the use of the Internet to recruit salespeople is clearly increasing, the unique aspects of the sales position coupled with the need to meet and interview individuals in person make it a difficult tool for recruiting purposes. However, it makes a good screening device since a large number of applications can be processed easily. Companies like Apple receive thousands of applications every day for positions throughout the company. The Internet can process these applications to the right people efficiently and effectively.

Develop and Apply Selection Procedures

After the job qualifications have been determined and some applicants have been recruited, the final task is to determine which applicants best meet the specifications and have the greatest aptitude for the job. To gain the information needed to evaluate each prospective employee, firms typically use some combination of the following selection procedures:⁷

1. Applications
2. Personal interviews
3. Reference checks
4. Psychological tests:
   1. Intelligence
   2. Aptitude
   3. Personality

Research into these selection tools has found that composites of psychological test scores are the best predictors of a potential salesperson’s future job performance. Evaluations based on personal interviews are the worst.⁸ Surprisingly, the way firms actually use the various selection tools is not consistent with their demonstrated validity. Almost all companies use personal interviews, while psychological tests are the least used selection tool—although their use is increasing again. Large firms are somewhat more thorough in the use of psychological tests—and the development of detailed job descriptions—than smaller firms. As organizations continue to focus on ethical business decision making and behavior research suggests that evaluating potential salespeople on several important dimensions such as empathy can be a good indicator of their individual ethics.⁹

Some of the practical advantages and limitations of the various tools are discussed next.

Applications. Although professional salespeople often have résumés to submit to prospective employers, many human resources experts believe a standard company application form makes it easier to assess applicants. A well-designed application blank obtains the same information in the same form from all candidates. The primary purpose of the application form is to provide decision makers with sufficient information to make an informed decision about the applicant. Relevant information such as business experience can be very helpful in evaluating candidates. They can also screen for basic qualifications such as educational experience. A second function of the application form is to help managers prepare for personal interviews with job candidates. A study at one pharmaceutical firm found that common application information—such as candidates’ tenure in their previous jobs and their amount of sales experience— was able to distinguish salespeople likely to stay with the hiring company from those who were more likely to quit.¹⁰

Personal Interviews. In addition to probing the applicant’s history, personal interviews reveal insights into the applicant’s mental abilities and personality. A manager can assess a candidate’s communication skills, intelligence, sociability, aggressiveness, empathy, ambition, and other traits the job demands. Different managers use many different interviewing approaches to accomplish these objectives. The primary methods for conducting personal interviews can all be classified as either structured or unstructured. In structured interviews, each applicant is asked the same predetermined questions. This approach is particularly good when the interviewer is inexperienced at evaluating candidates. At the other end of the spectrum of interviewing techniques is the unstructured interview, which seeks to get the applicant talking freely on a variety of subjects. The interviewer asks only a few questions to direct the conversation to topics of interest, such as the applicant’s work experience, career objectives, and outside activities. The rationale for this approach is that allowing the applicant to talk freely yields significant insight into his or her character and motivations. The interviewer is free to spend more time on topics where the applicant’s responses are interesting or unusual.

Regardless of what interviewing techniques are used, more managers rely on interviews than any other selection tool to evaluate sales candidates. Yet there is evidence that evaluations based on personal interviews are among the least valid predictors of job performance. Does this mean many firms are doing a less than optimal job of evaluating and selecting new salespeople? Are there ways to improve the accuracy of impressions gained from interviews? These questions are explored in Exhibit 12.3.

As part of the interview process, companies may employ a realistic job preview, a process of having the recruit work with a salesperson in order to learn more about the job. Often this involves an assessment of the candidate after the job preview. In addition, the realistic job preview gives the candidate the opportunity to see what the job is really like before they accept the position

REQUIREMENTS FOR INTERVIEWS AND APPLICATIONS. Because it is illegal to discriminate in hiring on the basis of race, sex, religion, age, or national origin, a firm should not ask for such information on its job application forms or during personal interviews. It is wise to avoid all questions in any way related to such factors. Then there will be no question in the applicant’s mind about whether the hiring decision was biased or unfair. This is easier said than done, however, because some innocent questions can be viewed as attempts to gain information that might be used to discriminate against a candidate. Exhibit 12.4 offers guidelines concerning the kinds of illegal or sensitive questions managers should avoid when conducting employment interviews and designing application forms.

Reference checks. If an applicant passes the face-to-face interview, a reference check is often the next step. Some sales managers question the value of references because “they always say nice things.” However, with a little resourcefulness, reference checks can be a valuable selection tool.

Checking references can ensure the accuracy of factual data about the applicant. It is naive to assume that everything a candidate writes on a résumé or application form is true. Facts about previous job experience and college degrees should be checked. The discovery of false data on a candidate’s application raises a question about basic honesty as well as about what the candidate is trying to hide. References can

supply additional information and opinions about a prospect’s aptitude and past job performance. Calling a number of references and probing them in depth can be time consuming and costly, but it can also produce worthwhile information and protect against expensive hiring mistakes.¹¹

Psychological Tests. A final set of selection tools used by many firms consists of tests aimed at measuring an applicant’s mental abilities and personality traits. The most common tests are intelligence, aptitude, and personality tests. Within each category, there are a variety of different tests used by different companies.

INTELLIGENCE TESTS. Intelligence tests are useful for determining whether an applicant has sufficient mental ability to perform a job successfully. Sales managers tend to believe these are the most useful tests for selecting salespeople. General intelligence tests are designed to measure overall mental abilities by examining how well the applicant comprehends, reasons, and learns.

APTITUDE TESTS. Aptitude tests are designed to determine whether an applicant has an interest in, or the ability to perform, certain tasks and activities. This can determine whether applicants’ interests are similar to those of people who are successful in a variety of different occupations, including selling. Other tests measure abilities, such as mechanical or mathematical aptitude, that might be related to success in particular selling jobs.

One problem with at least some aptitude tests is that, instead of measuring a person’s innate abilities, they measure his or her current skill level at certain tasks. At least some skills needed for successful selling can be taught, or improved, through a well-designed training program. Rejecting applicants because they currently do not have the necessary skills can mean losing people who could be trained to be successful salespeople.

PERSONALITY TESTS. Many general personality tests evaluate an individual on numerous traits. The Myers Briggs Personality Type, for instance, measures 16 traits such as extroversion, sensing, thinking, and judging. Such tests, however, contain many questions, require substantial time to complete, and gather information about some traits that may be irrelevant for evaluating future salespeople.

More limited personality tests have been developed in recent years that concentrate on only a few traits thought to be directly relevant to a person’s future success in sales.¹² The Multiple Personal Inventory, for example, uses a small number of “forced-choice” questions to measure the strength of two personality traits: empathy with other people and ego drive.

CONCERNS ABOUT THE USE OF TESTS. During the 1950s and early 1960s, tests—particularly general intelligence and sales aptitude tests—were widely used as selection tools for evaluating potential salespeople. However, due to legal concerns and restrictions posed by civil rights legislation and equal opportunity hiring practices, use of these tests was cut back until recently. Current evidence suggesting that properly designed and administered tests are a valid selection tool has spurred anincrease in their popularity.¹³ Despite the empirical evidence, however, managers continue to be wary of tests, and many firms do not use them. There are a number of reasons for these negative attitudes. For one thing, despite the evidence that tests are relatively accurate, some managers continue to doubt their validity for predicting the success of salespeople in their specific firm. No mental abilities or personality traits have been found to relate to performance across a variety of selling jobs in different firms. Thus, specific tests that measure such abilities and traits may be valid for selecting salespeople for some jobs but invalid for others.

Also, tests for measuring specific abilities and characteristics do not always produce consistent scores. Some commercial tests have not been developed using the most scientific measurement procedures, so their reliability and validity are questionable. Even when a firm believes a particular trait, such as empathy or sociability, is related to job performance, there is still a question about which test should be used to measure that trait.

Another concern about testing involves the reactions of the subjects. A reasonably intelligent, test-wise person can fudge the results of many tests by giving answers he or she thinks management wants rather than answers that reflect the applicant’s feelings or behavior. Also, many prospective employees view extensive testing as a burden and perhaps an invasion of privacy. Therefore, some managers fear that requiring a large battery of tests may turn off candidates and reduce their likelihood of accepting a job with the firm.

Finally, any test that discriminates between people of different races or sexes is illegal. Some firms have abandoned the use of tests rather than risk getting into trouble with the government. Exhibit 12.5 outlines some guidelines for the appropriate use of tests.

As you can see, the process of recruiting and selecting the right salesperson is complex and requires a great deal of analysis and insight. Keep in mind that sales managers must balance the time needed to recruit and select salespeople with their other job demands. While the process is time consuming, sales managers understand the importance of selecting the best individual for the job.

Improve Customer Relationships

As we have discussed, building successful sales relationships is difficult and requires a significant commitment from salespeople and their company. One benefit of effective sales training is continuity in customer relationships. Having the same salesperson call on a given customer for an extended period of time can enhance the relationship between the company and the customer, especially when the salesperson can handle customer questions, objections, and complaints (the topics covered in many sales training programs). Inadequately trained salespeople usually cannot provide these benefits, and customer relations suffer. Another benefit is incorporating emerging sales-specific tools designed to improve the skills needed to facilitate and encourage strong customer relationships.¹⁵

Increase Productivity

An important objective of sales training is giving salespeople the skills they need to improve their performance and make a positive contribution to the firm. In a relatively short time, sales training attempts to teach the skills of successful sales force members. The time it takes for a new salesperson to achieve satisfactory productivity is thus shortened considerably. The productivity of sales training receives strong support from companies like Cisco Systems, which credits much of its success to having the best-trained sales force in the industry. That success has been dramatic: Cisco’s revenue rose from $18.9 billion in 2003 to more than $40 billion in 2015.¹⁶

Exhibit 12.6 Objectives of Sales Training

Improve Morale

How does sales training lead to better morale? One objective of sales training is to prepare trainees to perform tasks so their productivity increases as quickly as possible. When sales trainees know what is expected of them, they are less likely to experience frustration that arises from trying to perform a job without adequate preparation. Without training, the salesperson may not be able to answer customers’ questions, leading to frustration and lower morale. Research also suggests that training can help connect salespeople to the organization by building relationships with other employees and increase their morale, in essence trying to embed the salespereson into the organizations’ culture and people.¹⁷

Creating the right format for sales training is a very challenging task. Exhibit 12.7 describes how to create an effective training experience, which is not based on motivational hype but rather on delivering specific skills and techniques to enhance the salesperson’s ability to be successful in the field.¹⁸

Lower Turnover

If sales training can lead to improved morale, lower turnover should result. Young, inexperienced salespeople are more likely to get discouraged and quit than their experienced counterparts. Turnover can lead to customer problems, since many customers prefer continuity with a particular salesperson. When a salesperson suddenly quits, the customer may transfer business to other suppliers rather than wait for a new representative. Sales training can help mitigate such problems.

The pharmaceutical industry has focused a lot of effort on improving its sales training programs. Industry experts estimate that turnover can cost twice as much as a salesperson’s compensation package and cite training as the most significant factor in improving the retention rate of high-performing salespeople.¹⁹

Improve Selling Skills

Many companies believe that improving basic selling skills can lead to improved performance in the field. As we discussed in chapter 10, time and territory management is a subject of many sales training programs. How much time should be devoted to calls on existing accounts and how much to calls on potential new accounts? How often should each class of account be called on? What is the most effective way of covering the territory to reduce miles driven and time spent? Many sales training programs provide answers to these questions.²⁰

Analyze Needs

The starting point in creating an effective sales training program is to analyze the needs of the sales force (see Exhibit 12.8). An important first step is to travel with salespeople, observing them and asking what they need to know that will help them perform more effectively. Local sales managers are a useful source of information because they are closest to the salespeople. Other sources include company records on turnover data, performance evaluations, and sales/cost analyses. Attitudinal studies of the sales force are also helpful. On the other hand, sending questionnaires to customers is less useful because they either don’t have time to fill them out or are not particularly interested in providing good feedback. The sales training analysis should answer three basic questions:

• • Where in the organization is training needed?
• • What should be the content of the training program?
• • Who needs the training?

Determine Objectives

Specific, realistic, and measurable objectives are essential to a sales training program. They may include learning about new products, sales techniques, or procedures. It pays to keep the objectives simple. Management may want a 10 percent sales increase, which then becomes the broad objective of the training program. The specific objective might be to teach sales reps how to call on new accounts, which will help achieve the broad objective.

Develop Program and Implement

At this point, management must decide whether to develop the training program in-house or hire an outside organization. Small companies often use outside training professionals. Large companies develop most of their own programs, though they may employ outside agencies to handle specific training topics.

Outside suppliers should be screened carefully. One sales manager was embarrassed when a company he hired put on an “entertaining song and dance routine” that cost $45,000 but failed to have any lasting effect. Outside sources can be cost-effective if they meet the company’s objectives.

Evaluate and Review the Program

Designing a measurement system is the next step.

• • What do we want to measure?
• • When do we want to measure?
• • How do we measure the training?

Using tests to measure learning is not difficult, but measuring application in the field is. Whether a salesperson learns to demonstrate a product can be evaluated during the training session. But whether the salesperson demonstrates effectively in front of a customer is harder to evaluate. This is why field sales managers are an important link: They provide follow-up and feedback on how well sales reps demonstrate the product and also coach the reps on how to demonstrate the product. Finally, evaluations of sales performance provide additional proof of the value of training, although such information must be used carefully. Changes in performance, like sales increases, may be due to other factors. To claim they are due solely to sales training may ultimately reflect negatively on the training effort. Since measurement is crucial, the sales trainer needs to collect data before training starts. The needs analysis provides relevant information about program content. The data collection process should provide sales trainers with information that will justify the program. Top management wants to know if the benefits exceed or equal the costs. Keeping top management informed about the success of training programs contributes to overall credibility. Determining what needs to be

Exhibit 12.8 Analyzing the Training needs of the Sales Force

Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 12th ed. (London: Routledge, 2016).

included in a sales training program often presents some interesting challenges; consider the sales training implications in Ethical Dilemma #2.

New Recruits

Most large and medium-size companies have programs for training new sales recruits. These programs differ considerably in length and content, however. The differences often reflect variations in company policies, the nature of the selling job, and types of products and services sold. Even within the same industry, sales training programs vary in length, content, and technique.

Although a few companies have no preset time for training sales recruits, most have a fixed period for formal training. The time varies from just a couple of days in the office, followed by actual selling and on-the-job coaching, to as long as two or three years of intensive training in a number of fields and skills.

Second, training needs vary because of differences in the needs and aptitudes of the recruits. Experienced recruits have less need for training than inexperienced recruits, although most large firms require every new hire to go through some formal training. One industrial firm requires a one-week program for experienced recruits and a two- to three-year program for inexperienced recruits. New recruits often want to be “perfect” which can lead to two problems. First, they can become easily discouraged when reality kicks in and they realize that sales is about learning and not about being right all the time. Second, it can lead to poor ethical choices as they confront the normal mistakes that new salespeople make in learning the contemporary selling process. It is important for sales managers to incorporate a clear understanding of the sales process with new recruits so they have a realistic picture of the job and the company's expectations.²²

A final reason the length of training programs varies is company philosophy. Some sales managers believe training for new recruits should be concentrated at the beginning of their career; others think it should be spread over a longer time and include a large dose of learning by doing. Indeed, many companies promote lifelong learning. General Electric’s many companies deliver training throughout a salesperson’s career because GE believes the need to learn never ends.

Experienced Salespeople

After new salespeople are assigned to field positions, they quickly become involved in customer relationships, competitive developments, and other related matters. Over time, their knowledge of competitors and market conditions becomes dated. Even their personal selling styles may become less effective. Sales reps also require refresher or advanced training programs because of changes in company policies and product lines. Few companies halt training after the trainee has completed the basics. As discussed previously, most managers agree that the need to learn is a never-ending process and even the most successful sales rep can benefit from refresher training.

Additional training often occurs when a sales representative is being considered for promotion. In many companies, a promotion means more than moving from sales to district sales manager. It can mean being assigned better customers, transferring to a better territory, moving to a staff position, or being promoted to sales management. Whenever salespeople are assigned new customers or new territories, additional sales training helps them assimilate their new responsibilities.

Product Knowledge

Although product knowledge is one of the most important topics, knowing when and how to discuss the subject in a sales call is probably even more important. More time is typically spent on product knowledge than any other subject (although the time spent varies with the product sold).

Companies that produce technical products, such as computer and other technology-related companies, spend more time on product knowledge than do manufacturers of nontechnical products. HP, Intel, and others spend a great deal of time educating salespeople on their products and services because it is critical that the right product or service be applied to each customer’s unique application.

Product knowledge involves knowing not only how the product is made but also how it is used— and, in some cases, how it should not be used. One producer of machine tools gives newly hired sales engineers extensive in-plant exposure to technical and engineering matters. Before field assignment, they spend time in a customer’s plant, where they are taught machine set up and operations under realistic conditions.

Exhibit 12.9 Topics in Sales Training

Product knowledge is not limited to those products the salesperson will eventually sell. Customers often want to know how competitive products compare with each other on price, construction, performance, and compatibility. They expect salespeople to show them how the seller’s products can be coordinated with competitive products, as in a computer installation that involves products made by different manufacturers. One manufacturer that supplies paper towels to industrial firms exposes sales trainees to competitor towel dispensers so they will know which dispensers handle their paper towels.

A major objective in training product knowledge is to enable a salesperson to give potential customers the information they need for rational decision making. As we discussed in chapter 7, many benefits accrue to salespeople as they acquire product knowledge:

1. Pride and confidence in product quality.
2. Self-assurance emanating from technical knowledge of product makeup.
3. Communication with customers through the use of the operational vocabulary peculiar to the industry.
4. Understanding of product functioning that allows effective diagnosis of customer problems.²³

All these benefits improve the customer–salesperson relationship.

Market/Industry Orientation

Sales training in market/industry orientation covers both broad and specific factors. From a broad viewpoint, salespeople need to know how their particular industry fits into the overall economy. Economic fluctuations affect buying behavior, which affects selling techniques. Information about inflationary pressure, for example, may be used to persuade prospective buyers to move their decision dates up. If the sales force is involved in forecasting sales and setting quotas, knowledge of the industry and the economy is essential. From a narrower viewpoint, salespeople must have detailed knowledge about present customers. They need to know their buying policies, patterns, and preferences and the products or services these customers produce. In some cases, salespeople need to be knowledgeable about their customers’ customers.

Company Orientation

New salespeople must be aware of company policies that affect their selling activities. Like all new employees, they need to learn the company’s policies on such items as salary structure and company benefits. New salespeople learn about company policies and procedures by working in various departments, such as credit, order processing, advertising, sales promotion, and shipping. In addition, salespeople work inside sales for a time before being assigned to a field sales position. They process customer orders, maintain contact with customers (email, phone), and sometimes serve as the company contact for a group of customers.

Time and Territory Management

As we discussed in chapter 10, new and even experienced salespeople can benefit from training in how to manage their time and territories. Management also considers time management a critical issue. Blue Cross Blue Shield instituted Internet-based learning so salespeople could spend more time with their customers. Dan Goettsch, sales training manager, states, “One of the big issues here is the notion that selling time is a very precious commodity. Any time [out of the field] is costly for sales folks.”²⁴

Legal/Ethical Issues

You learned in chapter 4 that statements (or misstatements) made by salespeople have legal and ethical implications. Lapses in ethical conduct have been known to lead to legal problems. Exhibit 12.10 describes one industry’s response to ethical problems. When major insurance companies allowed sales reps to engage in unethical practices (such as selling whole-life insurance policies as annuities), the legal settlements ran into millions of dollars. National organizations like the Insurance Marketplace Standards Association support ongoing mandatory ethics training for salespeople.

Technology

Source: Adapted from websites for Liberty Mutual and Insurance Marketplace Standards Association, June 2015.

Laptop computers are standard issue for salespeople today. Many companies (for example, Google and IBM) are also creating home offices for their sales forces that eliminate the need to go out to an office at all. With a high-speed network connection, laptop or desktop computer, printer, and cell phone, a salesperson is almost totally self-sufficient. Salespeople use laptops or other mobile devices to plan their call activities, submit orders, send reports, check on inventory, receive both customer and company messages, and present product and service demonstrations. In some cases, the sales rep can access the company’s decision support system (DSS) to learn what products have been selling in an area or for a specific customer.

Effective use of technology allows salespeople more face-to-face customer contact time. It also lets them respond much faster to customers. With cell phones, they can be in contact with customers almost all the time. Add to these the direct network connections that companies such as Disney and Ford have with their suppliers, and it’s no wonder that many customers report much better communication with the salespeople who call on them.

Specialized Training Topics

Sales training topics may be very specific. Price objections are common in sales transactions, and sales managers are not pleased if reps offer discounts too quickly. Johnson Controls Inc., a manufacturer of automated control systems based in Atlanta, instituted a training program on price negotiations. The company found that many salespeople were more comfortable reducing market price than building value. One solution was to provide salespeople with detailed financial information to help customers see the added value of Johnson’s pricing policies.²⁵

On-the-Job Training

The mere mention of on-the-job training sometimes scares new sales recruits. The thought of learning by doing is psychologically troubling for many people, often due to incorrect perceptions of OJT. On-the-job training is not a “sink or swim” approach in which the trainee is handed an order book and a sales manual and told, “Go out and sell.”

On-the-job training is a very effective way of learning for salespeople. Indeed, it is said that three-fourths of all learning at work takes place informally. The Education Development Center identifies five keys for effective on-the-job informal training:

1. Teaming. Bringing together people with different skills to address issues.
2. Meetings. Setting aside times when employees at different levels and positions can get together and share thoughts on various topics.
3. Customer interaction. Including customer feedback as part of the learning process.
4. Mentoring. Providing an informal mechanism for new salespeople to interact and learn from more experienced ones.
5. Peer-to-peer communication. Creating opportunities for salespeople to interact for mutual learning.²⁶

When on-the-job training and coaching occur together, it is called one-on-one training. Observation is an integral part of the process. For managers, helping salespeople reach their full potential means spending time with them one on one. One consultant specializing in sales performance states, “Managers play an essential role in cultivating talent. They need to take on a coaching role.” Providing individual feedback can lead to greater salesperson satisfaction. One salesperson sums up the benefits of one-on-one feedback this way: “For my entire sales career, my manager went on calls with me at least two days every month. The [sales] classes never would have had an impact without coaching.”²⁷

OJT often involves job rotation—assigning new salespeople to different departments where they learn about such things as manufacturing, marketing, shipping, credits and collections, and servicing procedures. After on-the-job training, many sales trainees proceed to formal classroom training.

Internet (Online)

The Internet has revolutionized the delivery of training not just in sales but across the entire organization. Indeed, it’s now possible for companies to deliver quality learning experiences to their customers online. Companies find the Internet very effective and very efficient in delivering information. Online training is growing at a very rapid rate and companies are literally spending billions on online training methods. Exhibit 12.11 highlights one way the Internet is being used in sales training.

Source: Adapted from AlignMark website.

SAP invests a great deal of time and resources in the delivery of online training to its sales force of over 300,000 worldwide. Its Internet-based training strategy involves delivering small incremental packets of information on products and customers in time to complete specific projects currently on the salesperson’s activity list. Online chat groups help salespeople gather even more information and provide feedback on current activities.

Do online training programs work? Can they train salespeople to interact with customers effectively? The answers have not been well documented. As with all methods, salespeople need a great deal of information to do their jobs well. Online training can be very effective in delivering certain kinds of information but will not likely eliminate the need for one-on-one training for salespeople. Even as technology improves and interactive online training effectively simulates the sales environment, the ability for trainers and managers to provide real time, specific feedback to a salesperson highlights the need for companies to implement a wide range of training tools.

Classroom Training

For most companies, formal classroom training is an indispensable part of sales training—although very few rely on it exclusively. The Internet now allows much of the information delivered in a classroom to be sent directly to salespeople in the field, yet classroom training still has one major advantage—the opportunity for interaction among sales trainees. Reinforcement and ideas for improvement can come from other sales trainees. Interaction is so important that many companies divide sales trainees into teams for case presentations, which forces them to become actively involved.

Classroom training also has its disadvantages. It is expensive and time consuming. It requires recruits to be brought together and facilities, meals, transportation, recreation, and lodging to be provided for them. In an attempt to cut costs, sales managers sometimes cover too much material in too short a time. This results in less retention of information. Sales managers must avoid the tendency to add more and more material because the additional exposure is often gained at the expense of retention and opportunity for interaction.

Role-Playing

As you already know, role-playing is an important part of the learning experience. The sales trainee acts out a part, most often a salesperson, in a simulated buying session. The buyer may be either a sales instructor or another trainee. Role-playing is widely used to develop selling skills, but it can also test whether the trainee can apply knowledge taught via other methods of instruction. The trainee, the trainer, and other trainees critique the trainee’s performance immediately after the role-playing session.

Role-playing critiques can be harsh sometimes if the critique is conducted only in the presence of the sales trainee and only by the instructor. When role-playing is handled well, most trainees identify their own strengths and weaknesses without input from other trainees.

Measurement Criteria

If it is important to measure training, what characteristics of sales training should be assessed? Exhibit 12.13 is an evaluation options matrix. A company could single out one method to measure effectiveness, but using several criteria will yield more accurate results. Measuring what participants learned, for example, is not enough because the obtained knowledge may not produce desired behavior changes. Yet the program might be considered a failure if nothing was learned or if what was learned was not helpful. The solution is to specify the objectives and content of the sales training program, the criteria used to evaluate the program, and the design of the research so benefits can be unambiguously determined.

Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 12th ed. (London: Routledge, 2016).

Measuring Broad Benefits

Broad benefits of sales training include improved morale and lower turnover. Morale can be partially measured by studies of job satisfaction. This approach is feasible with experienced sales personnel. Suppose, for instance, a company measured job satisfaction as part of a needs analysis and found evidence of problems. A follow-up job satisfaction study after the corrective sales training program would determine if morale changed noticeably.

Measuring reactions and learning in sales training is important for both new and experienced personnel. Most companies measure reactions by asking participants to complete an evaluation form either immediately after the session or several weeks later. Enthusiasm may be high right after a session, but sales training effectiveness is much more than a warm feeling.

Measuring what sales trainees learned requires tests. To what extent did they learn the facts, concepts, and techniques covered in the training session? Objective examinations are needed.

Measuring Specific Benefits

Enjoying the program and learning something are not enough. Specific measures are needed to examine behavior and results. The effectiveness of sales training aimed at securing more new customers, for example, is assessed, in part, by examining call reports to see whether more new customers are being called on. Results can also be measured by tracking new-account sales to see whether they have increased. If the specific objective of sales training is to increase the sales of more profitable items, the checking on overall sales profitability is a valid measure of training effectiveness. If reducing customer complaints is the objective, then it is appropriate to consider whether customer complaints do in fact decrease.

The measurement of both specific and broad benefits presumes the sales training program is designed to achieve certain goals. The goals should be established before training begins. When specific objectives have been determined, the best training program can be developed to achieve these objectives. Most training programs have several objectives, so multiple measurements of their effectiveness are a necessary part of evaluating their benefits.

Many sales training evaluation measures are simple, consisting primarily of reactions to the program. Meaningful evaluation measures, such as learning, behavior, and results, are not used often enough, while the weakest or easiest-to-collect measures—staff comments and feedback from supervisors and trainees—are used the most.²⁸