198 ◾ The Guide to Entrepreneurship: How to Create Wealth for Your Company
9.9 Sales and Sales Promotions
A sale is the act of selling a product or service in return for money or other
compensation.
20
Signaling completion of the prospective stage, it is the
beginning of an engagement between customer and vendor or the exten-
sion of that engagement.
21
Sales promotions are the short-term incentives
(lower price, better terms, faster delivery) to encourage purchase of a prod-
uct or service.
The sales eld is composed of individuals who perform “personal” sell-
ing. Examples are salespeople, sales representatives, district managers,
regional managers, account executives, sales engineers, agents, account rep-
resentatives, etc.
9.9.1 Your Sales Force
“Set the sale goals, then empower your sales force to accomplish
those goals.”
Salespeople include order takers (behind a counter or by web/telephone) or
interpersonal (face-to-face communications or teleconferencing). They may
be home-based or out in the eld. Keep in mind that salespeople represent
the company to customers and, conversely, represent customer interests to
the company.
The sales force is managed by the methods shown in Figure9.12.
9.9.2 Sales Force Compensation
The purpose of the sales force compensation metric is to determine the mix
of salary, bonus, and commission that will maximize sales generated by the
sales force. When designing a compensation plan for a sales force, managers
face four key considerations: level of pay, mix between salary and incentive,
measures of performance, and performance-payout relationships.
The level of pay, or compensation, is the aggregate amount that a com-
pany plans to pay a salesperson over the course of a given year. This can
be viewed as a range because its total will vary with bonuses or commis-
sions.
22
Surveys consistently show that 95% of sales force compensation
schemes had a combination of quotas and commissions.
23
Compensation
packages can be complex and affected by multiple forces, as seen in
Table9.6.