Consequences of Limited Sales Management Training

Transcription

1 Consequences of Limited Sales Management Training John W Wilkinson School of Marketing, University of South Australia, Adelaide, Australia john.wilkinson@unisa.edu.au

2 CONSEQUENCES OF LIMITED SALES MANAGEMENT TRAINING ABSTRACT Prior research suggests that inadequate sales management training is provided in many companies. An important implication of this lack of training is the likely absence of sales management leadership skills, in turn resulting in inadequate leadership support being provided to many salespeople. This paper provides results of an initial study regarding levels of sales management leadership support. BACKGROUND A substantial amount of research has been undertaken into the training of salespeople. However, very little research had been undertaken into the training of sales managers prior to the late 1990s (Dubinsky, Mehta and Anderson 2001; Shepherd and Ridnour 1995). Indeed, only two studies were reported in the literature in the 30 years prior to 1995 (Anderson, Mehta and Strong 1997). According to Anderson et al (1997: 54), a study by Adams in 1965 found that sales management training was provided by just one of 44 responding United States companies, while a study by Coppett and Staples in 1980 found that fewer than half of responding companies across 16 industries in the United States provided any sales management training. Based on responses from sales training executives, Shepherd and Ridnour (1995) identified the content of sales management training programs of 93 United States companies, summarised in Table 1. There appear to be major gaps in this content, with most (17 of 28) identified topics being omitted from training programs by more than half of the responding companies. Since respondents to the survey were members of a professional sales training association (the National Society of Sales Training Executives, now known as the Professional Society for Sales & Marketing Training), their companies were willing to make the financial commitment necessary to have an executive dedicated to sales training and, therefore, probably were committed to training (Shepherd and Ridnour 1995: 70). Intuitively, it seems likely that most other companies had even larger gaps in their sales management training programs if those companies conducted such programs at all. [Table 1 About Here] Similarly, based on responses from almost 300 sales managers from 15 industries within the United States, Anderson et al (1997) found that 57% of respondents had received no formal sales management training since their appointment to a sales management role. Only about 25% of respondents had received training prior to reaching a position of regional sales manager or higher (that is, while in a lower position of field, branch or district sales manager). These results confirm that, as recently as five to ten years ago,

3 most sales managers in the United States received little or no formal sales management training especially within lower levels of the sales management hierarchy. In summary, based on research within the United States, it seems likely that few companies provide extensive sales management training programs for sales managers, even though [s]alespeople often have difficulty making a successful transition from salesperson to sales manager (Anderson et al 1997: 53) and newly recruited sales managers recognize that sales management training is necessary for them to perform effectively (Mehta, Dubinsky and Anderson 1999: 437). Consequently, many sales managers probably have inadequate skills to provide appropriate leadership and management support to their salespeople. While there is no published research regarding the situation within Australia and New Zealand, informal feedback from nearly 20 sales managers in unrelated companies suggests that little management training is provided to many Australian sales managers. The current research constitutes an initial investigation of the level of leadership support provided by sales managers to their salespeople. Given the apparent lack of training, it was considered likely that many sales managers would be found to provide inadequate leadership support. LEADERSHIP ACTIVITIES Leadership involves the direction, support, evaluation and control of employees (Szilagyi and Wallace 1987). Effective leadership often has the goal of lifting people s vision to a higher sight and raising their performance to a higher standard (Drucker, cited in Pettinger 2000: 120). According to Viljoen (1994), effective leadership requires: role clarity, which is aimed at ensuring that every employee knows exactly what her/his job comprises and what performance levels s/he is expected to achieve performance orientation, which involves providing positive and timely feedback about performance, and enabling access to required resources action orientation, which involves a commitment to make necessary decisions instead of leaving issues unresolved, even if the decisions are unpalatable responsiveness to the concerns of staff, so that work-related uncertainty is reduced. According to Harmon, Brown, Widing and Hammond (2002: 43): The sales department is more successful when leadership effectively mentors, coaches, and counsels individual salespeople. A sales manager leads by providing feedback to the salesperson after first determining a need for feedback based on his or her perception of the salesperson s performance. 2

4 Harmon et al (2002: 45) note that the value of sales management feedback is well documented. For example, Jaworski and Kohli have concluded that salespersons focused their efforts and achieved higher performance when they understood the expectations of management, and Futrell, Swan and Todd have reported improved sales force effectiveness when the reward system was clearly understood (ibid: 45). Based on a survey of 52 Dutch companies, Hultink, Atuahene-Gima and Lebbink (2000: 28) found that feedback provided by the sales manager is positively related to new product selling performance. Hultink et al (ibid) suggest that salespeople perform better when their sales manager provides them with feedback on their past performance. They also suggest that feedback reminds salespeople of the results that they are expected to attain, causing them to feel less ambivalent about their role (ibid: 32). Researchers have identified the need for sales management to monitor and reward the activities, behaviour and efforts not just the outcomes or results of salespeople. For example, according to Grant and Cravens (1999: 948): There is [increasing] empirical support indicating that the greater the extent of behavior-based sales management control (monitoring, directing, evaluating, and rewarding), the higher the effectiveness of the sales organization. Within outcome-based control systems, there is relatively little monitoring of salespeople, managerial direction or effort to direct salespeople; and objective measures of results are used to evaluate and compensate salespeople, rather than measures of their activities or behaviour. In contrast, in behaviour-based control systems, there is considerable monitoring of salespeople s activities and results, and high levels of management direction and intervention; while subjective and more complex methods are used to evaluate and compensate salespeople, based primarily on (1) what salespeople bring to the selling task, such as aptitude and product knowledge, (2) salespeople s activities, such as numbers of sales calls, and (3) salespeople s approaches or strategies. (Anderson and Oliver 1987: 76) A framework of the leadership process is provided by Szilagyi and Wallace (1987), illustrated in Figure 1. This framework and the above-mentioned leadership factors have been used to identify leadership activities to be considered in this initial study. [Figure 1 About Here] A framework of the selling process (Wilkinson 2004), illustrated in Figure 2, has been used to identify potential sales management leadership activities specifically related to each step within the selling cycle. [Figure 2 About Here] 3

5 METHODOLOGY A preliminary research instrument was developed following consideration of the factors identified in the literature review (summarised above), the framework of the leadership process illustrated in Figure 1, and the framework of the selling process illustrated in Figure 2. Further development was based on structured interviews with three sales managers and six salespeople from different marketing organisations. Besides having relevant experience, each participant had successfully completed a course in personal selling or sales management within a marketing program at an Australian university. Participants were interviewed separately over a period of about ten weeks. The interview process included use of the value laddering technique (Deeter-Schmelz, Kennedy and Goebel 2002; Gutman 1982), enabling clarification of key issues regarding leadership support for major selling activities. Each item in the final questionnaire incorporates a five-point Likert scale, with a higher value representing greater agreement that a particular management activity is undertaken by the respondent s sales manager. The questionnaire comprises 79 questions in total, 39 of which are applicable to this paper. Data collection involved completion of the questionnaire by field salespeople regarding their perceptions of the sales management support received in their sales roles. This approach was taken since managers are not very good at evaluating themselves relative to objective criteria (Atwater, Ostroff, Yammarino and Fleenor 1993: 577) and subordinates perceptions of a manager s leadership style are likely to be more accurate than self-perception or perceptions of a senior manager or colleague (Zigarmi and Zigarmi, cited in Avery 2001: 14). Similar approaches have been used in prior studies assessing leadership behaviour of respondents managers (for example, Tirmizi 2002). After management approval was obtained, questionnaires were mailed to 183 salespeople in two Australian companies, both being leaders within their (unrelated) industries. The company and participating salespeople were offered summary reports of the findings, but no other inducements were offered. Salespeople were advised that company management would not be provided details of individual responses or about which salespeople had participated in the study. Following up to two reminder letters, 122 usable responses were received, providing a response rate of 67%. Comparisons of results from early and late respondents indicated an absence of respondent bias. The methodology and response rate are consistent with those of prior salesforce studies (for example, Atuahene-Gima and Micheal 1998, with an effective response rate of 14%; Babakus, Cravens, Johnston and Moncrief 1999, with a 58% response rate; and Rich 1997, with a 75% response rate). Data analysis included K-means cluster analysis (and analysis of variance to confirm the significance of differences in the cluster centre means for each variable). 4

6 RESULTS As shown in Table 2, for two of twelve questions involving leadership generally, more responding salespeople disagree than agree that they receive the indicated leadership support. More notably, for ten (or 37%) of 27 questions involving leadership specifically related to steps within the selling process, more responding salespeople disagree than agree that they receive the indicated leadership support. In addition, the modes, medians and mean scores are three or less (within a 1 5 scale) for those twelve items. [Table 2 About Here] As shown in Table 3, cluster analysis identified three groups of respondents with significantly different response profiles. Only one group, comprising just 34 respondents (or 28% of the sample of 122 respondents) has a cluster centre mean of more than three (within a 1 5 scale), with a similar number (28 respondents, or 23% of the sample) having a cluster centre mean of just two. [Table 3 About Here] DISCUSSION AND RECOMMENDATIONS FOR FUTURE RESEARCH Based on responses from 122 salespeople from two Australian companies in distinctly different industries and selling situations, it appears possible that a substantial proportion of salespeople receive inadequate leadership support. Gaps in leadership support cannot be attributed primarily to inadequate sales management training (in the absence of more thorough research). However, there does seem to be a need for greater emphasis on training to improve the level of sales management leadership. Results of this initial study suggest a need for further investigation of the levels of sales management training provided within Australasian organisations and of the leadership performance of sales managers. Future studies could include analysis of the quality of sales management leadership activities, as well as identifying gaps in the range of potential leadership activities. More ambitiously, studies also could investigate the effects of different levels of training and of leadership on salesforce performance. REFERENCES Anderson, E and Oliver, RL (1987). Perspectives on behavior-based versus outcomebased salesforce control systems. Journal of Marketing 51. Anderson, RE, Mehta, R and Strong, J (1997). An empirical investigation of sales management training programs for sales managers. Journal of Personal Selling & Sales Management XVII (3): Atuahene-Gima, K and Micheal, K (1998). A contingency analysis of the impact of salesperson s effort on satisfaction and performance in selling new products. European Journal of Marketing 32 (9/10):

7 Atwater, LE, Ostroff, C, Yammarino, FJ and Fleenor, JW (1993). Self-other agreement: Does it really matter? Personnel Psychology 51: Avery, GC (2001). Situational leadership preferences in Australia: congruity, flexibility and effectiveness. Leadership & Organization Development Journal 22 (1): Babakus, E, Cravens, DW, Johnston, M and Moncrief, WC (1999). The role of emotional exhaustion in sales force attitude and behavior relationships. Journal of the Academy of Marketing Science 27 (1): Deeter-Schmelz, DR, Kennedy, KN and Goebel, DJ (2002). Understanding sales manager effectiveness: Linking attributes to sales force values. Industrial Marketing Management 31: Dubinsky, AJ, Mehta, R and Anderson, RE (2001). Satisfaction with sales manager training: Design and implementation issues. European Journal of Marketing 35 (1/2): Grant, K and Cravens, DW (1999). Examining the antecedents of sales organization effectiveness: An Australian study. European Journal of Marketing 33 (9): Gutman, J (1982). A means end chain model based on consumer categorization processes. Journal of Marketing 46 (2): Harmon, HA, Brown, G, Widing, RE, II and Hammond, KL (2002). Exploring the sales manager s feedback to a failed sales effort. The Journal of Business and Industrial Marketing 17 (1): Hultink, EJ, Atuahene-Gima, K and Lebbink, I (2000). Determinants of new product selling performance: An empirical examination in the Netherlands. European Journal of Innovation Management 3 (1): Mehta, R, Dubinsky, AJ and Anderson, RE (1999). Marketing channel management and the sales manager. Industrial Marketing Management 31: Pettinger, R (2000). Mastering organisational behaviour. Houndmills, Hampshire, Macmillan. Rich, GA (1997). The sales manager as a role model: Effects on trust, job satisfaction, and performance of salespeople. Journal of the Academy of Marketing Science 25 (4): Shepherd, CD and Ridnour, RE (1995). The training of sales managers: An exploratory study of sales management training practices. Journal of Personal Selling & Sales Management XV (1): Szilagyi, AD, Jr and Wallace, MJ, Jr (1987). Organizational behavior and performance. Glenview, Illinois, Scott, Foresman. Tirmizi, SA (2002). The 6-L framework: a model for leadership research and development. Leadership & Organization Development Journal 23 (5): Viljoen, J (1994). Strategic management. Sydney, Longman. Wilkinson, JW (2004). Toward an Enhanced Framework of the Business-to-Business Selling Process. Australia & New Zealand Academy of Marketing Conference, Wellington, New Zealand. 6

8 TABLE 1: Content of Sales Management Training Programs Extensive Moderate Slight Topic No coverage coverage coverage coverage Facility/staff management 8% 5% 10% 77% Developing a business plan 7% 3% 14% 76% Business ethics 9% 7% 9% 75% Terminating 9% 5% 14% 72% Computer/technical application 5% 6% 18% 71% Managing diversity 3% 9% 18% 70% Psychological assessment 10% 6% 14% 70% Forecasting 3% 14% 15% 68% Quota setting 2% 9% 22% 67% Competitive analysis 3% 16% 17% 64% Discrimination issues 7% 12% 18% 63% Sexual harassment 6% 8% 24% 62% Company orientation 10% 9% 20% 61% Territory planning 14% 20% 6% 60% General account strategies 10% 16% 15% 59% Conducting meetings 14% 15% 18% 53% National account management 10% 13% 25% 52% Managing change 18% 12% 21% 49% Training techniques and skills 15% 18% 20% 47% Team building 13% 18% 23% 46% Problem solving 12% 12% 31% 45% Recruiting and selection 18% 25% 14% 43% Time management 17% 17% 26% 40% Transition to management 15% 20% 30% 35% Setting standards and goals 18% 32% 15% 35% Performance reviews 25% 23% 20% 32% Motivational skills 16% 30% 25% 29% Coaching 28% 30% 20% 22% Source: Adapted from Shepherd and Ridnour 1995:

9 TABLE 2: Summary of Responses to Questions about Sales Leadership Support Agreement Questions relating to leadership generally Mode Median Mean factor* n Do you feel empowered to take necessary actions with respect to your customers and prospects? /5 122 Do you believe you know exactly what your job comprises and what performance levels your manager /7 121 expects of you? Does your manager provide support? / Does your manager explain relevant corporate/divisional goals when negotiating or setting your performance / criteria? Does your manager monitor your performance? / Does your manager provide useful feedback about your sales outcomes/results? / Does your manager provide guidance? / Does your manager review or critique your performance with you and provide adequate feedback? Generally, does your manager provide constructive and timely feedback about your performance? Does your manager provide useful feedback about your sales activities? Does your manager provide appropriate rewards in relation to good performance? Does your manager provide appropriate disincentives in relation to bad performance? / / / / /39 65 Questions relating to leadership support for steps in the selling process Does your manager provide you with, or facilitate your access to, required information and other resources? Does your manager make necessary decisions even if unpalatable instead of leaving issues unresolved? Does your sales manager or other management staff assist you in negotiations, if necessary? Do your sales manager, management staff or technical specialists assist you in sales presentations, if necessary? Does your sales manager or any technical specialist help you identify the most appropriate solutions for customers or prospects, if/when necessary? Does your firm have effective customer service staff to assist you to coordinate product/service delivery to customers? Does your manager assist you to obtain necessary resources and/or support from within your company (such as head office marketing, other sales offices, logistics, manufacturing, and information technology)? Does/Do your manager and/or other company managers/specialists assist in your account management activities at your larger customers/prospects? When performance standards are not met, does your manager appear to take appropriate/corrective action within the salesforce or to influence other parts of the company to take appropriate/corrective action? / / / / / / / / /

10 Are you regularly assessed by your manager on customer service? / Does your company have effective internal communication, enabling coordination of sales-related activities and collaboration with customers to / establish/maintain business relationships? Does your sales manager or other management staff assist you in closing? / Do your sales manager, management, or specialists from technical/production areas assist you to undertake followup / and relationship-building activities, if necessary? Does your sales manager or any technical specialist help you to assess needs of prospects or additional needs of / existing customers, if/when necessary? Does your manager ensure that you obtain adequate commitment/support from a selling support team? / Does your firm have effective customer service staff to assist you to undertake follow-up and relationshipbuilding / activities? Is your prospecting assisted by database facilities? / Does your manager provide support if/when you find prospecting tough or when you just don t feel the / need for prospecting? Do your sales manager or technical specialists help you to analyse reasons for failure to obtain additional / business from existing customers, if/when necessary? Does your sales manager or any technical specialist help you in analysing reasons for failure to obtain business / from prospects or for the loss of customers, if necessary? Are you regularly assessed by your manager on customer retention? / Do your sales manager, management staff, or specialists from technical/production areas of your firm assist you to evaluate your firm s supply performance and to provide / feedback to operations areas if necessary? Does your manager help to obtain initial appointments with prospects if/when you find this difficult? 1, / Does your firm conduct promotions or telemarketing that assist you to make initial appointments with prospects? / Are you regularly assessed by your manager on customer complaints? / Are you regularly assessed by your manager on the number of new accounts? / Are you regularly assessed by your manager on the number of presentations undertaken? / * Ratio of percentage of responses agreeing or agreeing strongly with the question/statement, to the percentage of responses disagreeing or disagreeing strongly (that is, the ratio of the number of scores of 4 or 5, to the number of scores of 1 or 2). For shaded items, the ratio is less than 50/50 (that is, fewer respondents agree than disagree). 9

11 TABLE 3: Cluster Analysis Final Cluster Centre Scores Leadership/management question #1 (n=34) Do your sales manager, management, or specialists from technical/production areas of your firm assist you to undertake follow-up and relationship-building activities, if necessary? 10 Cluster / Centre* #2 (n=60) Do you feel empowered to take necessary actions with respect to your customers and prospects? Do you believe you know exactly what your job comprises and what performance levels your manager expects of you? Does your manager provide support? Does your manager explain relevant corporate/divisional goals when negotiating or setting your performance criteria? Does your manager monitor your performance? Does your manager provide useful feedback about your sales outcomes/results? Does your manager provide guidance? Does your manager review or critique your performance with you and provide adequate feedback? Generally, does your manager provide constructive and timely feedback about your performance? Does your manager provide useful feedback about your sales activities? Does your manager provide appropriate rewards in relation to good performance? Does your manager provide appropriate disincentives in relation to bad performance? Generally, does your manager provide you with, or facilitate your access to, required information and other resources? Generally, does your manager make necessary decisions even if unpalatable instead of leaving issues unresolved? #3 (n=28) Does your sales manager or other management staff assist you in negotiations, if necessary? Do your sales manager, management staff or technical specialists assist you in sales presentations, if necessary? Does your sales manager or any technical specialist help you identify the most appropriate solutions for customers or prospects, if/when necessary? Does your firm have effective customer service staff to assist you to coordinate product/service delivery to customers? Does your manager assist you to obtain necessary resources and/or support from within your company (such as head office marketing, other sales offices, logistics, manufacturing, and information technology)? Does/Do your manager and/or other company managers/specialists assist in your account management activities at your larger customers/prospects? When performance standards are not met, does your manager appear to take appropriate/corrective action within the salesforce or to influence other parts of the company to take appropriate/corrective action? Are you regularly assessed by your manager on customer service? Does your company have effective internal communication, enabling coordination of sales-related activities and collaboration with customers to establish/maintain business relationships? Does your sales manager or other management staff assist you in closing?

12 Does your sales manager or any technical specialist help you to assess needs of prospects or additional needs of existing customers, if/when necessary? Does your manager ensure that you obtain adequate commitment/support from a selling support team? Does your firm have effective customer service staff to assist you to undertake follow-up and relationship-building activities? Is your prospecting assisted by database facilities? Does your manager provide support if/when you find prospecting tough or when you just don t feel the need for prospecting? Do your sales manager or technical specialists help you to analyse reasons for failure to obtain additional business from existing customers, if/when necessary? Does your sales manager or any technical specialist help you in analysing reasons for failure to obtain business from prospects or for the loss of customers, if necessary? Are you regularly assessed by your manager on customer retention? Do your sales manager, management staff, or specialists from technical/production areas of your firm assist you to evaluate your firm s supply performance and to provide feedback to operations areas if necessary? Does your manager help to obtain initial appointments with prospects if/when you find this difficult? Does your firm conduct promotions or telemarketing that assist you to make initial appointments with prospects? Are you regularly assessed by your manager on customer complaints? Are you regularly assessed by your manager on the number of new accounts? Are you regularly assessed by your manager on the number of presentations undertaken? Overall mean of cluster centre means for all questions (variables) * Analysis of variance (ANOVA) confirms the significance of differences in cluster centre means at the 99% confidence level for all except the first question, and indicates that selection of three clusters is more appropriate than selection of either two or four clusters. In addition, selection of four clusters would provide two clusters with similar cluster centre means (3.0 and 3.3) and a combined membership (n=68) similar to that of Cluster #2 in the above table. 11

13 FIGURE 1: A Leadership Model Source: Szilagyi and Wallace 1987:

14 FIGURE 2: The Selling Process Source: Wilkinson 2004: 4 13