Selling Hospitality Chapter 15 Sales Management Copyright

Selling Hospitality Chapter 15 Sales Management Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Why Study Sales Management? § § Knowing the role of the director of sales will provide you a better appreciation of how to manage your manager. Sales management is a worthy career goal for ambitious salespeople. Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Career Ladder in Sales Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Responsibilities of a Director of Sales § Determining the sales force size and structure § Recruiting the sales force § Selecting and training the sales force § Organizing the sales office § Motivating and evaluating salespeople Copyright © 2006 Thomson Delmar Learning All Rights Reserved

How many sales staff are required? 50 percent of revenue group and corporate accounts 50 percent transient demand Copyright © 2006 Thomson Delmar Learning All Rights Reserved

How many sales staff are required? 50 percent of revenue group and corporate accounts 50 percent transient demand • Suppose group sales last year totaled $10 million, employing four full-time sales managers. • Further assume that next year’s marketing plan calls for an increase in group sales to $12. 5 million (+25%). Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Workload Method for Determining Size of a Sales Force Clients and prospects are grouped into A, B, C, or D categories according to their annual sales volume. Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Key Account Management § A accounts—established accounts that generate a high level of business. These accounts warrant greatest attention in the form of understanding the client’s full range of business needs through personal sales calls and telephone contacts that emphasize consultative sales strategies. § B accounts—consist of high-potential accounts. They may be established accounts that are already providing a good level of business but have a potential to provide more (for example, by winning other pieces of their business away from competitors). These may warrant your attention at the same frequencies as A accounts, perhaps even more. § C accounts—consist of potential new accounts or established accounts with medium potential. § D accounts—composed of potential new or established accounts Copyright © 2006 Thomson Delmar Learning with low potential. Follow-up on these accounts comes last, after all other All Rights Reserved accounts have been handled.

Workload Method for Determining Size of a Sales Force 1. Clients and prospects are grouped into A, B, C, or D categories according to their annual sales volume. 2. The DOS establishes a standard for the number of sales calls per account per year for each category of accounts. 3. The total workload for sales is calculated by multiplying the number of accounts in each group by the corresponding frequency of sales calls. 4. The DOS and staff determine a “doable and desirable” average number of sales calls a sales manager can actually make per year. 5. The DOS determines the number of sales representatives needed by dividing the total workload Copyright © 2006 Thomson Delmar Learning (total number of sales calls required) by the average All Rights Reserved number of calls a salesperson can realistically make.

Illustration of Workload Approach Assume that there are 30 A accounts, 75 B accounts, 200 C accounts, and 300 D accounts in your market. Further assume that – A accounts warrant 2 personal sales calls per month (24 per year) and 3 telephone contacts per month (36 per year). – B accounts merit 1 personal sales call per month (12 per year) and 2 telephone contacts per month (24 per year). – C accounts warrant 1 personal sales call every other month (6 per year) and 2 telephone calls Copyright © 2006 Thomson Delmar Learning per month (24 per year). All Rights Reserved – D accounts require 1 contact per month by

Illustration of Workload Approach The company requires 3, 720 personal sales calls and 11, 280 telephone sales calls per year. The average salesperson can make 15 personal sales calls per week (780 per year) and 43 telephone sales calls per week (2, 256 per year). The company would need 5 full-time sales representatives to successfully manage the workload. Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Recruitment Strategies Internal search External Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Hospitality Industry Positions Available: 03/27/03 Lou Taverna: LTaverna@Hospitality-1 st. com Regional Sales Director: Orlando, FL and Los Angeles, $100 K; Harrison Business Group, LLCE-Mail: Jennifer. Bernard@Harrison. Business. Group. com Senior Sales Manager, great hotel in Lebanon, NJ. 65 K base; Director of Sales for a hotel in Milpitas, CA. Mitchell T. Prager CHA: Mitch@Hotel. Head. Hunter. com The Bellevue Club: Director of Sales & Marketing, Napa, CA— Carneros Inn Company: margie@otlconsulting. com Sales Manager–Orlando. Company: JHM Hotels Management, Inc. ; Scott Wheeler: swheeler@jhmhotels. com DOS&M for 2 Hotels—Washington, DC—Exc. Salary & Bonus Position: Director of Sales—Quality Full Service 300+ Rms w/16 K Position: Sales & Catering Mgrs. Branded 3+ Star call for openings; Position: Director of Sales—Major Flag Full Service Norfolk, VA; Copyright © 2006 Thomson Delmar Learning Position: Group Sales Manager 2– 3 yrs exp. Colorado Springs $40– All Rights Reserved $45 K Hospitality Management Recruiters, Inc. ; Vic Haus:

Structuring a Sales Force Assigning by territory—preferred by cruise ship companies, airlines, food and wine wholesalers, and several corporate hotel chains Assigning by market segment—preferred by most hotel and resorts Assigning by key accounts— national/corporate sales Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Organizing the Sales Force • Two essential sales call reports – Initial Sales Call Report – Continuous Call Report • Account files to hold reports for high-potential accounts • Two filing systems 1. One standard file drawer to hold high-potential accounts (A, B, C accounts) and one accordion file to hold initial call reports for low (D accounts) 2. A trace card system to remind the sales manager to follow up on all accounts at an appropriate time. Copyright © 2006 Thomson Delmar Learning All Rights Reserved

Motivating a Sales Force • When does a challenging goal become an impossible and stressing one? • What is an acceptable level of pressure to place on salespeople? • Should a DOS establish sales quotas when the sales staff is being encouraged to establish long-term relationships with clients? If so, at what level should the sales quotas be set? • Should sales quotas be set at a level salespeople have only a 50 -50 chance of reaching? Copyright © 2006 Thomson Delmar Learning All Rights Reserved