Sales Strategies for Motivating the Sales Team: XYZ Tours - Essay Example

The travel and tourism industry is the most important industry in the global economy. Globalization has brought about phenomenal changes and the new consumer is looking for exciting experience (Trunfio, Petruzzellis, & Nigro, 2006). The complexity of the demand support by the bargaining power of the consumers has forced the tour operators to segment the market to cater to the needs of the consumer. XYZ Tours intends to capitalize on this trend. The company sells adventure tours off the coast of Surfer Paradise and is a leading tour operator in Australia. They sell tours which include water sports like surfing, body boarding, windsurfing, and visits to theme parks. The company is rapidly expanding to sell it services worldwide through the internet. The sales plan has been envisaged keeping the objectives in mind. Sales Team Objectives The company’s mission is to become the premium provider of adventure vacations for the 25 to 35-year old working men and women. The focus would be on beach packages and the objective is to generate minimum twenty enquiries per day initially by our promotional activity. Advertising would be done in a phased and planner manner and internet would also be used as a medium. Enquiries would also be accepted through the internet. New markets would be tapped to increase the market share. Collectively, the team expects to convert a minimum of 3 enquiries into sales, which effectively amounts to approximately 100 packages per month at a price of $2500 per package. This sounds a rather low figure but it is realistic and has been arrived at after a SWOT analysis. To break-even the company needs to sell at least 3 packages per day. Over the period of one year these figures are expected to grow and it is expected that after taking into account the insurance sales, the gross sales in the first year would be approximately $3,757,000. Estimated Sales Budget The sales budget is the first to be prepared before other budgets can be prepared. The sales revenue expected to be generated is $3,757,000 out of which the direct cost of sales is approximately 40%. Almost 50% of the direct sales cost can be allotted to guide services and 7% to sales and marketing costs. In the industry about 2% is considered as the operating cost which has to be accounted (BSA, 2001). It has to be noted that not all would be cash sales and about 20% could be credit sales, in which case the sales would be credited only after payments are received. Thus the revenue collection would differ from the sales that take place every month. Organizational chart Ever level of the organization should be in a position to understand the sales objectives, guidelines and procedures. Team work is essential in maximizing the benefit for an organization especially in sales. Each member of the team is accountable not just for their individual performance but for team performance as well. Tourism business is seasonal so staff would be taken on contract for the season to reduce the burden on fixed expenses during the lean season. XYZ Tours is co-owned by X and Y where X is responsible for planning, production and finance. Y handles the sales and marketing. Under the Sales Director, X, there would be two line managers each responsible for the four sectors in adventure tourism. There would be one guide under each line manager during season. Each of the line managers would be supported by four sales executives responsible for handling the enquiries and generating sales. They would directly report to the line managers while two executive responsible for the internet enquiries would report directly to the owner-director in charge of sales. Sales team selection & recruitment process The sales executive would be appointed with prior experience in the industry and the line managers should be equipped to handle the sales team including motivation and other HR functions. Out of the eight sales executives, six would be with prior experience but two would be fresher who would be trained and molded according to the corporate values. The selection process would be rigorous where psychometric tests would be conducted. The staff selected should be able to fit into the corporate culture. At the same time, the candidate should be agile and have positive attitude. People with sense of humor and who cherish team spirit are easily able to mold themselves in the culture that the organization wants. Overview of the induction process Excellent selling skills are vital and hence people would have to inducted and trained. The sales people will have to familiarize themselves with the industry, the company, its culture, the products, the importance of service in the tourism industry, the customers and their needs and other people in the organization (CIM, 2006). This requires detailed induction in each field because the sales people would not be able to achieve targets or generate sales unless they are sure of the expectations. Their conception from the beginning has to be clear. They need to know the position of the company in the industry the competitors’ strengths and the company’s weakness. They would need to know the differentiating factor in the products on offer by XYZ. The database of the customers would have to be given to them to get acquainted and understand the needs of the individual customers. The sales objectives would have to be explained to them as well. Overview of the compensation methods The compensation would match the industry practices in terms of salary and commissions. In the travel and tourism sector, the delivery of high quality service to customers is the key factor affecting the performance of firms. The basic salary is always low so that there is a motivation to generate sales. The package offered will be an OTE or on-target earnings which implies that they are assured of the amount once they attain the target (CIM, 2006). The commission structure would increase of the performance exceeds the targets. If a new product is launched or a new market tapped, they would be offered higher incentives to capture the market. A map of sales territories and sales targets Targets would have to be linked to incentives like commissions and bonus. The requirements would be broken down into new sales, renewing old customers and contacting lapsed customers. The new sales should be kept with the experienced people and under direct supervision of the director while the new recruits could be given the responsibility to contact the lapsed customers. The sales targets would be higher for the people experienced in the field which would be at least six packages per head per month. The new sales people would be allowed two months to familiarize with the industry, company and the products before any sales is expected of them. Targets set would be reasonable and in line with the territories allotted to them otherwise it may become demotivating (CIM, 2006). At the same time, if the targets are too easy, complacency may set in which could lead to loss sales. Sales strategies for motivating the sales team According to Herzberg two factors act upon the motivation of employees – the hygiene factors and the motivators (Tietjen & Myers, 1998). Motivators cause positive job attitudes because they satisfy the workers need for self-actualization. These motivators have the potential to give job satisfaction and include recognition, achievement, growth prospects, responsibility and the work itself. The sales strategy would allow each personnel to surge ahead with conviction and commitment. Responsibilities would be allotted and achievements recognized. Open communication channels bring a feedback to the organization which helps to amend the strategy if necessary. McClelland (2006) contends that if the goals and targets are achievable the sales team is motivated to achieve them as the risks involved are high and so are the outcomes. Hence targets should be realistic, due recognition should be granted and proper induction and training carried out in the beginning. Techniques to evaluate and monitor the effectiveness of your sales team The conversion rate would have to be taken into account determining how many approaches are required to generate one sale. If a particular sales executive is unable to generate sales or requires more approached than normal, it would be essential to understand his problems. Some territories may be easier to tap than others which would have to be given due consideration. It is essential to consider how the sales people approach the market and what impressions they make on the market. Individual customers could be contacted to determine the impact. At the same time, an opinion survey from the customers would help to determine the efficiency level of the sales team. It has been observed that lack of role clarity leads to low performance. Work brings fulfillment and if the performance declines, the managers should give it due importance because it is not due to the lack of facilities or enforcement of rules by the management but the job role and expectations should be clearly laid out (Tietjen & Myers, 1998). References: Auxillium West, Corporate Culture, 27 May 2007 BSA (2001), YouCan Adventures, Canada / British Columbia Business Services Society, 27 May 2007 CIM (2006), Recruit and manage sales staff, 27 May 2007 HRM, What is HRM?, 27 May 2007 McClelland, D. (2006), Human Relations Contributors, Achievement Motivation, ACCEL Team, 27 May 2007 Tietjen, M. A. & Myers, R. M. (1998), Motivation and job satisfaction, Management Decision 36/4 [1998] 226–231 Trunfio, M., Petruzzellis, L., & Nigro, C., (2006), Tour operators and alternative tourism in Italy, International Journal of Contemporary Hospitality Management Vol. 18 No. 5, 2006 pp. 426-438 Read More