Identifying the Key Themes in Auditing Sales Force Management: Reviewing the Literature

Identifying the Key Themes in Auditing Sales Force Management: Reviewing the Literature

Paulo Botelho Pires, Pedro Cotta Cardoso
DOI: 10.4018/978-1-6684-3430-7.ch001
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Abstract

So far, academic research and subsequent publication of the results on how to audit salesforce is almost non-existent. As a result, the objective of this study is to identify the main themes associated with the management of the salesforce, using a literature review of the main academic journals and reference books. A historical review of auditing, its origins, and evolution was performed, followed by an identification of the main themes. The main themes identified were recruitment and selection of salespeople; training and education of salespeople; motivation of salespeople; and leadership, compensation, performance, and territorial allocation of salespeople.
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Introduction

Historical Review of Audit

The term audit derives from the Latin “audire” which means to listen. Over the years, the term auditing has been used with various meanings, all of them related to control, validation, inspection, and review. Although there are different beliefs about the origin of auditing, several authors consider that the concept of auditing, as it is known today, occurred with the industrial revolution. Santi (1988) considers that with the industrial revolution the introduction of registers gave rise to auditing. With the growth of the economic activity of companies, the need for new investments from outside the organization arose. These investors were not inside the organizations and therefore felt the need to evaluate the profitability and security of their investments requiring that audits of these companies were performed. Over the years one has witnessed a general increase in world economic activity, globalization, and consequently competition between companies. This fact forces organizations to have more and more concerns about their management and how they use their resources. Thus, the economic development caused a change in the audit guidelines. Investors became more concerned with the future profits of their investments and auditors were forced to change their way of acting, focusing more on confirming and controlling the risks that affect organizations, and meeting investors' expectations (Almeida, 2004). With this paradigm shift, organizations began to conduct audits to obtain the necessary information to support their decision-making and evaluate their performance, consequently giving a new meaning to audits. Arens (2012) considers auditing as an act of gathering and analyzing collected information, to verify the congruence between the information and the criteria previously established. Over the years, in addition to financial audits, several types of audits have been developed, such as environmental, management systems, and operational audits, among others.

Knowing that marketing teams and sales teams usually work closely together in organizations, it was decided to describe this type of audit that could be considered like sales team audits. As explained by Honeycutt Jr (1996), marketing audits are considered operational audits, thus differing from financial audits and compliance audits. Operational audits aim to examine the effectiveness and efficiency of the activities carried out by the organizations' managers. One of the first definitions, which remains to this day, for marketing audits came from Kotler et al. (1977), who described it as a comprehensive, systematic, independent, and periodic examination of an organization's marketing objectives, strategies, and activities of an organization, to identify areas or activities that are underperforming and to recommend actions to improve the organizations marketing performance. Unlike financial audits, which consist of analyses of accounts and accounting procedures that demonstrate the financial performance of the organization, marketing audits are a fundamental management control tool for organizations and contribute to planning and strategy definition. They not only focus on analyzing how the marketing department plays its role in pricing and advertising tasks but also on identifying where marketing resources are not being well applied and suggesting alternatives where those resources can be applied more efficiently (Brownlie, 1996). The marketing audit may have a central intelligence function, responsible for gathering, synthesizing, analyzing, interpreting, and making recommendations on the main strategic marketing decisions. To this end, it should be used the various existing sources of information that in conjunction with the marketing audit procedures allow to establish a complete matrix with the recommendations and results obtained (Vaña & Černá, 2012). It should also be noted that marketing audits should evaluate 6 main components concerning the organization's marketing (Kotler and Keller, 2012): 1) market environment audit; 2) marketing strategy audit; 3) organizational marketing audit; 4) marketing system audit; 5) marketing productivity audit; 6) marketing functions audit. The marketing audit process is thus divided into two categories. An external audit, which focuses on aspects that the organization can hardly control (market environment audit), and an internal audit, which focuses on all issues that are under the full control of the organization (marketing strategy audit, organizational marketing audit, marketing system audit, marketing productivity audit, and marketing function audit) (McDonald, 2015). Both audits can be conducted by internal or external auditors, and it is up to the organization to choose. It is, however, important to ensure that the audit is independent, periodic, complex, and systematic (Kotler et al., 1977). All organizations should perform marketing audits to improve their performance and the value perceived by their customers. However, this is still a new and underused activity for many organizations. In addition to the problems and barriers to its implementation, the fact that some organizations use only some of the components and in a non-systematic way contributes to the lack of clarity regarding its broad usefulness. However, this situation is evolving positively and these audits are increasingly used (Pimenta da Gama, 2011).

Key Terms in this Chapter

Motivation: Refers to the amount of effort a salesperson is willing to expend in the sales function. Some salespersons are self-motivated, where others need to be motivated to perform.

Training: Sales training entails the development of skills and techniques associated with building and exploring new sales opportunities, as well as closing sales.

Performance: Is the effectiveness of the sales force or the salespeople, both individually and, in the sales activities; the capability to accomplish sales goals.

Sales Territory: Is described as a group of present and potential customers assigned to a salesperson or a group of salespersons at a given period.

Recruitment: A procedure that includes the designing of job descriptions, advertising positions, screening candidates, preparing interview materials, and scheduling interviews.

Compensation: All the payments a salesperson receives for their work.

Leadership: Sales leadership is the art and science of managing the strategic direction of the sales activities and salespeople and managing the sales organization to achieve sales objectives.

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