Dinesh Divekar
Business Mentor, Consultant And Trainer
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
SankushB
Manager
+1 Other

HI, Is it practical to link petrol conveyance (fixed amount) to sales targets? For e.g. If the person's average conveyance is 1000/- and his target is 1lac, based on the target achievement, conveyance would be re imbrued allowing the company to link the same to minimum sales.
1st October 2015 From India, Delhi
I do not think it is prudent to link conveyance amount to the sales target achieved when such amount is paid on the basis of reimbursement of expenses,incurred by the sales personnel It is not necessary that every contact/visit to the clients, present or prospective, made by the field sales employee may convert into sales either new or additional but nevertheless he undertakes the travel and invests his time and skills in meeting and influence their decision for sale.Conveyance reimbursement cannot be equated with an incentive which can be linked to sales targets.
B.Saikumar
HR & Labour Law Consultant
NaviMumbai
4th October 2015 From India, Mumbai
Dear Sankush,

Your challenge is different and the solution you would like to adopt is different. Your main challenge is low strike ratio of the sales calls. Strike ratio is calculated as (Number of Sales Conversion*100/Total Sales Call made). If you want to increase the strike ratio, then you need to train your salespersons properly.

As far as sales training is concerned, let me ask you few questions. These are as below:

a) What is your product or service?

b) Who are your customers? How have you categorised your customers?

c) Is there absolute uniformity amongst salespersons as far as handling of the sales call is concerned? If given a chance to dozen salesperson to handle particular sales call, will they handle exactly in same fashion or will there be variation?

d) This question is based on (c) above. Sales productivity depends on the customised sales process that the salespersons implement. Do you have well-researched, well-documented sales process? If yes, then how do you measure the process compliance?

e) To improve the sales productivity, have you generated knowledge assets as to why customers buy and why customers do not buy, as to why sales call fail and why sales call succeed?

f) Lastly, what is total sales expenditure? Of this, what per cent is petrol allowance?

Putting a cap on petrol allowance is poor way of controlling sales expenses. What you need to do is train your salesperson and improve the sales productivity. Rather than saving on tidbits, think of selling lavishly and earning lavishly!

Thanks,

Dinesh Divekar


4th October 2015 From India, Bangalore
Hello Sankush,

Can you mention the reason(s) for this query?

Dinesh Divekar has hit it on the spot--'Your main challenge is low strike ratio of the sales calls'.

Like Saikumar & Nathrao mentioned, relating/linking Sales targets to Conveyance allowance not just is 'not right' but ALSO counter-productive. You are giving scope for new problems that you COULD find more tougher to handle [including possibly revolt by the Sales team, in the WCS].

First & foremost, sit with the Sales Head & figure-out the PROBABLE causes for this situation. And ALSO sit with the Sales team WITHOUT the Sales Head's presence [gives you the actual ground realities without any fear from the team].

Then collate the inputs you got & discuss with the Company/Division Head/CEO/MD. ONLY then can you begin to THINK of solutions.

While I know I am MAKING assumptions here, my guess is that it's a very accurate assumption.....had some work gone into finding the causes for this situation, frankly, the 'relating/linking Sales targets to Conveyance allowance' WOULDN'T even have been considered as a possible solution at all.

While one definite reason COULD be what Dinesh Divekar mentioned--poor/improper training--the other reasons COULD also be poor targeting of prospects, low motivation of sales team [for whatever reasons], poor management style of the Sales Head, unreasonable sales targets, lop-sided hiring of the sales team, etc, etc--all of these are just POSSIBILITIES, The REAL reason(s) is/are for you to figure-out.....and pl be mentally prepared to discover that there COULD be multiple reasons.

IF you have already done some groundwork, then it's better to mention the details here so that the members of this Forum DON'T have to keep guessing each & every possibility.

And Yes, pl confirm the sector your Company is in. Factors/reasons can vary widely between sectors.

Rgds,

TS
6th October 2015 From India, Hyderabad
You can fix target of sales, but cannot link with the limit of petrol. If you link both together that would be quite an unwise and unproductive decision on your part. Nobody would like to pay petrol cost from his own pocket just to increase the sale of the company products. You can't avoid employee attrition in that case. Recruitment cost can go much high besides affecting productivity of the company due to frequently recruited fresh hands if the employees start leaving the company due to such unwise decision.
6th October 2015 From India, Delhi
Hello Work at Home Club, BTW, I haven’t got the eBook even though I registered & got an Ack about a week ago. FYI pl. Rgds, TS
7th October 2015 From India, Hyderabad
Hi TS, Our schedule is on first come first served basis. Hope you would like to bear with us by waiting for your turn just for 2-3 days more.
7th October 2015 From India, Delhi
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