Sales Management Simulation (SMS): FAQ for Participants
Do I have to purchase a license to play SMS?
Yes. All players must purchase an individual license.
Shall I make all decisions in SMS by myself?
No. You will be part of a team.
Can I select my own team members?
Your instructor will decide how to assign participants to teams.
What preparation should I do before the start of SMS?
Study the participant manual. You will be able to read the manual online when you purchase a license for the simulation.
What sales management decisions are included in SMS?
- Recruiting and selecting salespeople
- Determining how much and when to train salespeople
- Territory management: where to place salespeople and when to move them
- Whether or not to concentrate salespeople into a few territories
- Salesperson compensation: salary, commissions, contests
- Pricing for premium and base products
- Leadership through time-allocation policies:
- Effort on the base product versus the premium product
- Time spent selling to customers versus internal selling
- Market monitoring: competitive pricing, demand growth, compensation comparisons, Net Promoter Score (NPS), and company reputation
Is the industry a high-growth market?
Research suggests the market could have high continuous growth, high growth but early maturity, or a market that does not take off. You will need to track market projections.
How many salespeople can a firm hire every quarter?
Maximum: 5. Successful recruiting requires offering a salary such that total compensation meets or exceeds expectations. SMS assumes no competition among firms in hiring salespeople.
Can different salespeople within a firm be paid different salaries?
Yes, both during recruiting and throughout SMS. Individual salaries can be adjusted quarterly. Commission rates remain the same, though total commissions may vary based on territory factors, salesperson motivation, and ability.
Can my firm fire salespeople?
Yes, at any time. Salespeople may also resign due to compensation not meeting expectations, distance from home to their territory, or personal factors.
How much training should a salesperson receive?
One quarter of training is mandatory. Additional training is optional and can be spaced across quarters or concentrated at one time.
Does a home territory assignment affect performance?
Yes, positively. Salespeople can more easily build client relationships.
What happens if my firm under-produces?
SMS allows firms to meet demand through unlimited overtime production. However, overtime costs more per unit than inventory storage costs. Extremely high inventory levels may trigger a bank loan to finance the inventory.
In quarter 1, must the firm place salespeople in different territories?
No. Concentrating salespeople in specific territories can provide a competitive advantage in those areas, but you may miss sales opportunities in unstaffed territories.
How can the firm motivate salespeople?
Compensation, including salary and commissions, is the primary method. Both have different effects on motivation.
What time-allocation policy decisions can the firm make?
- Effort on the base (less expensive) product versus the premium product
- Time spent on internal tasks (e.g., service support, technical support) versus external tasks (e.g., customer interactions)
What indicates success?
Success is measured by:
- Cumulative profit, summed over quarters
- Market share
- Net Promoter Score (NPS)
- Company reputation
There are trade-offs among these criteria. Equal weighting of each may be the best way to characterize success, but your instructor may emphasize particular criteria.
The answers to these FAQs are described in greater detail in the Participant Manual.