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FAQ for Sales Management Simulation (Instructors)

SALES MANAGEMENT SIMULATION (SMS): Instructor FAQs

How can I know that students in my class are paid-up participants?
From the time, you register the course until the course start date, you will receive weekly updates on participant registration. You may have to remind students that only students who pay can be part of SMS.

Can I choose which participants are in which teams?
Yes. You make the assignments of participants to teams. You also make the assignment of teams to industries.

Is there any limit on the number of participants to a team?
No, but we recommend teams of 3 to 5 participants.

Is there any limit on the number of teams to an industry?
No, but we believe 5 teams is best.

Is there any limit to the number of industries?
No. With two or three industries, the task of identifying differences in strategies followed, between industries, is considerably easier than with five or six industries.

There are three demand profiles graphed-out in the Instructors Manual -- Developing, Saturating, Stagnant. Can I choose which one?
Yes!

I shall choose one of the three demand patterns; what do participants know about market demand?
Participants know about the three demand patterns. They know that either pattern is possible (from their manual). The instructor knows which pattern will occur. Participants are told that by tracking market evolution, and buying market research, they will, in time, be able to determine which demand prediction was more accurate.

How does the demand feature in market research report work?
Market research exists for the predicted pattern four quarters in the future. The selected demand pattern is updated based on decisions participants make. For example, if prices are lower than expected, forecast market demand, as shown by the market research report, will follow the predicted pattern but move upwards.

How can I ensure that every member of a team is in fact participating?

    Although SMS permits a team to collectively enter one set of decisions, it also allows the instructor to require each team member to suggest the entire set of decisions. These are reviewed by the team leader who, individually (or collectively) iterates to the final decisions. Making suggestions ensures that every team members participates: suggestions are recorded and can be viewed by the administrator. We suggest the assigned team leader rotate, so each team member has this experience. These options are built into SMS. If this option is not employed, the instructor must use other means to encourage and assess participation by individual team members.

    What key principles underpin SMS?
    There are three principles:

    Principle 1. Choosing the right salary/commission split is critical for securing motivated behavior. The default ratio is 70:30, salary: commission. The instructor controls this matter by specifying the optimal point, default or 90:10, or 60: 40 – Markets, Staff, Sales Performance.

    Principle 2. Additional sales training has considerable benefit for many salespeople. Salespeople vary in their base rating (immediate competence), quarterly experience gain (learning on the job), and retraining. In SMS, firms can significantly enhance salespeople ability with high retraining factors -- removal from their territories for one quarter so they receive advanced training. Increased training duration reduces Retraining Decay -- Markets, Staff, Sales Performance.

    Principle 3. When salespeople believe they are paid less than they deserve, they are more likely to resign. SMS computes the likelihood of a salesperson’s quitting based primarily on compensation not matching current expectations. Personal reasons can add to the probability of quitting. Salespeople warn SMS participants when they are approaching their quitting threshold, allowing them to take corrective action.

    Do I have the ability to set any of the parameters in SMS. If yes, what are they? And how do I do this?
    SMS have been set to demonstrate a set of sales management principles we consider key. To illustrate, we have set the optimal salary/commission ratio at 75 percent salary, 25 percent commission. This default can be changed by the SMS administrator -- Markets, Staff, Sales Performance, Salary-Commission ratio.
    A second illustration relates to salespeople resignations. In a developing industry, job opportunities for experienced salespeople are high. We have set the quitting threshold at 100 -- Markets, Staff, Employee Quitting. At a 150 setting, fewer salespeople would resign. The SMS administrator can alter this number.
    The instructors’ manual explains these options in detail.
    We recommend that the instructor tests the effect of changing these parameters by comparing results in a two-team industry. You may discover that small changes have a larger than anticipated effect s than you anticipated.