When the Prophet ﷺ is mentioned, responding respectfully with blessings is a sound habit. The detailed rulings governing salawat in specific parts of prayer are separate; the central point here is its merit.
The pattern مَنْ صَلَّى ... صَلَّى اللَّهُ promises divine generosity, not a commercial exchange that cancels other duties. A person should not treat reciting a number of phrases as a substitute for honesty, prayer, or the rights of others.
Example 1: Send blessings upon the Prophet ﷺ when hearing or reading his name.
Example 2: Combine remembrance with conscientious conduct and adherence to his teachings.