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    Performance Evaluation & Control of Sales Force

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    Kushal A. Tambade
    This document discusses performance evaluation and control of sales forces. It provides an overview of gathering both qualitative and quantitative performance measures, evaluating performance, and taking appropriate actions. Key aspects covered include setting objectives and standards, measuring and comparing performance to objectives, and determining appropriate sales strategies. Both behavioral and output-based measures are examined, as well as common evaluation methods like graphic rating scales, ranking, and objective setting. A case study on Eureka Forbes' sales force compensation plan is also summarized.

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    Performance Evaluation & Control of Sales Force

    Uploaded by

    Kushal A. Tambade
    82 views28 pages
    This document discusses performance evaluation and control of sales forces. It provides an overview of gathering both qualitative and quantitative performance measures, evaluating performance, and taking appropriate actions. Key aspects covered include setting objectives and standards, measuring and comparing performance to objectives, and determining appropriate sales strategies. Both behavioral and output-based measures are examined, as well as common evaluation methods like graphic rating scales, ranking, and objective setting. A case study on Eureka Forbes' sales force compensation plan is also summarized.

    Original Title

    Sales Force Evealuation

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    This document discusses performance evaluation and control of sales forces. It provides an overview of gathering both qualitative and quantitative performance measures, evaluating performance, and taking appropriate actions. Key aspects covered include setting objectives and standards, measuring and comparing performance to objectives, and determining appropriate sales strategies. Both behavioral and output-based measures are examined, as well as common evaluation methods like graphic rating scales, ranking, and objective setting. A case study on Eureka Forbes' sales force compensation plan is also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    82 views28 pages

    Performance Evaluation & Control of Sales Force

    Uploaded by

    Kushal A. Tambade
    This document discusses performance evaluation and control of sales forces. It provides an overview of gathering both qualitative and quantitative performance measures, evaluating performance, and taking appropriate actions. Key aspects covered include setting objectives and standards, measuring and comparing performance to objectives, and determining appropriate sales strategies. Both behavioral and output-based measures are examined, as well as common evaluation methods like graphic rating scales, ranking, and objective setting. A case study on Eureka Forbes' sales force compensation plan is also summarized.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 28

    Performance Evaluation & Control of Sales Force

    Agenda
    Overview Purpose Gathering information Measures of performance
    Qualitative Quantitative

    Evaluation of performance and action Case study

    Overview
    Sales force evaluation is the comparison of sales force objectives with results.
    Profit contribution Market share Customer satisfaction Customer service Expenses Company Regions Products Salespeople Accounts

    Set Objectives

    Set Performanc e Standards

    Take Action

    Determine Sales Strategy

    Measure and Compar e

    Purpose
    The prime reason for evaluation is to attempt to attain company objectives.

    Attainment and setting of objectives

    Compensation

    Sales Force Evaluation

    Training

    Motivation

    Gathering Information
    Acquiring the right information is crucial for evaluation and objective setting.

    Product/Brand related sales Daily/weekly report Expense claims Problems/opportunities revealed

    Sales Management (Qualitative)


    Field visits Performance indicators Attitude/Work habits Organizational ability

    Customer-seller relationship Delivery Product reliability

    Company Records
    Past sales levels Expense levels Calls achieved

    Individual Salesperson (Quantitative)

    MR Projects

    Determinants of sales force performance


    Motivation Skill level Job satisfaction Role perception Personal factors Ego drive Empathy
    Environmental factors Organizational factors Communication & work flow Compensation system Sales management functions Sales force planning Forecasting Territory management Compensation Control

    Internal Factors

    External factors

    Quantitative Measures of Performance Output Measures


    Sales Revenue Profits/Profit Margin Sales per account Sales revenue as % of potential No. of orders No. of new customers

    Input Measures
    No. of calls made
    Calls per potential account

    Calls per active account


    No. of quotations No. of calls on prospects

    Performance Measurement Ratios


    1. Selling expense ratio 2. Territorial net profit

    3. Territorial market share


    4. Sales coverage effectiveness index 5. Call frequency ratio 6. Order per call ratio 7. Average cost per call 8. Average order size 9. Average order value= Sales revenue/no. of orders

    Performance Measurement Ratios


    1. Strike rate = Number of orders / Number of quotations 2. Sales revenue per call ratio 3. Profit per call ratio 4. Order per call ratio 5. Average order value= Sales revenue/no. of orders 6. Prospecting success ratio= No. of new customers/No. of prospects visited 7. Average profit contribution per order= Profits generated/No. of orders Unfairness, in terms of sales results, can be exposed by Total salary (including commission)/sales revenue Total salary (including commission)/profits.

    Qualitative Measures of Performance

    Sales related activities

    Features
    More subjective

    Selling skills

    Done during sales visits Assess the productivity and profitability


    Personal characteristics

    Qualitative Measures of Performance


    Sales skills Ability to close the sale Customer relationships Are customers well satisfied with the service? Self-organisation How well does the salesperson carry out the preparation? Product knowledge Does he know his own products and its customer benefits and applications? Co-operation and attitudes How will he respond to the objectives determined by management?

    Salesperson Evaluation Matrix


    Quantitatively measured results Averag e
    -Praise -Reward -Promote

    Good

    Bad
    -Limited Praise -Guide -Train

    Good
    Qualitatively measured results Averag e

    -Limited Praise -Advise -Educate

    -Discuss -Train -Punish -Remove

    Bad

    Key Issues in Evaluating and Controlling Salesperson Performance

    Outcome-Based Perspective
    Focuses on objective measures of results with little monitoring or directing of salesperson behavior by sales managers

    Behavior-Based Perspective
    Incorporates complex and often subjective assessments of salesperson characteristics and behaviors with considerable monitoring and directing of salesperson behavior by sales managers

    Perspectives on Salesperson Performance Evaluation


    Outcome-Based Little monitoring of people Little managerial direction of salespeople Straightforward objectives measures of results Behavior-Based Considerable monitoring of salespeople High levels of managerial direction of salespeople Subjective measures of salesperson characteristics, activities, and strategies

    Dimensions of Salesperson Performance Evaluation

    Behavioral

    Results

    Salesperson Performance

    Professional Development

    Profitability

    Criteria for Performance Evaluation


    Behavior Consists of criteria related to activities performed by individual salespeople Sales calls, customer complaints, required reports submitted, training meetings, letters and calls
    Should not only address activities related to short-term sales generation but should also include non-selling activities needed to ensure long-term customer satisfaction.

    Criteria for Performance Evaluation

    Professional Development Assess improvements in certain characteristics of salespeople that are related to successful performance in the sales job

    Characteristics include - Attitude, product knowledge, initiative and aggressiveness, communication skills, ethical behavior

    Criteria for Performance Evaluation


    Results Salespeople measured objectively based on results such as sales, market share, and accounts A sales quota represents a reasonable sales objective for a territory, district, region, or zone Some research shows that rewards for achieving results have a negative effect on performance and satisfaction

    Criteria for Performance Evaluation


    Profitability Salespeople have an impact on gross profits through the specific products they sell and/or through the prices they negotiate for final sale. Salespeople affect net profits by the expenses they incur in generating sales. Criteria Examples
    Net profit dollars Gross margin per sale Return on investment Number of orders secured Selling expenses versus budget

    Performance Evaluation Methods: Characteristics any method should include:


    Job Relatedness Reliability Validity Standardization Practicality Comparability Usefulness

    Performance Evaluation Methods:


    Graphic Rating/Checklist Methods:

    Salespeople are evaluated using some type of performance evaluation form


    Especially useful in evaluating behavioral and professional development criteria

    Forms may be filled out by customers at times


    Disadvantage is providing evaluations that discriminate sufficiently

    Performance Evaluation Methods: Ranking Method:

    Rank all salespeople according to relative performance on each performance criterion These methods force discrimination as to the performance of individual salespeople

    May be complex at times


    Rankings only reveal relative performance evaluation

    Performance Evaluation Methods:


    Objective-Setting Methods

    Management By Objectives (MBO)


    Mutual setting of well-defined and measurable goals within a specified time period. Managing activities within the specified time period toward the accomplishment of the stated objectives. Appraisal of performance against objectives.

    Performance Evaluation Methods:


    Behaviorally Anchored Rating Scales (BARS)

    Links behaviors to specific results Salespeople are used to develop performance results and critical behaviors Positive feedback about behaviors may be more affective than positive output feedback

    Case study: Eureka Forbes


    Euro Champs

    Supervision

    Morning field meeting Cold calling Daily activity reports, depositing payments, and request delivery for closed sales Role-playing and mock demonstrations for new recruits Keeping up to date with product information in terms of innovation and upgrades Closing sales, collecting payments, making courtesy calls on existing customers, and generating references or retraining customers

    Reporting and feedback is 3 times in a day At the morning meeting before heading out on cold-calls At the midday meeting to report on door knocking results and morning demos And at the end-of-day review to register afternoon follow ups, demos, and sales numbers

    Evaluation and Compensation


    Evaluation of a Euro Champ
    Base salary is scaled against length of service, total sales, and average sales over the last 6 months A contingency compensation scheme based on number of units sold could be invoked in the event of marriage or hospitalization. An averagely successful salesman earns twothirds of his monthly earnings through commissions This emphasis has an automatic sieving effect: anyone who cannot learn to sell does not get commission and hence earns less and exits very quickly.

    Compensation
    Salary Rent allowance A special pay A demo allowance (for customer sales specialist probationers) A leave travel concession Holiday bonus Medical reimbursement A travel reimbursement

    EFLs Compensation Plan

    Doesnt reward only on sales volume Points are given on successful completion of various stages of selling process and compensation linked to the points scored

    An averagely successful salesman earns two-thirds of his monthly earnings through commissions This emphasis has an automatic sieving effect: anyone who cannot learn to sell does not get commission and hence earns less and exits very quickly

    Thank you

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