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Unformatted text preview: Lesson 07 Evaluating Performance of our Sales Representatives Evaluating a Salesperson's Performance Why bother? What's the importance? Problems/difficulties? Why Evaluate: Raises, bonuses Promotions Retraining What to train Co. Strategic objectives Territory adjustments Terminations Evaluations Two Fundamental types: Results Based Behaviour Based 1. 2. Procedures for Evaluating Sales People
1. Establish basic policies 2. Select evaluation bases 3. Set performance standards 4. Compare performances to standards 5. Discuss results with sales people In Other Words: Goals vs. Accomplishments What is the Evaluation of our Sales Representatives based on? Output factors Input factors Qualitative factors Ratio measures Output Factors Used as Evaluation Bases Sales volume In dollars and in units By products and customers (or customer groups) By mail, telephone, and personal sales calls Sales volume as a percentage of: Quota Market potential (that is market share) Gross margin by product line, customer group, and order size Orders Number of orders Average size (dollar volume) of order Batting average of canceled orders Accounts Percentage of accounts sold Number of new accounts Number of lost accounts Number of accounts with overdue payment Input Factors Used as Evaluation Bases Calls per day (call rate) Days worked Direct selling expense As percentage of sales volume As percentage of quota Nonselling activities Advertising displays set up Letters written to prospects Telephone calls made to prospects Number of meetings held with dealers and/or distributors Number of service calls made Collections made Number of customer complaints received Qualitative Factors Personal efforts of the sales rep Knowledge Customer relations Personality/attitude Personal appearance/grooming Selling skills Team, enthusiasm, etc. There is a new trend in Qualitative Evaluation: 360 Degree Evaluation Evaluation by all peers, subordinates & manager Evaluation by peers/subordinates usually confidential Subordinates usually direct reports Ratios/Basic Performance Equations
Calls Orders Sales = Days worked x x Days worked Call Sales Orders x Sales = Days worked x Call rate x Batting average x Average order Example: Sales = 250 x 4 x .5 x 1000 Sales = 1000 x .5 x 1000 Sales = $50,000 Evaluation Bases
Possible Bases of Comparisons To Target/ Base
Sales volume Gross margin Orders Calls/day Days worked Selling time Selling expense Activities Knowledge Sales presentation skills Resourcefulness Customer relations Attitude Market Share * To Others * * * * * Source
Company records Company records Company records Sales force call reports Sales force call reports Sales force call reports OUTPUT * * * INPUT Historical * * * Goal * * * * * * * * * * * * * * * * * * * * * * * * * * * Company records Sales force call reports Sales manager Sales manager Sales manager Sales manager/customer Sales manager/customer Set Performance Standards Some Ideas to Remember Related to sales objectives Reliable/Stable over time Valid Comparability between reps Ability to measure changes in individual's performance Useful in making decisions Compare Performance to Standards Interpreting Quantitative Data Evaluating Qualitative Factors watch for "Haloeffect" Unimportant factors Validity Reprisals from reps Fairness Discuss the Evaluation with your Sales Representative What to remember? To be effective, I must...... Class Activity Please read Exercise 131 "Missed Quota" on pages 553554 of our text. Please answer the questions at the end of the exercise. Evaluation 1. 2. 3. 4. Will only work if: Goals are set and understood Accomplishments are measured against the goals Discussed performance There are consequences Call Productivity Ratios
Sales to Account = Dollar Sales # Accounts Average Order Size = Dollar Sales # Orders Growth Ratio = # New Accounts Total # Accounts Account Success = Accounts Sold Total # Accounts Expense Ratios Expense to Sales Cost per Call = = Expenses Sales Total Costs # of Calls Account Related Ratios
Sales to Account = Dollar Sales # Accounts Average Order Size = Dollar Sales # Orders Growth Ratio = # New Accounts Total # Accounts Account Success = Accounts Sold Total # Accounts ...
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- Spring '08