Evaluating Sales force

Performance

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 Content
 Sales force & its importance for a company.
 Sales force performance.
 Performance evaluation- purpose & reason.
 Dimension of salesforce performance evaluation.
 Sales force performance evaluation process
 Determinants of sales force performance.
 Criteria for the evaluation- qualitative &
quantitative
 Establishing standards
 Monitoring & feedback system.
 Conclusion.
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Sales force & its importance :-

Sales force is the number of sales person employed by a company to :-

- promote its product .

- create customer.

- represent the company in the market.

- to generate profit for the company.

-to7/24/2019
deal with customer query & so an..
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Sales force performance :-

-work done by sales force.

-Impact of sales force onto the company ,on profit etc is the
result of sales force performance.

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 Performance evaluation :-
 Evaluation is to measure the performance of sales persons.

 A important process which enhances the way organization is managed &

provides recommendation for further improvements.

 It is a critical function. Steps to Setting

improve objective

 It constitutes ‘comparing objectives with results.

 Provide feedback.
Actual
feedback work done
 Take steps to further improvement.
Comparing
actual work
with
objectives
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 Purposes :-

 It is vital for an organization to evaluate the performance of sales

force consistently & frequently, so that it would be able to close deal
quickly & move to the next one.

 To monitor the performance & ensure that it is in alignment with

corporate goals & objectives.

 To keep track on progress.

 To take decision regarding compensation, promotion & transfer.

 To determine the specific training & counselling needs of individual

sales people & the overall sales force.

 To provide information for effective human resource plan.

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 To identify criteria that that can be used to recruit & select
sales people in the future.

 To advise sales people of work expextations.

 To motivate sales people.

 To help sales people in setting career goal.

 To enhance communication between sales person & sales

manager.

 To improve sales person performance.

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Dimension of sales force performance
evaluation :-

behavioral results

dimensions

professional
development profit

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 Behavior:

Consists of criteria related to activities performed by

individual salespeople.
•Sales calls,
•customer complaints,
•required reports submitted,
•training meetings,
•letters and calls

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

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 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

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
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Sales evaluation process:

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Determinants of sales force performance:-

 Changing dynamics of the market have increased the pressure on

sales force.

 Many studies were conducted to know the factor which will

influence sales force performance.

 They are :
- internal factors
- external factors

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Internal factors External factors

 Motivation  Environmental factors

 Skill level  Organizational factors
 Job satisfaction - communication & work flow
 Role perception - compensation system
 Personal factors  Sales management function
 Ego drive - sales force planning
 empathy
- forecasting
- territory management
- compensation
- control

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Criteria for sales force evaluation:-
Qualitative methods are :

-Personal observation by sales executives.

-Merit rating
-Customer opinion of salesmen.

Quantitative methods are :

-Analysis of sales record & reports.

-Comparison of salesman’s performance with quota.
-Ratio analysis.
-Profit & loss statement.
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Establishing standards :-

 Carrying out the sales force performance evaluation process by using the
outcome-based
behavior-based
professional development measure.

 By establishing different types of goals & objectives.

for ex.- increasing sales by 5% each year ovr the next five year.

 By developing the sales plan.

e.g. increase market share by 4%, reducing defections by 12% , increasing the
new customer base by 10% each year.- source: flying colours ltd.

 By setting sales force performance standards

 Allocate & efforts through sales quotas.

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 Monitoring & feedback system:-
(360 degree feedback system)
Sales Manager

Evaluation
 Salesperson is evaluated by
multiple raters.

 It helps salespeople better Salesperson

understand their ability to add
value to their organization and
their customers

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 Conclusions :-
1. Most evaluate on an annual basis

2. Most combine input and output criteria which are evaluated using quantitative
and qualitative measures

3. When used, performance standards or quotas are set in collaboration with

salespeople

4. Many assign weights to different objectives and incorporate territory data.

5. Most use multiple sources of information

6. Most are conducted by the field sales manager who supervises the salesperson

7. Most provide a written copy of the review and personal discussion.

8. Helps salespeople better understand their ability to add value to their

organization and their customers

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