Guide Sales Force Performance Measurement

Sales Force Management Tips

Contents:

Managing and measuring sales performance to grow results

Similarly, a salesman who gives dealer sales assistance, merchandising and management advice has the favourable opinion. A good customer and dealer opinion is a mark of his success and a bad opinion is a sure sign of poor performance. These summary records give condensed account of his sales, commission, travel expenses, number of calls, loss of working day, new accounts opened, performance in relation to quota, of products sold and other facts about his activities.

Any deviation from a normal performance can be quickly noted and called to attention of the salesman concerned. It also shows outstanding performance of some salesmen so that recognition can be given to those who deserve it. Such analysis is not only needed for control but for future planning of operations and designing the programmes. Each salesman is judged on the basis of his performance in relation to his quota.

Though separate quotas may be established for sales volume, sales expenses, gross-profit and activities, the most popular is sales volume quota expressed in terms of so many units or rupees for a specific period. Such a figure spelled out is arrived on the basis of a detailed analysis of market potential, past sales performance estimates by salesmen and dealers, new products or product of product improvements, advertising, competition, the ability of salesman, judgment of sales executive and the prevailing economic conditions.

Such a sales quota can be for all the products in a line or for individual product or group of products, for an area say, branch or district or a region, for a specific period ranging from a month to a year or for individual customer or a group of customers and for a call or sale. On the basis of comparison, the sales executives appraise the effectiveness of each salesman and take necessary action. Certain ratios are much helpful in measuring sales performance in analysing sales reports and records that the sales office has.

Take the example of sales expenses ratio. This ratio establishes the relationship between the sales expenses and the sales volume. If annual sales are say Rs. Taking the specific conditions prevailing in each sales territory such norms can be fixed and the actual can be compared with these norms and deviations can be analyzed for taking necessary corrective action. This being an expenses ratio, it is dangerous for a salesman to exceed this ratio or percentage.

Similarly, sales performance can be appraised on the basis of sales profit ratio. This ratio speaks of the rate of profitability in terms of profits. Say, a firm has an estimated sales of Rs.

Managing and measuring sales performance to grow results

Such ratios can be: In case of new business, this ratio can be of new accounts to total accounts. Through ratio analysis is not fully used in appraising sales effectiveness, it can be a valuable guide if one uses it in cross-verification way. It is a recognised fact that ability to sell at a profit is a clear indication of excellence of sales performance.

It is quite possible that the two salesmen selling the same articles may give different profits; this may be due to the differences in territory size, demand pattern, nature of products sold, nature of accounts dealt with, market potential, calibre of outlets, economic conditions and so on. Often they don't know what they should really expect from their sales representatives. Okay, now I understand what you meant by the five errors which owner-managers make.

But I'm confused about the so-called criteria in your Exhibit 1. Are any of them usable for measuring the performance of sales representatives? Some of them are excellent. The trick is to use the yardsticks that can be expressed in numbers. The best one in Exhibit 1 are items 1, 4, 5, and 8.

I can see that item 1, "Volume in sales dollars," item 4, "Number of calls made on existing accounts," can be expressed in numbers. And also item 5, "Number of new accounts opened," and item 8, "Dollars spent in entertaining customers". All four of these items are especially good when they are accompanied with target dates such as month-end, quarter-end, or year-end. But I believe there are better criteria than those we've been talking about. I'd like to hear about them. But first, what about the other items shown in Exhibit 1? The other itemscanaffect a sales representative's performance.

That means you may have to make judgments in these areas. I would hope your judgment would be made after you give the most weight to the items that can be measured in numbers But there's more to sales force performance than merely compiling sales figures.

Forgot Password?

Actually, the answer to that question is planning for better performance in the future and correcting past performance with which you are not satisfied. You do this by finding out what profit contribution each sales representative makes. I'm about to get ahead of myself. First, let's look at this guide for planning, measuring and correcting a sales representative's performance. One goal of measuring a sales representative's performance is improvement assistance.

Cloak and Dagger: Scrabble.
How I Stole Johnny Depps Alien Girlfriend?
Performance Appraisal of Sales-Force?

The three steps in bringing about improvement when it's needed are: Get the sales representative's agreement about goals to attain or exceed for the next year:. Get the sales representative's agreement about expenses to stay within for the next year:. Meet with a sales representative if his or her record is 10 percent or more off target. Review the number of calls made on each significant account plus what he or she feels are his or her problems and accomplishments. In addition, you may need to do some of the following to help improve performance:.

Transfer accounts to other sales representatives if there is insufficient effort or progress. But to answer your question about profit contribution - it's a term I use to designate what's left in the sales dollar after you subtract direct costs and a sales representative's controllable costs. Yes, but the important thing is to keep your eye on what the sales representative does to it.

Additional costs such as price cuts, non-reimbursed overtime or makeovers caused by them, claims or credits due to their errors, and their expenses over what you'd budget for - any of these reduce their profit contribution.

Language selection

But how should you use this information to measure your sales team's performance? Way back in the 20th century, we measured revenue. Knowing how to effectively measure sales performance is essential to any assign one or a combination of the following four measures to any sales force job .

That looks like a good way to get owner-managers to think in terms of the dollars their sales representatives bring in to cover overhead and profit. Of course, I don't necessarily have to let my sales force know what my direct costs are.

But I do have to urge them to sell products with high profit margins. Or if they're selling products with low profit margins, they have to bring in big volume. Incidentally, you don't have to have percent accuracy on your direct costs for each product or product line. You can use standard estimates or annual estimates, as long as your sales representatives know what figures or numbers you're basing your performance evaluations on.

The product Line A might have a profit contribution credit of 40 percent of the sales dollar; Profit Line B, a contribution of 25 percent; and Profit Line C, a contribution of 10 percent. Again, this is aside from any sales representative's controllable costs.

Measuring sales performance

I believe the sales budget items in your "Guide for Improving Sales Representative's Performance" Exhibit 2 are self-explanatory. So my next question is: How can a sales representatives plan the number of calls that should be made on accounts? That's largely a matter of arithmetic. After all, there are only so many calls a sales representative can make in a year. Depending on selling style, one sales representative might average 4 calls a day, another 6, and another 8.

Say you have a sales representative who averages 6 and who is free to make calls on working days a year - that's potential calls. How should the sales representative keep track of the number of calls made on accounts?

Sales Force Management Tips;
Predicting future sales growth!
Measuring Sales Force Performance!
Ode To Ayr and other Poems!
Venus in Furs (Penguin Classics)!
Sales Force Performance Measurement.

One way is to have each sales representative turn in a regular report on calls made. Another way is to leave it up to each of them to record dates of calls on account cards. I prefer the second way. My sales force knows I wouldn't have the time to read all the reports every week. Furthermore to find out what my sales force is really doing takes an account-by-account review with each one. In the "Measuring" section of your "Guide" Exhibit 2 , why don't you use weekly figures instead of year-to-date volume?

You can have weekly figures if you want them. But year-to-date figures average out the very good or the very bad periods. With them, you're better able to see how each sales representative is progressing toward annual goals. The measuring job looks fairly simple when each sales representative has profit contribution goals and has planned his or her other calls.

But you still have to use judgment. You have to judge if, and when, you need to take corrective action. Unless you take the appropriate corrective action listed in the "Correction" section of the "Guide" Exhibit 2 , measurement is a waste of your time and money. I can see that the foundation of measuring and correcting lies first in planning - by defining the yardsticks in numbers that are profit-orientated. If you are interested in a half year duration see 6 month car insurance for helpful tips on the topic. How about getting more favorable premiums costs for younger drivers?

Here is another list of drivers insurance useful articles, As for helpful tips regarding no deposit premium payments see car insurance with no deposit and for a list of low cost brokers, agents and companies see car insurance with no deposit companies.

Read the following informative article if you are looking for better rates for the young drivers in your family, cheaper vehicle insurance for young drivers. Now, for discovering new ways to get lower quotes go to general car insurance Read this article if your after high risk car insurance information.

How about getting a better deal on first time driver? It may come a time that you'll be interested in canceling your policy, use this article for the instruction of how to do it. Our drivers insurance hub page features a list of guides that can surely help you get dirt cheap car insurance for teens drivers rates. For those of you who seek cheap quotes for a shorter term policy, read this article. If you have first drivers in your family look here for useful advice regarding cheap drivers first car insurance on getting very very cheap car insurance quotes , other types of policies can include the following: And here is a list of car insurance companies cheapest.

And the list concludes with a way to calculate car insurance estimate without personal information. While the content of this site is provided in good faith, we do not warrant that the information will be kept up to date, be true and not misleading, or that this site will always or ever be available for use. Nothing on this website should be taken to constitute professional advice or a formal recommendation and we exclude all representations and warranties relating to the content and use of this site.

Sales Force Management Tips Some owner-managers find it difficult to motivate and measure the performance of sales representatives because representatives vary, customers vary, and business conditions vary. As their discussion opens, the consultant is pointing out: Sales Force Measurement Problem C: Volume of sales in dollars. Amount of time spent in office.

Number of calls made on existing accounts. Number of new accounts opened. Completeness and accuracy of sales orders.