Evaluation & Control Evaluation & Control of Sales Personnelof Sales Personnel

ControlControl

Four Main Steps:– Establishing Performance Standards – Recording Performances – Evaluating Performances against

Standards – Taking Action

1. Setting Performance Standards 1. Setting Performance Standards

Quantitative Performance Standards:

a) Quotas:• Quantitative objective expressed in absolute terms • The terms can be Value or product units or combin.• Quotas specify desired levels of accomplishment

for sales volume, gross margin, net profit, performance of non selling activities

• Realistic & Attainable

Quantitative Performance Quantitative Performance StandardsStandards

b) Selling Expense Ratio: Control the relation of selling expenses to sales

volume Determined after analysis of expense conditions &

sales volumes potential in each territory Can be affected by controlling expenses or improving

sales Does not take into account variations in the

profitability of different products More popular in industrial selling where greater

emphasis is put on Personal selling & entertainment of customers

Quantitative Performance Quantitative Performance StandardsStandards

c) Territorial Net Profit or Gross Margin Ratio:Needs for selling a balanced line & for

considering relative profitability (Different Products or Individual Customers)

Emphasis on more profitable products & devote more time & effort to potential accounts

Neglect the solicitation of new accounts or performance f new products

Quantitative Performance Quantitative Performance StandardsStandards

d) Territorial Market Share:Market share on a Territory-by-Territory basis Target Market share percentages are set for each

territory Comparison are made on basis of Industry sales e) Sales Coverage Frequency Index:Thoroughness with which a sales person works in

the assigned Territory Consists of the ratio of the number of customers

to total prospects in a territory

Quantitative Performance Quantitative Performance StandardsStandards

f) Call Frequency Ratio: Dividing the number of sales calls on a particular class

of customers by number of customers in that class Directs the selling effort to more profitable accounts

g) Calls per day: Standards for calls are set up individually for different

territories, taking into account territorial differences as to customer density, road & traffic conditions and competitor's practices

Quantitative Performance Quantitative Performance StandardsStandards

h) Order Call Ratio: Effectiveness of sales person in securing

orders Dividing number of orders secured by number

of calls made I) Average Order Size: Controls the frequency of calls on different

accounts Different standards for different sizes &

classes of customers

Quantitative Performance Quantitative Performance StandardsStandards

j) Non Selling Activities:Standards for non selling activities such as

obtaining dealer displays, cooperative advertising contracts, training distributor’s personnel, and goodwill calls on distributor’s customers

Qualitative Performance CriteriaQualitative Performance Criteria

a) Job Factors: Product Knowledge Awareness of customer needs Relationship with customers Service Follow Upb) Personal Factors: Punctuality General Attitude Dress & Appearance Cooperation Adaptability

2. Recording the Actual 2. Recording the Actual Performance Performance

Field Sales Reports – To provide data for evaluating performance – To help the sales person plan the work – To record customer’s suggestions & complaints – To gather information on competitor’s activities – To report changes in local & business conditions – To keep mailing list updated for promotional &

catalogue materials – To provide information requested by marketing

research

2. Recording the Actual 2. Recording the Actual PerformancePerformance

Types of Sales Force Reports:– Progress or Calls reports – Expense report – Sales work plan – New business report – Lost Sales Report – Report for Complaint & Adjustment

Number of Reports Design & Construction of Reports Detail Required in the Sales Reports

3.Evaluation - Comparison against 3.Evaluation - Comparison against actualactual

Issues Involved:

– Differences in Individual Territories – Sales Potentials – Impact of Competition – Personalities of Sales Personnel & their

Customers– Comparison of Both qualitative &

quantitative data

4. Taking Action 4. Taking Action No Deviations/Low Significance deviations:

– No Action Required Highly significant Deviations:

– Adjust Performance to Standards – Revise the policy or plan or strategies – Lower or raise the objectives or standards

Supervision Supervision Conditions:

– High turnover rate of sales person – High turnover of accounts – Increased complaints from customers – Consistent low ratio of orders to sales calls – Total number of calls very high or very low – Increasing ratio of selling expenses

Who Should Supervise Qualifications of Supervisors