Evaluation of a Sales Man

8/2/2019 Evaluation of a Sales Man

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Evaluation of sales person is the assessment of

his overall performance, which should match

with the objectives and the results produced.

To determine the best ways to improve

performance and revenue.

Objectives

financial(such as sales revenue, profits and

expenses)

market oriented (market share)

customer based(service and satisfaction levels)


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An effective salesperson performance

management system:

informs your sales force of the way you wantthem to sell.

provides sales management with a framework

from which to manage.

Enables measurement and continuous

improvement of the sales forces performance.


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THE EVALUATION PROCESS

objectives

Sales Strategy

Set performancestandards

Measure results andcompare with standards

Actions taken toimprove


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WHY EVALUATION PROCESS?


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SETTING STANDARDS

For the sales team as a whole the sales budgetwill be the standard against which actualperformance is evaluated.

This measure is used to evaluate salesmanagement and as well as sales people.

Standards provide a method of fairly assessingand comparing levels of sales achieved.but simply

comaparing individual sales is unlikely fair sincethe territories often have differing levels of salespotential.


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Psychologist fritz Heider proposed formulae

ability=task difficulty/effort

Performance=(ability*effort)+/- task difficulty


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QUALITATIVE MEASURES

Sales skills

Handling the opening and developing of rapport. Identification of customer needs.

Quality of sales presentation.

Use of visual aids.

Ability to overcome objections.

Ability to close the sale.

MEASURES OF PERFORMANCE


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Customer relationship

How well received is the sales person?

Are customers well satisfied with service, advice etc. Are there any complaints?

Self- organization(how well does the sales person

carry out the following?)

Prepare calls.

Organize routine.

Keep customer record up to date. Provide market information to headquarters.

Conduct self-analysis.


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Product knowledge

How well informed is the sales person about

his products. Customer benefits.

Competitive products and their benefits.

Their relative strengths and weaknesses.

Co-operation and attitude Respond to objectives determined by the management

Co-operate with suggestions during field training

What is his attitude towards the company and its

product


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QUANTITATIVE MEASURES

1. Specific output measures for individual salespeople are- Sales revenue archive

Profits generated

Percentage gross profit margin achieved

Sales per potential account

Sales per active account Sales revenue as a percentage of sales potential

Number of orders

Sales to new customers

Number of new customers

2. Measures related to input: Number of calls made

Calls per active account

Number of quotations

Calls per potential account

Number of calls on prospects


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HYBRID RATIOS

Strike rate= No. of order/No. of quotation

Sales revenue per call ratio

Profit per call ratio(call effectiveness)

Order per call ratio

Average order value= Sales revenue/No. of order

Prospecting success ratio

=No. of new customers/No. of prospects visited

Average profit contribution per order

= Profit generated/No. of orders


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Reasons of not achieving sales quota by sales person- Sales person is lazy-not making enough call.

Sales per call is low, indicating the lack of sales skill.

Sales person called too many established account

rather than new account.

Low strike rate- suggest the need for an analysis ofwhy orders are not fallowing quotations.

Poor call effectiveness- suggest a close examination ofsales technique to identify specific area of weakness sothat training can be applied more effectively.

CLUES GIVEN BY RATIOS


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Remuneration given to salesperson-

Expenses/sales revenue generated

Expenses/profit generated

Expenses per call

Expenses per square mile of territoryWith respect to expenses, comparison will be

made between sales people and between

current year and last year.


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Praise

Reward

Promote

Limited praise

Guide

Train

Limited praiseAdvise

Educate

DiscussTrain

Punish

Remove

Quantitatively measured units

Good Bad

Good

Bad

Q

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a

ti

ve

SALES PERSON EVALUATION MATRIX


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PROBLEMS WITH QUALITATIVE

PERFORMANCE APPRAISALS1.Lack Of An Outcome Focus

2.Halo Effect

3.Leniency (or) Harshness

4.Central Tendency

5.Interpersonal Bias


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BARS(BEHAVIORALLYANCHORED RATING SCALE)

This method is used to describe a performancerating that focuses on specific behaviors or setsas indicators of effective or ineffectiveperformance.

It is a combination of the rating scale and criticalincident techniques of employee performanceevaluation.

Critical Incidents are Occurrences that are Vital toPerformance


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360-DEGREE FEEDBACK IN

PERFORMANCE EVALUATION


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Evaluation of a Sales Man

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