Evaluating a Salespersons Performance

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Chapter
16
Evaluating a Salespersons Performance
Why should our endeavor be so loved, and the
performance so loathed? William Shakespeare
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Agenda

• Quiz
• Chapter 16 Evaluating a Salespersons
  Performance
• Case 16-2 Seal-Rite Envelope Company (C)
• Participation
• Next Class

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What is a salesperson performance evaluation?

• One Definition
• A part of the marketing audit that involves
  appraising sales person performance to identify
  strengths and weaknesses in order to improve
  performance.
• Purpose
• To develop
• To direct
• To reward
• To correct
• To understand

Have you ever had a performance evaluation?
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How can a sales manager determine accuracy of
salespeople's reports?

• Some ways
• Company reports over time, against any territory,
  company norms, quotas, or budgeted figures
• In case of major discrepancies found in (a) the
  manager can discuss the situation with the sales
  rep and determine the degree of reporting
  accuracy.
• The sales manager probably has traveled the
  territory enough and is acquainted with
  conditions sufficiently so as to have a good idea
  as to the accuracy of the information being
  reported by a sales rep.
• Voluntary, unsolicited feedback and remarks by
  customers often support or negate the information
  reported by sales reps. It is ordinarily not a
  good idea for the sales executives to contact a
  customer directly, asking him to verify a sales
  rep's report. This would undermine the sales
  rep's morale and undermine the customer's
  confidence in that sales rep.

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Difficulties in Evaluating Performance

• Many duties cannot be evaluated objectively
• Some duties are even difficult to measure on
  subjective level
• Wide variety of conditions under which sales
  people work
• Degree of field supervision
• Results of salespersons efforts may not be
  evident for some time
• Team selling

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Procedure for Evaluating Salespeople(Fig. 16-1)
1. Establish basic policies
2. Select evaluation bases
3. Set performance standards
4. Compare performance with standards
5. Discuss results with salespeople
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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 (i.e., market share)
• Gross margin by product line, customer group, and
  order size
• Orders
• Number of orders
• Average size (dollar volume) of order
• Batting average (orders / calls)
• Number of canceled orders
• Accounts
• Percentage of accounts sold
• Number of new accounts
• Number of lost accounts
• Number of accounts with overdue payment

Results Quantitative Minimize subjectivity and
bias Easy to measure
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Input Factors for Salesperson Evaluation

• Focus on salesperson behavior over which he/she
  can exercise control
• Qualitative
• Quantitative

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Quantitative Input Factors Used as Evaluation
Bases

• Calls per day (call rate)
• Days worked
• Selling time versus nonselling time
• Direct selling expense
• In total
• As percentage of sales volume
• As percentage of quota
• Nonselling activities
• Advertising displays set up
• E-mails/letters written to prospects
• Telephone calls made to prospects
• Number of meetings held with dealers and/or
  distributors
• Collections made
• Number of customer complaints received

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Qualitative Input Factors Used as Evaluation Bases

• Personal efforts of the sales reps
• Management of their time
• Planning and preparation for calls
• Quality of sales presentations
• Ability to handle objections and to close sales
• Knowledge
• Product
• Company and company policies
• Competitors products and strategies
• Customers
• Customer relations
• Personal appearance and health
• Personality and attitudinal factors
• Cooperativeness
• Resourcefulness
• Acceptance of responsibility
• Ability to analyze logically and make decisions

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How should a manager decide what weights to place
on the quantitative versus the qualitative
factors in an evaluation?

• Depends on the nature of the sales job
• Close attention should be paid to the job
  description
• Factors which best measure the performance of the
  desired sales activities and behaviours should be
  used regardless of whether they are quantitative
  or qualitative.
• A key to a successful evaluation program is to
  appraise a sales rep's performance on as many
  different bases as possible recognizing the
  limitations of each.

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BARS
Behaviourally Anchored Rating Scale
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Should Managers Give Laggards the Boot?

• General Electric (Page 455)
• SFM identify the top 20 of SF
• And, bottom 10 of SF
• Top 20 ? Significant Bonuses
• Bottom 10 ? Typically Fired
• Read handout, Should Managers Give Laggards the
  Boot?

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How can a sales manager determine the differences
the reps encounter in the severity of competition
in each territory?

• Company's share of market in each territory.
• Number of competitive firms.
• Number of competitive salespeople.
• Quality of caliber of competitors' sales force.
• Length of tenure of competitive reps v. companys
  reps.

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What are some of the indices a sales manager can
use to evaluate the degree to which each
salesperson is covering the assigned territory?

• Obtain some statistics on the total number of
  potential customers in the rep's territory and
  then compare it with the rep's number of
  customers. Then compare to other territories or
  salesperson/territory goals and quotas.
• Actually plot out on a map the calls made by the
  salesperson to see if she/he is adequately
  covering all towns and trading centers in the
  area.

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CASE 16-2 SEAL RITE ENVELOPE COMPANY (C) --
Evaluation of Telemarketing Reps
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Key Issue

• How to best evaluate new telephone sales reps at
  Seal Rite

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On what basis should the telemarketers be
evaluated? How often? Against field sales reps
or each other?

• Basis?
• No easy answer approach is new to both the firm
  and Rose, therefore, flexibility is key.
• Decision Criteria
• Rose wants to ensure that she gets useful
  information without micromanaging or losing
  perspective of her mission.
• Solution needs to be beneficial for Seal Rite ?
  increase company sales
• Solution needs to be beneficial for Seal Rites
  new reps ? job security, development
• Solution needs to be beneficial for customers ?
  provide adequate service and retain
• Will need a variety of output and input
  statistics
• How Often?
• Frequently at first (daily or weekly call sheets)
• Against Field reps?
• No. They should be evaluated on the basis of
  criteria which have been decided specifically for
  them.

Telemarketing consultant can help determine
guidelines.
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Should the calls be recorded?

• Yes
• Better understanding of what works (KSFs emerge
  quickly)
• Determine which reps have affinity for phone work
• Help design improved training programs

• No
• Need to ensure it doesn't violate laws may be
  costly and restrictive
• Customers may not want their conversations
  recorded
• Telemarketers may not like being recorded

http//www.privcom.gc.ca/fs-fi/02_05_d_14_e.asp
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Next Class

• Participation Input Sheet Return Sheet or Email
  to me by April 3rd.
• Presentations March 29th, April 3rd, and April
  5th
• Make sure you attend at least 2 of the 3
  Presentation classes
• There will be a question on the Final Exam!