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8/2/2019 Evaluation of a Sales Man
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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
ua
li
t
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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