Evaluation & Development of Sales Personnel- Session 8

Sanjeev Varshney

Issues in Sales Force Evaluation

Absence of system Biaseness on the part of evaluator Quantitative vs Qualitative system

Process of Sales Force Evaluation

Set targets for the sales force Establish the evaluation criteria Establish evaluation process Conduct evaluation Feedback Carry development process

Set Targets for the sales force

Can be set on

Sales volume Expense Profit margin Activity Customer satisfaction and combination

Match with the sales budgets Break it down into salespersons, distributors, dealers, product wise etc

Method of Setting Sales Quotas

Territory Potential Past sales experience Total market estimates Executive judgment Sales people estimates

Issues with regard to quota settings

Set realistic quotas Overestimation or underestimation New product launches Large customer base large geographic area Varied range of customers Lack of quota communication to the sales people Absence of sales man participation Absence of co-ordination between quota and marketing environment

Framework for Identifying the Evaluation Criteria

Market Condition (Product Life Cycle) Introductory Search attributes (eg: non durables) Displays organised Experience attributes (eg: durables) Demonstration Credence attributes (eg: Services) Trials, and number of calls

Growth Phase (Low competition) Maturity phase (high competition)

New retail outlets New service opened and Sales outlets

Number of calls

Market share

Sales

Customer base

Criteria for Performance Evaluation

Behaviour-based perspective Behavioral Outcome-based perspective Results

Sales person performance Professional development

Profitability

Question is what to use when ? Or else what kind of mix we should have ?

Some of the Common Evaluation Criteria

Quantitative Sales volume Debtors control Territory development

New outlets Length and breadth of goods in each outlet

Promotion/ Publicity Market Feedback

Qualitative Adherence to company norms, reporting etc. Relationship with dealers Innovativeness, sincerity and diligence

Common Ratios used to evaluate sales people

Expense ratio Account development and servicing ratio Call activity or productivity
Sales = Days worked X Calls X -------------Days worked Orders X --------------Calls Sales ------------Orders

Sales = Days worked X Call rate X Batting average X Average order size Common Output Indicators Used in Indian Industry Target achieved Total coverage Effective coverage Range sold Credit control Average order size

Ways and Means of Evaluating the Sales Force

Evaluation based on targets Appraisal by the superior (qual+ quan) MBO 360degree appraisal

Model of Sales Force Evaluation

Sales person satisfaction Salesperson Motivation Sales person skill/ aptitude Task difficulty -economic condition Unexpected Events Input Variables Stage I Stage II Stage III Perceived Performance Outcome Sales Behaviour

Expected performance Performance Evaluation Reward allocation

Outcome of Sales Force Evaluation

Review the performance Provide feedback Redefine targets Redefine the sales territories Reassign sales people to sales territories Redefine the evaluation criteria Determine the development /career advancement process

Sales Personnel Development

Gaps identified in terms of performance forms the basis for developmental program This can be identified by the supervisor/ or by HR department through general HR audit Provide feedback to the sales person Carry out the development exercise

Development centre Training etc.

Assignment 2

To launch Safe and soft mosquito repellant cream (Jyothy Laboratories) what will be your sales force objective, strategy and tactics? For details visit http://www.thehindu.com/health/medicineand-research/article1454879.ece Prepare a sales forecast for launching Safe and soft in the market. Prepare a sales territory plan and assign quotas at regional level. What will be the evaluation criteria for sales staff (Company executives and distributor ) Suggest an Incentive plan to motivate the sales force What other decisions you will like to take?
1. Take assumptions wherever needed but be realistic 2. More focus on process than on correctness of data 3. The total no of slides should not exceed 6 (excluding cover slide and thank you slide) 4. Any kind of copying or plagiarism will be evaluated negatively