Session 9 Evaluation and Automation
-
Upload
snehashish-chowdhary -
Category
Documents
-
view
225 -
download
0
description
Transcript of Session 9 Evaluation and Automation
-
1Evaluating the
Sales Force9
It is only through evaluation
that value exists: and without
evaluation the nut of existence
would be hollow.
Friedrich Nietzsche
-
Learning Objectives
Understand the importance of evaluation in sales
management
Study the Sales Force Evaluation Model
Distinguish between input and output measures of
sales performance
Discuss the value of behavioural control procedures
for salespeople
Understand outcome based evaluation procedures
Describe the evaluation models that use both input
and output data
-
Role of Evaluation in Sales
Management
Sales Force Evaluation
Adjust sales territories Determine training and
development needs of salesperson/s
Motivate salespeople and establish work expectations
Link compensation and rewards to performance
Identify individuals for promotion or
termination
Help salespeople set and work towards their
career goals
Establish recruiting criteria for
salespeople
-
Interrelationship of planning,
implementation, and evaluation
PlanningSet goals
Determine strategies
and tactics
Implementation
Organize
Staff
Operate
EvaluationCompare goals and
results
Explain variances
Fact finding is more important than Fault finding
oWhat happened?
oWhy did it happen?
oWhat can we do about it? 4
-
Comprehensive Performance
Appraisal Areas
Input Measures
Output Measures
ProfitabilityPersonal
Development
5
-
Output Measures Used in Sales
Force Evaluation
Sales Orders
Profits Accounts
-
Sales Volume Analysis
Sales Definition:Order booking
Shipment of goods
Receipt of payment
Source of InformationInvoices / Cash receipts
Sales persons call reports
Warranty cards
Store audits
7
-
Sales Analysis
8
Sale
s A
naly
sis
All levels
In Sales
Organisation
Different
Type of
Sales
Different
Type of
Analysis
National and/or international levels sales organisation
Regional level
Branch level
Territory level
Individual level
Total sales of the company
By type of products
By type of distribution channels
By type of customer classifications
By size of orders
Comparisons with sales quotas / targets
Comparisons with previous periods
Comparisons with industry / competitors
Comparisons within sales organisations
Comparisons with sales forecasts
-
Orders/Accounts
Number of Orders
Average Order Size
Number of new accounts
Number of accounts lost
Number of accounts sold
Number of accounts
buying full line
ORDERS ACCOUNTS
-
Productivity Analysis
Productivity is generally measured by ratio between
output & input
Sales = Days Worked x Call Rate x Batting
Average x Average OrderCall Rate = Calls per day worked
Batting Average = Orders/Call
Average Order = Sales amount per order
Companies also look at:Sales Volume per Call
o Revenue generated by rep/Number of calls made
Average Cost per Call
o Sales Expenses of rep/Number of calls made
-
Productivity Analysis
Productivity can be improved by companies by:Reducing sales force size
Hiring manufacturers reps. or agents on commission basis
Using the internet, telemarketing, direct mail to reach
customers
Increasing sales volume substantially
-
Profitability Analysis
Identify unprofitable product lines, territories,
and customer segments
Evaluate territory and product performance by
profitability
Calculate year-end sales team bonuses.
Sales Costs = Profit
-
Profit for Sales Force Evaluation
Net Profit
Gross Margin
Gross Margin Percentage
Return on Investment
Net profit as a percentage of sales
Margin by product category
13
-
Profitability Analysis
Close rate shows how well rep can close once she
has attempted to seal the deal by giving price
quotes
Profit per call can indicate if rep is offering too many discounts to customers
Close Rate =Number of Orders
Number of Quotations
Profit Per Call =Total Profit
Number of Calls Made
-
Input Measures Cost Analysis
Look at various major costs as a percentage of sales
Total
Salaries
Travel
Training
These could be seen across:
Territories
Products
Customer Classifications
Assists sales managers identify inefficient
functions/products and determine which customer
segments are most expensive to serve
-
Input Measures
Number of days worked
Sales calls per day, week, or
month
Sales calls per customer
Product demonstrations
conducted
Required reports completed
Number of prospecting
phone calls
Selling time vs. non-selling
time
Dealer meetings
Customer training
sessions conducted
Number of service calls
Number of customer
complaints
Advertising displays
Effort Other Activities
-
A Model of Salesperson Evaluation
Output Measures Sales revenues
Sales growth
Sales to quota
Sales to potential
New accounts
Contribution margins
Contribution percentage
Input Measures Calls
Reports
Complaints
Demonstrations
Dealer Meetings
Display set up
Travel/entertainment
expenses
-
Perspectives on Salesperson
Performance Evaluation
Output Measures Little monitoring of people
Little managerial direction of
salespeople
Straightforward objectives
measures of results
Use in competitive sales
environment
Input Measures Considerable monitoring of
salespeople
High levels of managerial
direction of salespeople
Subjective measures of
salesperson characteristics,
activities, and strategies
Used when non-selling
behaviours are a priority
For new recruits
-
Qualitative Performance Measures
Judgments made by supervisors about reps
performance or abilitiesJob knowledge
Problem-solving skills
Creativity
Attitude and morale
Internal and external relationships
Initiative and judgment
Ability to plan
Communications with management
Normally reviewed against an ideal rep
-
Relating the Performance of the Sales
Force to the Firms Salespeople
Possible reasons for a sales revenue shortfall
Sales force didnt work hard enough1
Firms pricing isnt competitive2
Products suffer from quality or delivery problems3
Reps lack sales ability or need additional training4
Look at changes in distribution set up5
-
Policies for Performance Evaluation
Normally annualFrequency
Immediate supervisor and review by branch head
Who conducts evaluation
Sales analysis, daily and monthly reports
Sources of Information
Should be conducted with each salesperson
Formal Review
21
-
Tools and Methods to Perform
Qualitative Measurements
ForceRanking
Each reps performance is ordered from highest to lowest within a district or region
Rating Scales
Uses phrases or terms as anchors that describe characteristics or performance
The EssayTechnique
Brief statement written by the sales mgr to describe reps overall performance level
Management by Objectives
Goal setting and evaluative process resulting in mutually agreed-upon performance measures
Behaviorally Anchored
Rating Scale
Set of scaled statements describing performance rep received in terms of various job behaviors
22
-
Salesperson
360-Degree Feedback System
Salesperson is
evaluated by
multiple raters
Helps salespeople
better understand
their ability to add
value to their
organization and
their customers
Sales Manager
Eva
lua
tion
-
5 Types of Evaluation Bias
CentralTendency Bias
Managers tendency to rate in the center of the scale
Leniency or Harshness Tendency
Occurs when rep is rated at the extremes
Halo Effect 1 or more evaluation categories influence the
overall assessment of the rep
InterpersonalBias
Occurs when performance ratings are influenced by how much manager likes or dislikes rep
OutcomeBias
Allowing results of an action to influence mgrs assessment (e.g., rep closes large important sale)
24
-
Reducing Sales Management Errors in
Performance Evaluations
Be familiar with each trait on evaluation form1
Dont allow one factor to influence others2
Base ratings on actual performance, not potential3
Dont overrate reps evaluate them objectively4
Rate rep on performance over entire period5
List sound reasons for all appraisal ratings6
25
-
26
Sales Force
Automation9
Technology overtaking the
human touch
-
Sales Force Automation
The streamlining of the sales cycles in the
business to cut cost of customer contact and
enhance customer experience.
It records every business opportunity from
prospecting to closure within the guiding
principles of:Build customer experience
Develop customer insight
Build CRM programmes
27
-
Use of Technology in Sales Management
Commonly used technologyCell phones
Global Positioning Systems
Laptop Computers
Personal Digital Assistants
E-mail for communication with
customers and head office and
prospecting
28
-
Benefits of SFA and CRM
Lowering of customer acquisition cost
Direct relationship with field force
Greater accountability of sales force
Real time management of marketing information
system
Enhancement of customer focus
Updating of databases to manage customer
interaction and improve sales forecasting
29
-
Objectives of CRM and SFA
Applications
To increase revenue
To enhance per customer profitability
To increase ROMI (return of marketing
investments)
To enhance winning sales approach
To increase sales executive productivity
To increase information flow for prudent decision
making
To promote sales executive retention and reduce
field force turnover
30
-
Linking Sales Process and Activity
31
Opportunity GenerationSales collateral preparation, despatch
and data capture
Sales collateral preparation, despatch
and data captureLead Allocation
Prospect ContactedSales manager moderation if the
contact not done in the desired period
Order PlacedGenerate contract and management
approval
Prospect Qualified
Product Solution Identified Finalise product solution and price
Schedule meeting if lead is firm
-
Areas of Automation in Sales
32
Lead tracking and conversion rates to gauge productivity of sales staff
Length of average sales cycle Size of order book How many sales calls lead to an order in a typical market
Lead Management
Basic customer data, their purchase process, sales progress on each call and scheduling of further calls
Scheduling of follow up calls Identification of customers who were part of recent
promotional programmes
Contact Management
-
Areas of Automation in Sales
33
Linking people, territories and quotas to help the sales manager in customer profiling, lead generation and order booking by territories
Sales Territory
Management
Conversion of tacit knowledge into explicit knowledge as an aid to sales people
Knowledge Management
-
Knowledge Management
Sales presentation slides
Corporate profile and policy handbooks
Business proposal templates
Industry and competitive data
Transcripts of sales meetings and executive briefings
Training modules
Previous customer correspondences
Contract documents
34
-
Sales Force Automation (SFA)
Systems
SFA also automates the
reporting system by
salespeople
There is an inherent
resistance to the use of
SFA by salespeople and
managers due to lack of
flexibility
-
Benefits of SFA
Helps mangers evaluate and coach reps Improves companys sales forecasts
Instant Access
Manual records are taken away by reps on moving away
Retention of Customer Information
Data available online for reps and managers
Improved Customer Interaction
For completion of tasksTicklers
36
-
Sales Tools and Uses of SFA/CRM
by Job Role
CEO
Sales forecast
VP of Sales
Sales forecast
Identify/share best practices
Track performance by salesperson, product, etc.
Capture win/loss data for strategic planning/pricing
Create or use models to understand segments
Sales
Management
Sales forecast
Identify big impact opportunities
Identify coaching & training opportunities by examining win/loss ratios by rep & stage of sales process
Monitor activities by account or by rep relative to results
Sales
Rep
Access to customer data
Access to pricing formulas & product info for better proposals
Integrated access to other relevant info (shipping, billing, etc.)
Faster access to leads
-
Next Session
38
Eureka Forbes Case