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    Session 9 Evaluation and Automation

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    Snehashish Chowdhary
    The document discusses evaluating sales force performance. It begins by outlining the importance and benefits of evaluation for sales management. This includes establishing goals, identifying high and low performers, and motivating salespeople. It then discusses different models for evaluation, distinguishing between input measures like effort and activities, and output measures like sales, profits, and new accounts. The document provides examples of specific metrics and tools used in evaluation, and outlines best practices like reducing bias. Finally, it discusses how technology can enhance evaluation through automation and tools like CRM.

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    Session 9 Evaluation and Automation

    Uploaded by

    Snehashish Chowdhary
    44 views38 pages
    The document discusses evaluating sales force performance. It begins by outlining the importance and benefits of evaluation for sales management. This includes establishing goals, identifying high and low performers, and motivating salespeople. It then discusses different models for evaluation, distinguishing between input measures like effort and activities, and output measures like sales, profits, and new accounts. The document provides examples of specific metrics and tools used in evaluation, and outlines best practices like reducing bias. Finally, it discusses how technology can enhance evaluation through automation and tools like CRM.

    Original Description:

    Sales Force evaluation and Automation benefits of CRM tools metrics and various techniques

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    The document discusses evaluating sales force performance. It begins by outlining the importance and benefits of evaluation for sales management. This includes establishing goals, identifying high and low performers, and motivating salespeople. It then discusses different models for evaluation, distinguishing between input measures like effort and activities, and output measures like sales, profits, and new accounts. The document provides examples of specific metrics and tools used in evaluation, and outlines best practices like reducing bias. Finally, it discusses how technology can enhance evaluation through automation and tools like CRM.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    44 views38 pages

    Session 9 Evaluation and Automation

    Uploaded by

    Snehashish Chowdhary
    The document discusses evaluating sales force performance. It begins by outlining the importance and benefits of evaluation for sales management. This includes establishing goals, identifying high and low performers, and motivating salespeople. It then discusses different models for evaluation, distinguishing between input measures like effort and activities, and output measures like sales, profits, and new accounts. The document provides examples of specific metrics and tools used in evaluation, and outlines best practices like reducing bias. Finally, it discusses how technology can enhance evaluation through automation and tools like CRM.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 38

    9

    Evaluating the
    Sales Force
    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
    Establish recruiting
    criteria for
    salespeople

    Help salespeople set


    and work towards their
    career goals

    Identify individuals
    for promotion or
    termination

    Adjust sales
    territories

    Sales Force
    Evaluation

    Determine training and


    development needs of
    salesperson/s

    Motivate
    salespeople and
    establish work
    expectations

    Link compensation
    and rewards to
    performance

    Interrelationship of planning,
    implementation, and evaluation
    Planning
    Set goals
    Determine strategies
    and tactics

    Evaluation
    Compare goals and
    results
    Explain variances

    Implementation
    Organize

    Staff
    Operate

    Fact finding is more important than Fault finding

    oWhat happened?
    oWhy did it happen?
    oWhat can we do about it?

    Comprehensive Performance
    Appraisal Areas

    Input
    Measures

    Output
    Measures

    Profitability

    Personal
    Development

    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 Information
    Invoices / Cash receipts
    Sales persons call reports
    Warranty cards
    Store audits

    Sales Analysis
    National and/or international levels sales organisation

    Sales Analysis

    All levels
    In Sales
    Organisation

    Regional level
    Branch level
    Territory level
    Individual level

    Different
    Type of
    Sales

    Total sales of the company


    By type of products

    By type of distribution channels


    By type of customer classifications
    By size of orders

    Different
    Type of
    Analysis

    Comparisons with sales quotas / targets


    Comparisons with previous periods
    Comparisons with industry / competitors
    Comparisons within sales organisations

    Comparisons with sales forecasts


    8

    Orders/Accounts
    ORDERS

    Number of Orders
    Average Order Size

    ACCOUNTS

    Number of new accounts


    Number of accounts lost
    Number of accounts sold
    Number of accounts
    buying full line

    Productivity Analysis
    Productivity is generally measured by ratio between
    output & input
    Sales = Days Worked x Call Rate x Batting
    Average x Average Order
    Call 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

    Sales Costs = Profit


    Identify unprofitable product lines, territories,
    and customer segments
    Evaluate territory and product performance by
    profitability
    Calculate year-end sales team bonuses.

    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
    Close Rate

    Number of Orders
    Number of Quotations

    Profit per call can indicate if rep is offering too


    many discounts to customers
    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
    Effort
    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

    Other Activities

    Dealer meetings
    Customer training
    sessions conducted
    Number of service calls
    Number of customer
    complaints
    Advertising displays

    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 abilities
    Job 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
    1 Sales force didnt work hard enough
    2 Firms pricing isnt competitive
    3 Products suffer from quality or delivery problems
    4 Reps lack sales ability or need additional training

    5 Look at changes in distribution set up

    Policies for Performance Evaluation


    Frequency

    Normally annual

    Who conducts Immediate supervisor and


    review by branch head
    evaluation
    Sources of
    Information
    Formal
    Review

    Sales analysis, daily and


    monthly reports
    Should be conducted with each
    salesperson
    21

    Tools and Methods to Perform


    Qualitative Measurements
    The Essay
    Technique

    Brief statement written by the sales mgr to describe


    reps overall performance level

    Rating
    Scales

    Uses phrases or terms as anchors that describe


    characteristics or performance

    Force
    Ranking

    Each reps performance is ordered from highest to


    lowest within a district or region

    Management
    by Objectives

    Behaviorally
    Anchored
    Rating Scale

    Goal setting and evaluative process resulting in


    mutually agreed-upon performance measures
    Set of scaled statements describing performance
    rep received in terms of various job behaviors
    22

    360-Degree Feedback System

    Helps salespeople
    better understand
    their ability to add
    value to their
    organization and
    their customers

    Sales Manager

    Evaluation

    Salesperson is
    evaluated by
    multiple raters

    Salesperson

    5 Types of Evaluation Bias


    Halo Effect

    1 or more evaluation categories influence the


    overall assessment of the rep

    Leniency or
    Harshness
    Tendency

    Occurs when rep is rated at the extremes

    Central
    Tendency Bias
    Interpersonal
    Bias

    Outcome
    Bias

    Managers tendency to rate in the center of


    the scale
    Occurs when performance ratings are influenced by
    how much manager likes or dislikes rep
    Allowing results of an action to influence mgrs
    assessment (e.g., rep closes large important sale)
    24

    Reducing Sales Management Errors in


    Performance Evaluations
    1 Be familiar with each trait on evaluation form
    2 Dont allow one factor to influence others
    3 Base ratings on actual performance, not potential
    4 Dont overrate reps evaluate them objectively
    5 Rate rep on performance over entire period

    6 List sound reasons for all appraisal ratings


    25

    Sales Force
    Automation
    Technology overtaking the
    human touch

    26

    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 technology
    Cell 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


    Opportunity Generation

    Sales collateral preparation, despatch


    and data capture

    Lead Allocation

    Sales collateral preparation, despatch


    and data capture

    Prospect Contacted

    Sales manager moderation if the


    contact not done in the desired period

    Prospect Qualified

    Schedule meeting if lead is firm

    Product Solution Identified

    Finalise product solution and price

    Order Placed

    Generate contract and management


    approval
    31

    Areas of Automation in Sales

    Lead
    Management

    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

    Contact
    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

    32

    Areas of Automation in Sales


    Sales
    Territory
    Management

    Linking people, territories and


    quotas to help the sales manager in
    customer profiling, lead generation
    and order booking by territories

    Knowledge
    Management

    Conversion of tacit knowledge into


    explicit knowledge as an aid to sales
    people

    33

    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
    Instant Access

    Helps mangers evaluate and coach reps


    Improves companys sales forecasts

    Retention of
    Manual records are taken away by reps
    on moving away
    Customer Information
    Improved Customer
    Interaction

    Ticklers

    Data available online for reps and


    managers

    For completion of tasks

    36

    Sales Tools and Uses of SFA/CRM


    by Job Role
    CEO
    Sales forecast

    VP of Sales

    Sales
    Management

    Sales forecast

    Sales forecast

    Identify/share
    best practices

    Identify big
    impact
    opportunities

    Track
    performance
    by salesperson,
    product, etc.
    Capture win/loss
    data for strategic
    planning/pricing

    Identify coaching
    & training
    opportunities by
    examining
    win/loss ratios by
    rep & stage of
    sales process

    Create or use
    models to
    understand
    segments

    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

    Eureka Forbes Case

    38

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