A Complete Sales Manager's Success Manual
This guide will walk you step by step through all the essential phases of managing your sales team. The book is packed with guides, worksheets and checklists that make it easy to apply all that knowledge.
Here's what’s in the book:
* How to Evaluate and Compensate Your Sales Team Performance
* Basics of Managing Salespeople
* How to Hire Salespeople
* How to Develop Salespeople Job Specifications
* How to Train Your Sales Team
* How to Motivate Your Team
* How to Effectively Supervise Your Sales Team
* How to Compensate Your Salespeople
* How to Use Independent Sales Agents Effectively
* All these and much much more.
One of your problems as an owner-manager is how to motivate and measure the performance of each of your sales force. Your task is complicated because of the many criteria that can be used.
This chapter presents a method that is workable and effective. It discusses the development of yardsticks that will allow a sales representative's performance to be measured in numbers that are profit-orientated.
Some owner-managers find it difficult to motivate and measure the performance of sales representatives because representatives vary, customers vary, and business conditions vary. This chapter is a conversation between a consultant who specializes in sales representative incentives (C) and an owner-manager (M). As their discussion opens, the consultant is pointing out:
C: Fortunately, your competitors face the same variables you face. But tell me, why do you want to measure the performance of your sales force?
M: I heard recently that industrial sales can average as much as $175 a visit. I don't want to spend that kind of money unless it's a good investment.
Sales Force Measurement Problem
C: Here's a list that I call "Sound Criteria for Measuring Performance"
Sound Criteria For Measuring Sales Force Performance?
Which of the following are sound criteria for measuring the performance of sales representatives?
1. Volume of sales in dollars.
2. Amount of time spent in office.
3. Personal appearance: for example, clothes, hair, cleanliness, and neatness.
4. Number of calls made on existing accounts.
5. Number of new accounts opened.
6. Completeness and accuracy of sales orders.
7. Promptness in submitting reports.
8. Dollars spent in entertaining customers.
9. Extent to which the sales representative sells the company.
10. Accuracy in quoting prices and deliveries to customers.
11. Knowledge of the business.
12. Planning and routing of calls.
M: From the question mark at the end of the title I gather that not all of the 12 are sound criteria?
C: Right. First let's look at some of the common errors that owner-managers make in measuring the performance of their sales representatives.
M: I'm willing to listen.
C: You probably aren't. Usually owner-managers make one of the five following errors: They evaluate their sales representatives primarily on the basis ofsales volume.They rely too much on thenumber of sales call made by each of their sales representatives. They compare each sales representative's present sales results withpast sales for a corresponding period - for instance, May of the current year against May of last year. They expect their sales representatives tofollow explicitly the selling methods that worked for them when they were selling. Or they give their sales representativestoo much freedom.
M: That's interesting, but not clear. What do you mean? Would you explain each point? For example, what's wrong with evaluating my sales force in term of their sales volume?
C: Usually, sales volume by itself won't tell you how much profit or loss you're making on each sales representative. Unless you know this fact, a sales representative can cost you money without your realizing it. For example, one small manufacturer was losing money until he analyzed the profitability of the sales volume brought in by each member of the sales force. He found that one of them created a loss on almost every order. This representative was concentrating on a market that had to become so competitive that markups had to be drastically reduced to make sales.
M: Assume that I have an adequate markup on my sales. Isn't performance then largely a matter of how many calls each of my sales representatives makes to get the business?
C: Of course making calls on customers and prospects is important, but a sales representative should make calls on accounts in relation to their sales and profit potential.
M: It sounds to me as though you're questioning if sales representatives should get in the habit of making regular call on their accounts.
C: If your sales force is more responsible for servicing their accounts than selling their accounts, than a regular routine of calls may be okay. But paying sales representatives to do routine pick-up and delivery, for example, can be expensive.
M: How about comparing a sales representative's current performance with the past?
C:That can be very misleading, Some months have more working days than others. Changes in products, prices, competition, and assignments make comparisons with the past unfair, sometimes to the sales representative, sometimes to you. It's much better to measure cumulative progress - quarterly, semi-annual, or annual results - toward goals.
M: Why not evaluate a sales representative's selling methods?
C: Youshouldif a sales representative violates company policy or doesn't accomplish goals. But why criticize a sales representative for spending too much time in the office if that brings in profitable orders by telephone or by mail?
M: I suppose owner-managers who've had sales experience themselves expect their sales representatives to use the same selling methods that worked for them - even if they don't realize it.
C: It's natural that they would. But it's often unfortunate. Market conditions change or the sales representative faces different problems. I know of one good sales representative who's basically an introvert - avoids socializing whenever possible. This rep's boss is an extrovert and can't understand this.
M: What about owner-managers without sales experience? Do they face any special problems in measuring the performance of their sales forces?
C: They surely do. They often give their sales representatives too much freedom. Their knowledge of selling is limited. Often they don't know what they should really expect from their sales representatives.
Yardsticks for sales Force Measurement
M: Okay, now I understand what you meant by the five errors which owner-managers make. But I'm confused about the so-called criteria in your Exhibit 1. Are any of them usable for measuring the performance of sales representatives?
C: Yes: Some of them are excellent. The trick is to use the yardsticks that can be expressed in numbers. The best one in Exhibit 1 are items 1, 4, 5, and 8.
M: I can see that item 1, "Volume in sales dollars," item 4, "Number of calls made on existing accounts," can be expressed in numbers.
C: Right. And also item 5, "Number of new accounts opened," and item 8, "Dollars spent in entertaining customers". All four of these items are especially good when they are accompanied with target dates such as month-end, quarter-end, or year-end.
M: This is beginning to look good to me.
C: Fine. But I believe there are better criteria than those we've been talking about.
M: I'd like to hear about them. But first, what about the other items shown in Exhibit 1?
C: The other itemscanaffect a sales representative's performance. That means you may have to make judgments in these areas. I would hope your judgment would be made after you give the most weight to the items that can be measured in numbers...
Planning, Measuring, and Correcting
... But there's more to sales force performance than merely compiling sales figures.
M: What else is there to do after performance has been measured?
C: Actually, the answer to that question is planning for better performance in the future and correcting past performance with which you are not satisfied. You do this by finding out what profit contribution each sales representative makes.
M: But what do you mean by profit contribution?
C: Oh. I'm about to get ahead of myself. First, let's look at this guide for planning, measuring and correcting a sales representative's performance.
Guide for Improving a Sales Force Representative's Performance
One goal of measuring a sales representative's performance is improvement assistance. The three steps in bringing about improvement when it's needed are: planning, measuring, and correcting.
Other books in this category that may interest you:
A Step by Step Guide to Marketing Research Strategies
A Step by Step Guide to Marketing Planning
A Step by Step Guide to Budgeting Your Marketing Activities
A Complete Sales Manager's Success Manual
A Step by Step Guide to New Customer Acquisition
Step by Step Guide to Understanding Your Customers
A Complete Guide to Small Business Advertising Techniques
Guide to Self Audit the Advertising and Promotion in a Small Business
Guide to Self Audit the Sales and Marketing in a Small Business
A Step by Step Guide
A Step by Step Guide to Retail Marketing Techniques
A Step by Step Guide to Working With an Independent Sales Representative
A Step by Step Guide to Consignment Selling in Your Small Business
A Step by Step Guide to Pricing in a Manufacturing Company (Pricing Strategies)
A Step by Step Guide to Pricing in a Retail Store (Pricing Strategies)
A Step by Step Guide to Pricing Your Services (Pricing Strategies)
A Step by Step Guide
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