How to evaluate sales management performance ?

One of the most important responsibilities of sales managers is to evaluate the performance of the sales personnel. The performance appraisal period can become one of those times that a salesperson dreads, unless the appraisal is effectively conducted. Ineffective performance appraisal tends to become a time-consuming and unpleasant activity for the sales manager as well as the sales personnel.The factors affecting sales peoples' performance are many. Some of these are beyond the control of the individual, while some can be modified. Aspects like motivation, skill-set, job satisfaction, role perception, personal factors like age, sex, height, etc; the ego drive, and empathy towards the customers are inherent in the individual salesperson. Environmental and organizational factors, along with the different functions of sales management come under external factors. It is difficult for the sales manager to predict the influence of the external factors on the performance of the sales force. To measure performance, it is necessary for the sales manager to put in place a performance evaluation procedure.

A proper evaluation process ensures that the organization is well managed. It also provides the sales personnel with information on their performance and gives recommendations for further improvement.Performance evaluation can also help in improving the relationships between the sales force and superiors by minimizing suspicion and improving interaction. The performance evaluation process generally involves five steps. The first step is to determine the factors that affect the performance of the sales force. The next step involves the selection of criteria that will be used to evaluate the performance. Step three involves establishing performance standards that can be used as a basis to compare the performance of the sales force. Step four involves monitoring actual performance. The last step is to review and provide feedback to the sales personnel. The purpose of conducting performance evaluation is to crosscheck whether the sales force activities are in alignment with organizational objectives. It also helps monitor the sales force activities and provide remedial action, if required. Performance evaluation also helps to prepare a future action plan for the sales personnel and fulfill the organizational objectives. It exerts an influence on the mode of compensation, fixing of sales quotas, and decisions on the transfer or removal of the salesperson from the organization. In most organizations, it is the immediate superior or the sales manager who conducts the performance appraisal. Sometimes a team of people including the personnel manager and the department head, along with the sales manager, appraise the sales personnel. The timing of appraisal also varies for different organizations. It depends on the complexity of the sales plan, the costs involved, and the current objectives of the organization. Periodic performance appraisal is necessary to identify any discrepancies in the overall sales plan and correct them.The sales manager or the concerned person involved in appraising the sales force can take the help of quantitative or qualitative criteria. These are also termed the behavior and outcome components. Qualitative criteria include sales skills, territory management skills, personality traits, etc. The quantitative factors include the sales volume, average calls per day, sales orders, etc. Quantitative criteria are those aspects that measure the sales performance in terms of the end results whereas qualitative criteria involve all those activities that the sale person does to achieve the end results. The sales manager must ensure that the performance standards are set to compare and evaluate the actual performance of the sales force. The standards vary from industry to industry and are different for different job profiles. Performance standards come under quantitative standards, qualitative standards, time-based standards, or cost-based standards. All the sales force activities can be segregated into one of these four categories and compared with the base standard. Many methods of performance evaluation have been developed over the years. Yet, there is no single method that can be considered ideal for all organizations. Some of the commonly used methods are essays, rating scales, rankings, management by objectives and behaviorally-anchored rating scales. Several modern methods like critical incident appraisal, work-standards method, family of measures, etc., have been developed to suit variations and other requirements. Finally, regular monitoring and review of the sales force activities is also necessary to ensure that the organizational activities are aligned to the sales plan.

You have to check for2 basic things. One is the output and the other is process/practice followed to achieve that output. There are ways and means of doing the same.

Every Sales team has KPIs attached to their performance. A thorough study of their achievements across these KPIs against the projections will give a fair idea of output. Again to reach to this level of output what were the reports that were followed or the key processes that were followed remains open for discussion as those only give the answers regarding shortcomings enabling us to identify the right processes to be followed, wrong processes to be dropped and initiatives to be taken.

teamwork, and helps your team get better overall.

Here is a list of these sales management performance factors: QUANTITY OF SALES —Sales volume versus sales buget/target —Personal sales output —Personal initiative —Ability to stay with difficult tasks —Ability to meet deadlines —Capacity to identify and solve problems QUALITY OF SALES —Average price and margin of sales —Sales group adherence to expense budgets —Personal adherence to expense budget —Number and resolution of customer complaints —Sales team’s handling of paperwork —Personal handling of paperwork —Sales mix versus sales plan and response to changes in output realities INTERPERSONAL RELATIONS —Relationship with subordinates, peers, and superiors —Relationship with customers —Ability to team build —Overall ability to cooperate INNOVATION AND MARKET KNOWLEDGE —Personal knowledge of markets —Knowledge of markets by subordinates —Number, quality, and cost effectiveness of ideas, proposals, and programs to improve sales volume, pricing, and overall sales operations —Personal knowledge of the competition —Knowledge of competition by subordinates LEADERSHIP AND MANAGERIAL SKILL —Ability to motivate —Personal appearance — self and subordinates —Goal setting skills —Time management skills —Personal communications skills —Communication skills of subordinates —Personal price negotiating skills —Price negotiating skills of subordinates —Ability to analyze and act on trends in the market —Ability to analyze and act on trend in sales performance data —Decision making skills —Overall managerial judgment —Recruiting and hiring skills —Ability to train and coach subordinates —Timely and accurate completion of itineraries and call reports —Compliance with sales policy and company policy in general Some of the factors that monthly sales call reports should include are: —Sales calls by type of account (Distributor, contractor, national account, dealer, qualified phone, other, etc. —Work days in month —Days in Office —Holidays —Vacation days —Sick days —Sales management meeting days —Outside call days —Total call days worked (Outside + In Office) —Average call per day (Calls/Days worked)

Being a sales professional is often very stressful, as there are high demands to meet sales quotas. After all, if salespeople don’t make their numbers, it not only impacts their goals, but the financial needs of the companies. Because of this, there is tremendous pressure placed on hitting their sales. But even though sales numbers are hugely important, they’re not the only way to evaluate the success of your sales team. If you’re trying to identify which salespeople on your team are the top performers and which ones might need to make a career change, it’s important to know how to look beyond the immediate numbers and develop a more nuanced way to evaluate sales reps’ performance. Final sales numbers are often the most attention-getting stats for sales managers, but there are a lot of other elements that go into creating those final numbers. Here are5 ways you can evaluate sales reps more fairly and effectively and look at the whole picture of what they bring to your team:1. Measure process, not just final results It might sound counterintuitive in such a results-driven business, but more sales teams need to focus on the overall sales process, and not just the final results. You need to have a “sales funnel” in place that guides your prospective customers through each stage of the buyer’s decision-making along the entire customer journey, including these touchpoints: The first contact or initial inbound inquiry The earliest discussion to assess the customer’s needs More detailed relationship-building conversations and discussions about the potential ROI of the customer buying your solution The final sales closing You should evaluate your reps not only on how well they close deals, but on how well they work through each stage of the sales process. You might discover that some of your best closers struggle with the early stages of making a sale, and that some of your salespeople with lower conversion rates in the final stages are great at qualifying sales leads initially. Measuring the overall performance of your reps throughout the sales process will help you identify people’s individual strengths and help your sales team get better as a whole. Unfortunately, many sales teams currently do not have a consistent sales process in place–according to stats cited by HubSpot,68% of B2B organizations have not identified their sales funnel. Do a Better Job with SurveyMonkey Enterprise Get the answers your organization needs to make even smarter decisions. Access our most powerful tools with SurveyMonkey Enterprise and integrate with the Salesforce workflow tool.2. Promote good prospectors Most salespeople hate prospecting. They hate making cold calls, and they hate making those first uncertain steps on the road toward finally closing a sale. This reluctance means that there is an opportunity to find the salespeople who actually enjoy prospecting and who are good at it, and make prospecting a niche role within your sales team. Perhaps you’ve got salespeople who struggle with closing sales or building longer-term relationships, but who have the right energy level and relentless ability to keep getting on the phone and introducing themselves to new prospects. Find a way to reward your salespeople who do the parts of the job that most salespeople don’t want to do.3. Reward training Many sales managers believe in the80-20 rule—the idea that80% of your sales results come from the top20% of your sales reps. If this80-20 rule is true for your organization, it can be tempting to just let your top sales reps keep doing their own thing and keep selling and selling—but this can be a mistake. Instead of evaluating your top sales reps based only on their sales numbers, try to capitalize further on their success by asking them to create best practices and training opportunities that can be shared with the rest of the team. The best players in sports don’t just rack up great statistics for themselves; they find a way to make other people on the team get better. It’s the same for sales. Enlist the support of your best salespeople in training the rest of the team. Find out what they do so well, and replicate that success—and make sure your top sales people understand that training is part of their job performance evaluation.4. Recognize teamwork Is your sales team truly a “team” or just an assortment of individuals? Good sales teams should have a spirit of friendly competition, but everyone needs to understand that the real competition is outside the organization. They’re ultimately not competing against each other—they’re helping each other compete against your company’s competitors. Look for ways to reward sales reps that exhibit and promote good teamwork, whether that means filling in for someone on a client meeting, or helping a teammate close a big deal. SurveyMonkey for Salesforce Get a complete understanding of your customer experience by integrating the world’s leading survey platform with your CRM.5. Think about the next deal We talk a lot about building relationships with potential customers, but what does it really mean? Making a sale is huge, but what about when it comes time to renew or upgrade? And are your customers likely to refer you to someone else? Another important part of the sale is how your customer feels about it afterward. Aggressive salespeople who will do anything to close the deal can be a huge asset to your team, but if they over promise or disappear after the sale, it can leave customers unsatisfied. Tracking and monitoring your progress by repeating customer satisfaction ratings six or12 months after the sale can be another great way to tell whether your team is building successful long-term relationships—or just padding short term numbers. Evaluating sales reps is about more than numbers, and it’s not always an exact science. Try to build a sales evaluation program that will promote the right characteristics and values that you want as part of your sales team. So you evaluate and reward your sales reps in a way that plays to people’s unique strengths, addresses any gaps in productivity, cultivates a sense of teamwork, and helps your team get better overall.

Owner-managers have the problem of motivating and measuring the performance of each of their sales force. Their tasks are complicated because of the many criteria that can be used.

This Sales Force Management Tips Guide 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.

Sales Force Management Tips

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 Guide 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 the12 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.

 by Sales reports.

 

The sales reporting includes the key performance indicators of the sales force.

 

The Key Performance Indicators indicate whether or not the sales process is being operated effectively and achieves the results as set forth in sales planning. It should enable the sales managers to take timely corrective action deviate from projected values. It also allows senior management to evaluate the sales manager.

 

More "results related" than "process related" are information regarding the sales funnel and the hit rate.

 

Sales reporting can provide metrics for sales management compensation. Rewarding the best managers without accurate and reliable sales reports is not objective.

 

Also, sales reports are made for internal use for top management. If other divisions’ compensation plan depends on final results, it is needed to present results of sales department’s work to other departments.

 

Finally, sales reports are required for investors, partners and government, so the sales management system should have advanced reporting capabilities to satisfy the needs of different stakeholders.                                                  Thank You.

KPIs can include

marker share

volume share

weigthed and numeric distribution

sales OPEX budget realisation

sales profitabily ratio

 

it can be also specific issus: strategic SKU development, particular channel development