Chapter
16
Evaluating a
Salesperson’s
Performance
Why should our endeavor be
so loved, and the performance
so loathed?
William Shakespeare
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Procedure for Evaluating Salespeople
(Fig. 16-1)
1. Establish
basic
policies
2. Select
evaluation
bases
3. Set
performance
standards
4. Compare
performances
standards
5. Discuss
results with
salespeople
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Output Factors Used as Evaluation Bases
(Fig. 16-2)

Sales volume




Sales volume as a percentage of:




Quota
Market potential (i.e., market share)
Gross margin by product line, customer group, and order
size
Orders





In dollars and in units
By products and customers (or customer groups)
By mail, telephone, and personal sales calls
Number of orders
Average size (dollar volume) of order
Batting average (orders / calls)
Number of canceled orders
Accounts




Percentage of accounts sold
Number of new accounts
Number of lost accounts
Number of accounts with overdue payment
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Quantitative Input Factors Used as
Evaluation Bases (Fig. 16-3)
 Calls per day (call rate)
 Days worked
 Selling time versus nonselling
 Direct selling expense



In total
As percentage of sales volume
As percentage of quota
 Nonselling






time
activities
Advertising displays set up
E-mails/letters written to prospects
Telephone calls made to prospects
Number of meetings held with dealers and/or
distributors
Collections made
Number of customer complaints received
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Qualitative Input Factors Used as Evaluation
Bases (Fig. 16-4)
 Personal




efforts of the sales reps
Management of their time
Planning and preparation for calls
Quality of sales presentations
Ability to handle objections and to close sales
 Knowledge




Product
Company and company policies
Competitor’s products and strategies
Customers
 Customer relations
 Personal appearance and
 Personality and attitudinal




health
factors
Cooperativeness
Resourcefulness
Acceptance of responsibility
Ability to analyze logically and make decisions
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Ratio Measures
Sales =
Days worked
X
Days worked
X
Calls
Days worked X
Call rate
X
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Orders
Calls
Sales
Orders
X
Batting average
X
Average order
A Behaviorally Anchored Rating Scale for
Evaluating Team Participation (Fig. 16-5)
Rating
Numeric
Description Rating
Behaviors
Outstanding
10
Can be expected to go beyond what is normally
expected to help the team achieve its goals
Above average
8
Can be expected always to cooperate and
contribute to the team objectives. Tries hard to
help make the team successful.
Average
5
Usually willing to cooperate and participate in
team efforts.
Below average
2
Can be expected to participate in team efforts
only to the extent required. Shows no initiative
with regard to team efforts.
Poor
0
Unwilling to participate. At times may work
against team goals.
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Evaluation of
Sales Reps’
Performance
(Fig. 16-6)
Joe Jackson
Gus Dean
Product Line:
EquipmentClothing
TotalEquipmentClothing
Total
Total sales (000)
$480
$720
$ 1,200 $220
$460
$ 680
Sporting goods stores320
440
760 160
320
480
Ski shops
160
280
440 60
140
200
Total calls made
700
900
Sporting goods stores
300
500
Ski shops
400
400
Total orders taken
500
600
Sporting goods stores
150
450
Ski shops
350
150
Days worked
220
240
Expenses
$48,000
$40,000
Miles traveled
60,000
45,000
Total market potential $2.00
$4.00
$6.00 $1.20
$2.40
$ 3.60
(millions)
Sporting goods stores1.60
2.40
4.00 0.80
1.60
2.40
Ski shops
0.40
1.60
2.00 0.40
0.80
1.20
Sporting
Sporting
Goods
Ski
Goods
Ski
Stores
Shops
TotalStores
Shops
Total
Average order
$5,087
$1,257
$2,400 $1,067
$1,333
$1,133
Batting average
0.500
0.875
0.714 0.900
0.375
0.666
Calls per day
3.18
3.75
Miles per call
86
50
Expense per sales dollar
4.00%
5.90%
Cost per call, excluding
commission
$68.57
$44.44
Cost per order, excluding
$96.00
$66.67
commission
EquipmentClothing Total
EquipmentClothing Total
Total percent of market24.0%
18.0%
20.0%
18.3%
19.0%
19.0%
Sporting goods stores20.0%
18.0%
19.0%
20.0%
20.0%
20.0%
Ski shops
40.0%
17.5%
22.0%
15.0%
17.5%
16.7%
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.
Evaluation of
Sales Reps’
Performance
(Fig. 16-6)
(continued)
Paula Burns
Total
Product Line:
EquipmentClothing
Total Equipment Clothing
Total
Total sales (000)
$240
$280
$ 520 $940
$1,460
$ 2,400
Sporting goods stores
100
160
260
580
920
1,500
Ski shops
140
120
260
360
540
900
Total calls made
1,100
2,700
Sporting goods stores
500
1,300
Ski shops
600
1,400
Total orders taken
850
1,950
Sporting goods stores
400
1,000
Ski shops
450
950
Days worked
230
690
Expenses
$36,000
$124,000
Miles traveled
35,000
140,000
Total market potential
(millions)
$1.20
$1.20
$ 2.40 $4.40
$ 7.60
$ 12.00
Sporting goods stores
0.72
0.64
1.36
3.12
4.64
7.76
Ski shops
0.48
0.56
1.04
1.28
2.96
4.24
Sporting
Sporting
Goods
Ski
Goods
Stores
Shops
Total Stores Ski Shops
Total
Average order
$ 650
$ 578
$ 612 $1,500.00 $947.00
$1,231.00
Batting average
0.800
0.750
0.773 0.679
0.769
0.722
Calls per day
4.8
3.9
Miles per call
32
52
Expense per sales dollar
6.90%
5.20%
Cost per call, excluding
$32.72
$ 45.92
commission
Cost per order, excluding
$42.23
$ 63.59
commission
Equipment Clothing
Total Equipment Clothing
Total
Total percent of market
20.0%
23.3%
21.7%
21.4%
19.2%
20.0%
Sporting goods stores
13.9%
25.0%
19.1%
18.6%
19.8%
19.3%
Ski shops
29.2%
21.4%
25.0%
28.1%
18.2%
21.2%
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.