Controlling the Sales Force

Evaluation Supervision Steps 1) Set Performance Standards 2) Record actual performance 3) Evaluate performance against standards 4) Corrective Action
Sales Management

Controlling the Sales Force

1) Set Performance Standards Important Issues
Information and Knowledge Related to sales objectives Personal selling

a) Quantitative Targets / Standards

Sales Management

Sales Volumes Sales value Market share Expenses Profitability No. of new customers No. of competitor customers
2

Controlling the Sales Force

1) Set Performance Standards b) Qualitative Targets / Standards
Personal effectiveness Customer contact Customer relations / rapport building Customer knowledge Product knowledge Team development Dealer development Attitudes Selling techniques Communication effectiveness

Generally measured by rating scale

Sales Management

Controlling the Sales Force

2) Record Actual Performance 1) Field Reports
Progress / Call / Visit reports Expense reports Work Plan Lost order reports New business / project reports Competition reports Field failure reports

2) Report Design
a) b) c) d)
Sales Management

No. of reports Frequency of reporting Format for reports Information / Details required
4

Controlling the Sales Force

3) Evaluation of Performance
Performance Appraisal Judgement Motivation Appraisal feedback and interview

4) Corrective Action
Performance Improvement Action plan for development Training

Sales Management

Examples
1) HCL Office Equipment Control over sales persons Evaluation and supervision 1) Reports Daily reports to manager
Customer calls Type of calls Business prospects Orders collected

2) Evaluation Check against performance standards

10-12 calls per day New customers met in month Sales Management
6

Examples
1) HCL Office Equipment 2) Evaluation Random checks by manager 3) Sales Expenses control Expenses report
Weekly / quarterly evaluation

Credit / collection control 4) Other reports Monthly report

Market data Order book Inventory
Sales Management

Examples
1)HCL Office Equipment 4) Other reports Sales clearances for next month Orders expected Competitor activities report

Sales Management

Example - Target Setting / Controls

Type of Target Target Acceptable Deviation Follow-up Frequency

Sales 1) Quantitative Efforts

2) Qualitative Efforts

300 Demos, 50 per month, 1000 visits, 170 per month

3 Demos to get 1 Buying customer, 10 visits to get 1 Demo 2 per month on agreed dates 4 per day with follow-ups

0+

Monthly

3 Demos 11 visits

Once a quarter at end of each quarter

3) Additional Efforts a) Sales Promotions b) Direct Mailers Spare Parts Quantitative Efforts

0+ 0+

Monthly Monthly Monthly

3 calls per day, 15 0+ per week 3 visits per week 2 direct mailers per month

Sales Management

Example Target Setting / Controls

Type of Target Target Acceptable Deviation Follow-up Frequency

Skills 1) Product Knowledge

2) Customer Knowledge 3) Customer Handling 4) Presentation Skills Sales Quantitative Results 1) Total 2) Product Mix A B C D E
Sales Management

Rating 7
8 8 7

0
-1 -1 0

Monthly
Monthly Monthly Monthly

1000

0+

Monthly

100 240 200 400 60

0+ 0+ +-20 +-10 O+

Monthly

10

Example Target Setting / Controls

Type of Target Sales 3) Customer Mix Counter Major Buyers Individuals Spare Parts Quantitative Results 1) Total TO Target Acceptable Deviation Follow-up Frequency

500 200 300

+-10% +-20% +-15%

Monthly

1000 250 600 150

0+ +-20% +-20% +-10%

Monthly Monthly

2) Product Mix Accessories Parts Sundries

3) Customer Mix Retail Workshop Warranty
Sales Management

300 550 150

+-15% +-10% +-5%

Monthly

11

Case Study Evaluation of Sales Results

Sales Person Sales Rs. Inc. / dec. over prev. yr +250 +1000 -1000 +2000 -2000 Prod. Mix A 30% 70% 50% 60% 40% 50% Prod. Mix B 70% 30% 50% 40% 60% 50% Change over last yr A -20% +10% -10% +10% -10% Change Cust. over Mix last yr X B +20% -10% +10% -10% +10% 40% 60% 60% 70% 80% 52% Cust. Mix Y 60% 40% 40% 30% 70% 48%

Om Prakash Quyam Rajesh Sunil Average

10000 9000 8000 7000 6000 8000

Sales Management

12

Case Study Evaluation of Sales Results

Sales Person Chang e last year X Change No. of last custom year Y ers Change over last year -10 +10 0 +10 0 Potenti al per cust Rs. 550 600 450 450 400 490 Change Sales over per last yr Cust. Rs. -50 +100 -50 +50 +50 90 75 73 80 75 79 Change over last year +8 +2 -8 +18 -25

Om Prakash Quyam Rajesh Sunil Average

-20% +10% -10% +20% -10%

+20% -10% +10% -20% +10%

110 120 110 90 80 102

Sales Management

13

Case Study Evaluation

Market Information

Market for Product A increasing at 10% per annum

Market for Product B decreasing at 10% per annum Customer Segment X increasing by 10% Customer Segment Y decreasing by 10% Profitability and selling costs are same for both products
Sales Management

14

Case Study Evaluation of Activity Results

Sales Person No. of visits Total No. of visits Seg X No. of visits Seg Y Prop. Of time on Prod A Prop. Of time on Prod B Avg. sales per visit Rs Avg. sales per cust Rs Avg. sales per prosp

Om
Prakash Quyam Rajesh Sunil Average

600
500 400 650 500 530

250
300 200 350 200 260

350
200 200 300 300 270

35%
70% 35% 70% 30% 48%

65%
30% 65% 30% 70% 52%

16.6
18.0 20.0 10.8 13.0 15.5

20
25 22 20 15 20.4

2
8 4 5 1 4

Sales Management

15

Case Study Evaluation and Control

Sales Paramter A) Product Knowledge Product A Product B B) Competition Knowledge C) Customer Knowledge Customer X Customer Y D) Selling skills Prospecting O 5 7 5 3 6 3 P 7 7 5 6 6 8 Q 5 6 4 5 5 5 R 7 5 4 7 4 7 S 3 6 5 5 5 2

Qualifying
Presenting Objections Handling Negotiating Closing
Sales Management

4
6 5 6 4

7
8 6 8 8

6
6 4 4 5

5
6 6 6 5

2
4 4 2 2
16

Case Study Evaluation and Control

Sales Paramter E) Other Skills Telephone Technique Correspondence Time Planning Interpersonal skills O 7 3 6 7 Weak in prospecti ng and closing Strong in IP skills P 8 4 3 6 Weak in time planning Q 6 7 2 8 Strong IP skills but weak in time planning R 5 2 8 4 Strong time planning but weak in IP skills Weak overall S 4 4 3 4

Sales Management

17

Case Study Development Plan

Area 1) General Condition (Hygiene)

Target

Action 6 Go through layout Discuss with Manager Visit 3 dealers 5 Maintain register of important prospects for follow-up 7 Spend one week in demonstration / lecture Visit Customers 7 Product training with Service Manager / at factory

Date 1 week 4 weeks 3rd week 1 week

2) Prospect System

3) Customer Handling

1 week

3rd week Week 7

4) Product Knowledge B, C

Sales Management

18

Case Study Evaluation and Control

MHBD India Ltd. Manufacture and market industrial products Partly own manufactured and partly as agent for foreign suppliers Product A Technically complicated Product B Average technical complexity Product C Raw Material Technically simple

Product D Capital Goods Average technical complexity

Price range medium to average
Product Customer Group X Y Total
Sales Management

Total

20 10 30

20 10 30

30 20 50

20 10 30

90 50 140
19

Case Study Evaluation and Control

Sales Perso n Sales Chan ge prev.y r 0 +3 0 0 +3 -2 Prod A Sales Prod A Chan ge +2 +1 +1.5 0 -1 0 Prod B Sales Prod B Chan ge -1 +2 0 0 +2.5 -1 Prod C Sales Prod C Chan ge +2 -1 +1.5 -1 -1 0 Prod D Sales Prod D Chan ge -3 +1 -3 +1 +2.5 -1

O P Q R S T

25 23 21 20 19 17

6 5 6 5 4 2

4 7 5 4 6 2

11 4 5 7 3 10

4 7 5 4 6 3

U
Total

15
140

-1

2
30

-1

2
30

10
50

+1

1
30

-1

Sales Management

20

Case Study Evaluation and Control

Sales Perso n Mkt X Sales Mkt X Chan ge Mkt Y Sales Mkt Y Chan ge No. of cust Total No. of cust. Chan ge +4 +8 +7 0 +24 -9 No. of cust X No. of No. of cust. cust X Y chang e -6 +10 -7 0 +11 -2 60 40 40 60 40 40 No. of cust Y Chan ge +10 -2 +14 0 +13 -7

O P Q R S T

12 18 11 15 15 9

-2 +3 -3 0 +2 -0.5

13 5 10 5 4 8

+2 0 +3 0 +1 -1.5

95 90 65 100 105 80

35 50 25 40 65 40

U
Total

10
90

+1

5
50

-2

95
650

-12

50

+6

45

-18

Sales Management

21

Case Study Evaluation and Control

Sales Person No. of visits Total No. of visits Cust X No. of visits Cust Y Prop. Of time on Prod A Prod B Prod C Prod D

O P Q R S T

450 650 700 550 700 475

250 500 300 300 500 175

200 150 400 250 200 300

35% 25% 30% 25% 15% 20%

10% 35% 20% 20% 35% 10%

45% 10% 30% 20% 15% 60%

10% 30% 20% 35% 35% 10%

U
Average

600
588

300
352

300
256

10%
23%

15%
21%

70%
35%

5%
21%

Sales Management

22

Case Study Evaluation and Control

Market Information

Market for Product A No change Market for Product B increasing at 10% per annum Market for Product C decreasing at 30% Market for Product D increasing at 10% Customer Segment X increasing by 10% Customer Segment Y decreasing by 10% Profitability and selling costs are same for both products

Sales Management

23

Case Study Evaluation and Control

Sales Person / Charact eristics 1) Age O P Q R S T U

53 years

35 4

30 3

44 8

44 5

45 7

56 15

2) 20 years Experien ce

3) Tech. Backgro und

4) Prod. Know. 5) Cust. Know 6) Contact ability
Sales Management

Some but out of date

Avg. Avg. Very good

Good

Quite good
Avg. Poor in X Difficult

Nil

Weak but studious

Good Good Difficult

Quite good
Fair Poor Weak

Weak

Good Very good Avg.

Quite Good Good Good

Avg. Avg. Weak

24

Case Study Evaluation and Control

Sales Person / Charact eristics 7) Sales Tech O P Q R S T U

Quite good

Good

Avg.

Weak

Very good

Good

Poor

8) Effort inclintn

Lazy

Hard working
Interest level high Easy

Hard working
Well motivate d Least resistan ce Very good

Quite hard working

Quite motivate d Very easy Good

Very hard working

Very well motiv. Easy

Low

Good

9) Not Interest / motivate Motivn. d 10) Directab 11) Phy. Cond. Difficult

Low

Motivate d Avg.

Does not listen Not good

Not good

Good

Very good

Very good

12) Emot. Stab. Sales Management

Prestige minded / erratic

Stable

Very stable

Stable

Somewh at unstable

Unstable Somewh at unstable

25

Case Study Evaluation and Control

Sales Person / Characte ristics 13)Planni ng Abilit y 14) Intelligen ce O P Q R S T U

Poor Very Haphazar good d Avg. High

Good

Plans well

Very good

Plans well

Poor

Avg.

Avg.

High

High

Avg/

Sales Management

26

Sales Control / Analysis

1)Sales Audit Detailed check of sales function Systematic evaluation Critical and unbiased review of
Sales Objectives Policies Organisation / Structure Methods Procedures Personnel

Sales Management

27

Sales Control / Analysis

2) Sales Analysis Analysis of Feedback / data Re-direct sales efforts for better results / more effectiveness

3) Marketing Cost Analysis Selling expenses Branch expenses Common expenses allocation Profit margins / contribution
Sales Management

28