Quantitative Measurement of Salesforce
Academic Note
Quantitative measures of performance evaluation of salespersons
Abstract
Aim here is to understand the evaluation techniques used by the firms and understand the quantitative measures used for evaluation. An overview of the analysis is presented after reading various research papers which have been written on similar lines. One of the most important factors that a sales manager has to look after is the performance evaluation of the salesperson. The methodology adopted to evaluate the salesforce is important as it is the salesperson evaluation that determines the salesforce compensation. Also the expenses associated with fielding the salesforce is emphasize the importance of accurately assessing the salesperson performance
Quantitative measures of performance
How organization conceptualizes salesperson performance affects how they attempt to assess it. Churchill, Ford and Walker (1990) as well as Landy and Farr (1983), conceptualize performance as either subjective or objective.
Objective Measures are the quantitative measures which are further divided into Input measures and output measures. Subjective performance appraisals focus more on the quality and less on the quantity of the salesperson activity.
Assessment using quantitative performance measures falls into two groups. For both groups, management may wish to set targets for their sales team. One group is a set of input measures which are essentially diagnostic in nature – they help to provide indications of why performance is below standard. Key output measures relate to sales and profit performance. Most companies use a combination of input (behavioural) and output measures to evaluate their salesforces.
Some of the output measures are:
• Sales revenue achieved
• Profits generated
• Percentage gross profit margin achieved
• Sales per potential account
• Sales per active account
• Sales revenue as a percentage of sales potential
• Number of orders
• Sales to new customers
• Number of new
Quantitative measures of performance evaluation of salespersons
Abstract
Aim here is to understand the evaluation techniques used by the firms and understand the quantitative measures used for evaluation. An overview of the analysis is presented after reading various research papers which have been written on similar lines. One of the most important factors that a sales manager has to look after is the performance evaluation of the salesperson. The methodology adopted to evaluate the salesforce is important as it is the salesperson evaluation that determines the salesforce compensation. Also the expenses associated with fielding the salesforce is emphasize the importance of accurately assessing the salesperson performance
Quantitative measures of performance
How organization conceptualizes salesperson performance affects how they attempt to assess it. Churchill, Ford and Walker (1990) as well as Landy and Farr (1983), conceptualize performance as either subjective or objective.
Objective Measures are the quantitative measures which are further divided into Input measures and output measures. Subjective performance appraisals focus more on the quality and less on the quantity of the salesperson activity.
Assessment using quantitative performance measures falls into two groups. For both groups, management may wish to set targets for their sales team. One group is a set of input measures which are essentially diagnostic in nature – they help to provide indications of why performance is below standard. Key output measures relate to sales and profit performance. Most companies use a combination of input (behavioural) and output measures to evaluate their salesforces.
Some of the output measures are:
• Sales revenue achieved
• Profits generated
• Percentage gross profit margin achieved
• Sales per potential account
• Sales per active account
• Sales revenue as a percentage of sales potential
• Number of orders
• Sales to new customers
• Number of new
References: Salesperson Evaluation using relative performance Efficiency by James S. Boles, Naveen Donthu and Ritu Lohtia Effects of Effort, Territory situation and Rater on Salesperson Evaluation By John C. Mowen, Keith J. Fabes and Raymond W. LaForge The Selling And Sales Management© Pearson Education Limited 2003, 2006, 2009 Performance Trends and Salesperson Evaluations: The Moderating Roles of Evaluation Task, Managerial Risk Prope nsity, and Firm Strategic Orientation Michael J. Barone and Thomas E. DeCarlo