If the company sells through a network of salespersons who either sell on direct to end users/consumers, or who supply various levels of trade stockist's, then there is benefit in establishing measures of salesperson performance.
What to measure
The company can measure the salesperson’s performance by monitoring:
Monitoring monthly sales against territory sales budgets
The next example illustrates a simplified form (Table ) of an annual sales budget typical of the format (normally logged on a computer) that might be used in monitoring the performance of an individual territory salesperson. Monthly totals for actual sales against budget and for percentage achievement, as well as comparisons with the same time last year, can all be monitored on the same table.
In this example the budget was closely based on the previous year’s actual sales, with a budgeted growth of between seven per cent and nine per cent, depending on product. However, each product actually exceeded the local sales budgets (forecasts). If we look at the individual months, there are some months where sales of products varied greatly from budgeted figures. An unusually high month’s sales would presumably have depleted company reserve stocks, possibly contributing to a lower following month through stock shortages (e.g. electric irons in June/July).
The example territory figures in Table illustrate the use of moving annual total analysis in territory measurement (the concept of moving annual totals as a trend measure is explained in Chapter ). In our example, where we are looking at unit sales rather than sales values (i.e. real growth versus monetary growth), the percentage change in the moving annual total comparison for this year versus last year is increasing as the year moves through the months, indicating a faster rate of growth presumably through greater sales activity (possibly a new salesperson on the territory).
Moving annual totals provide an additional lingerer measure to supplement the normal sales measures of comparing monthly actual data and cumulative annual data.
Those readers who have limited direct sales operations, but who work through a network of specialist distributors (either in the domestic market or in export markets) will find useful extension coverage of the topic of measuring and monitoring performance of distributors in my companion volume, The CIM Handbook of Export Marketing, and are recommended to read that source
Sales Management Related Tutorials
|Marketing Management Tutorial|
Sales Management Tutorial
Roles And Functions In The Sales Force
Sales Structures And Organization
Motivational Management In The Sales Force
Sales Management By Objectives
Motivating Through Rewards And Incentives
Providing Appraisals And Feedback For Motivation, Training And Discipline
Communication In The Sales Force
Sales Meetings And Conferences
Recruitment And Selection In The Sales Force
Basic Sales Training
Field Sales Training
The Planning Process
Sales Force Administration
Sales Management Control
Merchandising At The Point Of Sale
Key Account Management
Alternative Sales Or Distribution Operations
Developing International Markets
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