1. Evaluating Sales force Performance
CHAPTER 15
Evaluating Sales force Performance

2. THE SALES AUDIT
...a comprehensive, periodic review and evaluation of the sales function

3. THE SALES AUDIT The audit includes an appraisal of objectives
personnel
tactics

4. STEPS IN THE SALES AUDIT
Find out what happened
Find out why it happened
Decide what to do about it

5. EVALUATING EFFECTIVENESS
Sales Volume Analysis
Cost Analysis
Profitability Analysis
Productivity Analysis

6. SALES VOLUME ANALYSIS
A study of the net sales section of the profit and loss statement.
Examine sales by product lines, territories, key accounts, and general classes of customers.

7. SALES VOLUME ANALYSIS Two approaches: Hierarchical Sales Analysis
Effectiveness Analysis

8. HIERARCHICAL SALES ANALYSIS
A multistage analysis which proceeds from one sales organization level to the next by
identifying major deviations
investigating these in more detail at the next lower level.

9. Example of Hierarchical Sales Analysis

10. EFFECTIVENESS INDEX
Examine territory performance relative to potential

11. STEPS IN AN EFFECTIVENESS ANALYSIS
Select a market index that indicates what percentage of total sales should be obtained from each sales territory.

12. STEPS IN AN EFFECTIVENESS ANALYSIS
Determine the company’s actual total sales in dollars or units during the period being studied.

13. STEPS IN AN EFFECTIVENESS ANALYSIS
Multiply the territorial index by the total sales figure to determine the goal in each district.

14. STEPS IN AN EFFECTIVENESS ANALYSIS
Compare actual regional sales with the regional goals to see how much variation has occurred.

15. Example Effectiveness Analysis

16. HIERARCHICAL AND EFFECTIVENESS ANALYSIS
Territories
Different products
Sales by accounts
Channels of distribution

17. MARKETING COST ANALYSIS
A study of marketing expenses to determine profitability of marketing segments in the firm.
Two Approaches
Variance Analysis
Percentage of Sales

18. VARIANCE ANALYSIS
Variance represents the difference between actual costs and budgeted costs.
High variances should be examined further.

19. PERCENTAGE OF SALES
Examines costs as a percentage of sales.

20. PROFITABILITY ANALYSIS
Return on Assets Managed (ROAM)

21. RETURN ON ASSETS MANAGED (ROAM)
Measures how productively the assets in each segment of the business have been employed ROAM= Profit contribution/Assets Managed

22. ROAM Example

23. PRODUCTIVITY ANALYSIS
Additional productivity analysis may be required to get a fuller picture of organizational effectiveness.
Measured in terms of inputs and outputs.

24. Example Productivity Analysis

25. WHAT IS DONE WITH THIS INFORMATION?
Adjust territorial boundaries
Adjust product line
Change classes of customers

26. FROM THE TEXT
Read everything except Residual Income Analysis on pages 724 to 726.