MarketingManagement.pdf

308 CHAPTER16 MANAGING THESALESFORCE

Whether a sales contest is focused on selling a specific product or products dur-

ing a limited time period or is a more general recognition of top revenue earners for

the period, the reward should be commensurate with the achievement. Reps who are

well paid and whose earnings are based in large part on commissions are more likely

to be motivated by a trip, a trophy, or merchandise than by a check of equal value. At

the same time, some firms are successfully using less conventional rewards to motivate

sales personnel. Ann Machado, founder and owner of Creative Staffing (an employ-

ment services firm), rewards both sales and nonsales employees with expensive din-

ners, parties, flowers, spa sessions, cooking lessons, and extra vacation time. Her secret

is letting people pick the reward they want and outline what they will do to earn it.

Then all she has to do is approve it. “Letting people choose their own rewards and

goals empowers them,” says Machado.^24

Evaluating Sales Representatives

We have been describing the feed-forwardaspects of sales supervision—how manage-

ment communicates what sales reps should be doing and motivates them to do it. But

good feed-forward requires good feedback,which means getting regular information

from reps to evaluate their performance.

Sources of Information

Management can obtain information about reps in several ways, including sales

reports, personal observation, customer letters and complaints, customer surveys, and

conversations with other sales representatives. Many companies require their repre-

sentatives to develop an annual territory marketing planin which they outline their pro-

gram for developing new accounts and increasing business from existing accounts.

This type of report casts sales reps into the role of market managers and profit centers.

Sales managers study these plans, make suggestions, and use them to develop sales

quotas.

Sales reps write up completed activities on call reportsand, in addition, submit

expense reports, new-business reports, lost-business reports, and reports on local busi-

ness and economic conditions. These reports provide raw data from which sales man-

agers can extract key indicators of sales performance: (1) average number of sales calls

per rep per day, (2) average sales call time per contact, (3) average revenue per sales

call, (4) average cost per sales call, (5) entertainment cost per sales call, (6) percent-

age of orders per hundred sales calls, (7) number of new customers per period,

(8) number of lost customers per period, and (9) sales force cost as a percentage of

total sales.

Formal Evaluation

Sales reports, along with other observations, supply the raw materials for evaluation.

There are several approaches to conducting evaluations. One type of evaluation com-

pares the rep’s current performance to that individual’s past performance and to overall

company averages on key sales performance indicators. These comparisons help man-

agement pinpoint specific areas for improvement. For example, if one rep’s average

gross profit per customer is lower than the company’s average, that rep could be con-

centrating on the wrong customers or not spending enough time with each customer.

Evaluations can also assess the rep’s knowledge of the firm, products, customers,

competitors, territory, and responsibilities; relevant personality characteristics; and

any problems in motivation or compliance.^25 As indicated earlier, an increasing num-

ber of companies are measuring customer satisfaction not only with their product and

customer support service, but also with their salespeople. The sales manager can also