Companies need proper mechanisms in place so that salespeople adhere to the top line and bottom line objectives. Sales Audit is a systematic, critical and unbiased review and appraisal of the basic objectives and policies of the selling function. Sales analysis seeks to identify strengths and weaknesses in the sales data like high turnover-low profit; good and bad customers, high potential and low potential customers.
Companies need proper mechanisms in place so that salespeople adhere to the top line and bottom line objectives. Sales Audit is a systematic, critical and unbiased review and appraisal of the basic objectives and policies of the selling function. Sales analysis seeks to identify strengths and weaknesses in the sales data like high turnover-low profit; good and bad customers, high potential and low potential customers.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Companies need proper mechanisms in place so that salespeople adhere to the top line and bottom line objectives. Sales Audit is a systematic, critical and unbiased review and appraisal of the basic objectives and policies of the selling function. Sales analysis seeks to identify strengths and weaknesses in the sales data like high turnover-low profit; good and bad customers, high potential and low potential customers.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Analysis Companies need to have proper mechanisms in place so that salespeople adhere to the top line and bottom line objectives
Sales Audit is a systematic, critical & unbiased review and
appraisal of the basic objectives and policies of the selling function and of the organisation, policies, methods, principles and personnel employed to implement those policies and achieve those objectives
Salespeople tend to lose sight of this core objective over time;
that is why this becomes critical Sales Control and Cost Analysis Key characteristics: a) Objectives: Each sales function must have clearly stated objectives. Like we want to achieve sales of 20 million units this year without decreasing per unit profit by more than 3%. b) Company Policies: Are they in line with objectives or do they need to be changed. E.g. the compensation structure c) Organisation: Does the company have the resources to achieve the objectives? E.g. overstaffed or understaffed d) Methods: Are the strategies appropriate? Will discounting, for instance dent the brand image? Sales Control and Cost Analysis e) Procedures: Implementation of methods systematically, through allocation of responsibility that is clearly defined.
f) Personnel: Checking whether the individuals are effective in
achieving the stated objectives in line with the defined policies.
Audits seek to answer 4 questions:
a) Who is buying what and how? b) Who is selling what and how? c) How is the competition doing? d) How are we doing? Sales Control and Cost Analysis Sales analysis seeks to identify strengths and weaknesses in the sales data like high turnover-low profit; good and bad customers, high potential and low potential customers, respective performance of sales territories etc.
Allocating sales effort: ‘Iceberg principle’ says that only a small
part of the total situation is visible; the rest has to be gauged through sales analysis. There are customers who account for a smaller percentage of sales but time, money and effort to tap them is no less. These situations must be analysed & corrective action taken. The desirable outcome is that allocation be done based on sales potential and actual sales. Sales Control and Cost Analysis Illustration of sales analysis:
Quota Sales +/- % age
achieved
New Delhi 5 3.78 -1.22 75.6%
Mumbai 7 8.35 +1.35 119.28%
Hyderabad 4 5.49 +1.49 137.25%
Chennai 3.5 3 -0.5 85.71%
Bangalore 2.5 2 -0.5 80%
Figures in Rs. Million unless
otherwise specified Sales Control and Cost Analysis
The data must then be analysed in New Delhi, Chennai and
Bangalore to ascertain which salesperson (s) in these areas missed the quotas. Then we can further analyse where he missed the quota by factors like sales account type, or by product line Sales Control and Cost Analysis Marketing cost analysis: This is done to judge the profitability of various aspects of the sales operations. It can be judged w.r.t. territories, sales personnel, product types, accounts, etc.
Classifying sales expenses: They may be classified as
separable (direct) or common (indirect). Separable are traceable to individual sales people, accounts, channels, products, etc. Common expenses are for the entire company
For instance, salary is a common expense and commission is a
separable expense; even transportation. You cannot attribute administration related sales expenses. Sales Control and Cost Analysis In marketing cost analysis, expenses data is grouped by activity; for instance, all expenses related to field sales are kept separately.
Common expenses have to be assigned logically to different
aspects of the sales operations.
For instance, if the company has a fixed salary component,
how do you divide it among products?
The final formula regards contribution by any aspect of the
sales function: Sales – cost of goods sold – (separable expenses + common expenses attributable on a logical basis)