Professional Documents
Culture Documents
SDM-Ch.7
Learning Objectives
To learn about sales and marketing intelligence system.
To know criteria and types of salesforce expense plans
To understand salesforce audit and its evaluation
process
To learn evaluation of effectiveness of a sales
organisation through sales, cost, profitability, and
productivity analysis
To know purposes and procedure for evaluating and
controlling the performance of salespeople
To understand ethical, social, and legal responsibilities
of sales managers and salespeople
SDM-Ch.7
Sales people
Secondary data
Customers and intermediaries
Trade-shows
The internet
Syndicated reports from research firms
Customer advisory panels
SDM-Ch.7
Salesforce Audit
Salesforce or sales management audit is a part of marketing audit
A marketing or salesforce audit is a comprehensive, systematic,
diagnostic, and prescriptive tool, to be used periodically
Purpose. To assess adequacy of process, improve performance,
recommend changes
Evaluation process of salesforce audit. It has 3 stages. Company
management should find out:
What happened by comparing actual performance with goals
Why it happened by identifying factors contributing to negative
variance. Difficult and time consuming task
What to do about it by taking corrective actions
SDM-Ch.7
Cost Analysis
Profitability Analysis
Productivity Analysis
Sales Analysis
Sales analysis of a company can be done in different ways:
Different alternatives are shown in a framework below:
National and/or international levels sales organisation
All levels
In Sales
Organisation
Regional level
Branch /district level
Territory level
Sales Analysis
Individual level
Different
Type of
Sales
Different
Type of
Analysis
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Natural /
Traditional
Expenses
Total
Functional Expenses
Personal
Selling
Adv. and
Sales
Promotion
Warehousing &
Inventory
Administration
Salaries
20,000,000
10,000,000
4,000,000
2,000,000
4,000,000
Rent
10,000,000
2,500,000
1,000,000
5,000,000
1,500,000
5,000,000
5,000,000
__
__
__
Adv. and
Sales
Promotion
15,000,000
__
15,000,000
__
__
Total
50,000,000
17,500,000
20,000,000
7,000,000
5,500,000
Travel
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Personal selling
Advertising and
sales promotion
Administration
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15
Particulars
Full-cost
Approach
Contribution Approach
Western Region
Branch A
Branch B
Branch C
Sales
400
150
130
120
300
112.5
97.5
90
100
37.5
32.5
30
Branch selling
expenses
12.7
4.5
4.2
W. Region direct
selling expenses
12.0
Contribution (3-4-5)
75.3
33.0
28.3
26.0
Allocated indirect
expenses
36.3
39.0
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Productivity Analysis
Productivity is generally measured by ratio between output & input
Some of the productivity ratios in sales management are:
Sales per salesperson (used by many companies)
Selling expenses per salesperson
Sales calls per salesperson
Improvement in productivity leads to increase in profitability
Some of the methods used by firms to improve productivity
Reducing salesforce size
Hiring manufacturers reps. or agents on commission basis
Using the internet, telemarketing, direct mail to reach
customers
Increasing sales volume substantially
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A firm should decide which of the following bases / criteria it would use: (1)
result / outcome based, (2) efforts / behavioural based, or (3) both results &
efforts based
A company selects performance bases or criteria from a list of alternatives,
some of them shown below:
Quantitative results /
outcome bases / criteria
Sales volume
In value / units
Percentage of quota
by products &
segments
Accounts / customers
New accounts nos.
Lost accounts nos.
SDM-Ch.7
Quantitative efforts /
Qualitative efforts /
behavioural bases / criteria behavioural bases / criteria
Customer calls
No. of calls per day
No. of calls per
customer
Non-selling activities
overdue payments
collected
No. of reports sent
Personal skills
Selling skills
Planning ability
Team player
Personality & Attitudes
Cooperation
Enthusiasm
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Establish Performance
Standards
Performance standards are also called sales goals,
targets, sales quotas, sales objectives
Performance standards for quantitative results are
related to the companys sales volume or market share
goals
Performance standards for efforts / behavioural criteria
are difficult to set
For this, companies do time and duty analysis or
use executive judgement
Performance standards should not be too high or too low
After establishing standards, salespeople must be
informed
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and
salespeople
have
ethical
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Social
Responsibilities
Corporate social responsibility means distinguishing right from
wrong and doing the right
Social responsibility is the managements responsibility to take
decisions and actions for welfare and interests of society and the
company
A company has following four responsibilities to its eight
stakeholders: Customers, Community, Creditors, Government,
Owners, Managers, Employees, and Suppliers, acronym:
CCCGOMES
Ethical responsibilities. Deal with fairness, equity, impartiality
Legal responsibilities. Follow laws and regulations
Economic responsibilities. Produce and market goods /
services that society wants, and make reasonable profits
Voluntary responsibilities. Make social (EG philanthropic)
contributions
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central
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Key Learnings
Sales and marketing intelligence system supplies happening
data to marketing information system (MIS), and it is a part of
MIS.
Salesforce expenses include travel, meals, lodging,
telephone, and customer entertainment
Salesforce expense plans consists of (1) salespeople paying
all expenses, (2) company paying expenses partially, (3)
company paying all expenses, (4) combination plan
Salesforce audit is done to access process adequacy,
improve performance, and recommend changes
For evaluating effectiveness of a sales organisation, the
company analyse sales, costs, profits, and productivity
Sales analysis is done at all levels in a sales organisation, for
(a) evaluation and control, and (b) identifying problems
Purpose of marketing cost and profitability analysis is to
measure profitability of companys marketing units
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Key Learnings
(Continued)
Two approaches for profitability analysis are: fullcost and contribution
Most commonly used productivity ratio in sales
management is sales per salesperson
Main purpose of performance evaluation of
salespeople is to find how salespeople have
performed
Sales managers have ethical, social, and legal
responsibilities
Corporate social responsibility is distinguishing
right from wrong and doing the right
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