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UNIT 5 Performance Evaluation and Ethics

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51 views13 pages

UNIT 5 Performance Evaluation and Ethics

ppt

Uploaded by

prideep
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT 5

Performance Evaluation and Ethics


5.1 Sales Performance: Meaning, Methods of Supervision and Control of Sales Force
5.2 Sales Performance Evaluation: Criteria for Evaluation Key Result Area (KRAs), Sales
Performance Review, Sales Management Audit
5.3 Ethics in Sales Management: Meaning of Ethics, Ethical Behavior in Sales
Sales Performance
Sales performance measures and evaluates an individual seller’s or sales team’s ability to reach sales
targets, goals, and objectives. This refers to how effectively they accomplish their objectives during a
specific period of time whether that’s monthly, quarterly, or annually.

Sales performance describes the overall success of a company’s sales team.


It is tracked over a pre-specified period of time (i.e., monthly, quarterly, and annually). Then, it is measured and
interpreted in terms of how well they meet their sales targets and goals. The following are six main components of sales
performance:
1. Account segmentation: Identifying high-value accounts and developing profiles for them.
2. Compensation and incentives: Optimizing payment structure to motivate reps.
3. Pipeline management: Reviewing deals in progress across sales pipelines and ensuring that resources are allocated
appropriately.
4. Quota management: Setting profitable yet achievable sales targets for each rep and monitoring progress.
5. Forecasting: A critical function of sales and finance teams, forecasting helps anticipate trends and inform the
business’s pricing, budgeting, and planning decisions.
6. Territory planning: Structuring sales territories to ensure optimal coverage and leverage each rep’s strengths.
7. When these pieces come together effectively, sales performance metrics accurately indicate how well individual sales
reps, their managers, and the entire organization are doing regarding sales activities and results.
Importance of Sales Performance
Sales performance is crucial to measure for various reasons. Here are a few key points that highlight its
importance:

 Revenue generation

 Goal achievement

 Customer satisfaction

 Cost efficiency

 Market insights

 Employee development

 Competitive advantage
Methods of Supervision and Control of Sales Force
Managers supervise Sales Representatives to – Improve the probability that they will make sales. This objective should imply
profitable sales; but not all Managers seem to appreciate this point. Managers should remem­ber that Sales Representatives can sell a
product at a loss if the Repre­sentative spends a very high proportion of their time selling one Prospect who has a low potential for
future sales.

 Supervising is directing and controlling of methods day to day activities of Sales Person
 Sales Managers use a combination of Methods to supervise and control the Sales representative

Direct Method Indirect Method

Telecommunication Sales Report


Methods of Supervision and Control of Sales Force
Sales Meeting Compensation Plan

Personal Contact Sales Analysis

Personal meeting Expense Accounts


Sales Performance Evaluation
● Sales performance evaluation refers to the annual meeting between a sales manager and their sales
representative where they discuss their work, performance, responsibilities, challenges, progress
made, plans for future development, contributions to the organization, and conduct
sales performance analysis, among other topics.
● Based on this evaluation the manager decides on the promotion, appraisal, and other growth
possibilities.
● An organization's success is often determined by the performance of its sales team. Regularly
reviewing and assessing the performance of your sales team is crucial for identifying strengths,
addressing weaknesses, and ensuring continuous growth.
● Purpose of Performance Evaluation
● To ensure the compensation and other rewards disbursements are consistent with actual sales
performance.
● To identify the sales person that might be promoted
● To determine the specific training program for sales person and the overall sales force.
● To provide information for effective human resources planning.
● To relate salesperson performance to sales organisation goals.
● To improve salesperson performance.
Criteria for Evaluation Key Result Area (KRAs )

KRAs are similar to critical success factors which are commonly used as a tool in strategic
management for assessing organizational performance.

The following are the KRA For Sales Performance criteria

Appointment to enquiries/ proposals


Enquiries/proposals to sales
Sales revenue per order
Sales per hour of selling time
Sales to cost of sales
Gross profit or margin to sales etc

Sales Management of the companies nay be select or modify dome of KRAs or add new KRAs
according to their policy, choice or suitability or appropriateness.

In fact every company should establish or make their own KRAs relating to input (efforts) to
output (result).
Sales Performance Review

 A sales performance review is usually an annual evaluation between individual sales reps and the
leadership team. Occasionally, these can be quarterly reviews, too.
 Sales management teams lead these one-to-one meetings to discuss each rep’s performance, personal goals
and productivity. At the same time, it’s an opportunity to check in. Both sides can discuss career
development opportunities, including promotion potential, financial incentives and action plans for the
coming year.

Advantages of conducting sales performance reviews


Sales performance reviews can be highly beneficial for your individual salespeople and for your entire
company. Here are a few of the top benefits of implementing performance reviews:
 Providing constructive feedback for salespeople
 Improving engagement
 Better communication between managers and reps
Factors to be kept in mind for Sale Performance Review

 Sales Metrics and Performance Analysis/Review (This could include revenue generated, sales volume,
conversion rates, and customer acquisition cost (CAC).

 Sales Process and/or Pipeline Review

• Process review: As a sales leader, you need to ensure your team is set up to succeed and equipped with
everything they need to perform at their best
• Pipeline review: To ensure that your team is working on the right opportunities, review your team's sales
pipeline. This will help you assess the quality of leads, identify areas of support/intervention, and understand
where deals are getting stuck.

 Sales Activities and Skills Review


While the number of sales a rep has made, or the revenue they’ve generated is important, a sales performance
review is a good time to dive deeper into the activities and skills they need to reach their goals.

 Number of leads generated


 Number of meetings booked
 Number of demos given
 Upsell and/or cross-sell rate
 Length of the sales cycle

 Positive and Negative (Constructive) Feedback


 Future Performance Goals
 Recognition and Rewards: A Great Addition to a Sales Performance Review
Sales Management Audit
The Sales Audit is the comprehensive, systematic, periodic, analysis, evaluation and interpretation of business environment, objectives,
strategies, principles to determine the areas of problem or opportunities and recommending the plan of action to improve the sales
performance.

Sales Audit may sound a complex term, but actually it is actually quite simple. It is usually performed by an external auditor with both Sales
and Marketing team analyses the components that make up the sales. It is very important that both Sales and Marketing teams need to be
there for the audit since both divisions are closely knit and the interpersonal relationship and dependency of each divisions are what
brings in business.

Four Main steps in Sales Audit


 Manpower Audit
 Market Audit
 Sales Procedures
 Customer Service Evaluation

Factors to kept in while doing the Sales audit


Sales Objectives: Each sale should a clearly pre-defined objective like increasing the sales from 10% to 16% this year or increased
customer acquisition.
Policies: The internal and external organisational policies are to be followed for the performed sales.
Sales Team: If the sales are under or overstaffed. The distribution and achievement of the target are done properly or not.
Sales Methods: Whether or not the methods employed to achieve Sales are within the limits of the organisation and do they cross the
ethical lines.
Ethics in Sales Management

Meaning Ethics:

The term ethics may refer to the philosophical study of the concepts of moral right and wrong and moral good
and bad, to any philosophical theory of what is morally right and wrong or morally good and bad, and to any
system or code of moral rules, principles, or values.

John Stuart Mill: Ethics is the study of the principles and values that should guide human behaviour in order to
promote the greatest happiness for the greatest number of people.

Sales ethics refers to a set of behaviours that ensure that every lead, prospect and customer is treated with
respect, fairness, honesty and integrity. It means that, as a salesperson or marketer, you put the people you sell to
first.

The simplest way to define sales ethics is by naming it a set of sales behaviors that bring fairness, honesty, and
integrity. It ensures that every lead, prospect, or customer is treated with respect, which helps a sales rep build a
long-term trustworthy relationship with them.
Importance of Ethics in Sales Management

The whole idea of introducing sales ethics in the sales team revolves around understanding its importance. Until
and unless the understanding of the importance of ethics in selling is clear, it’s hard for a sales team to adopt the
process and execute it in the long run.

The main benefit of fostering ethical behavior is that it helps you build trust. With an ethical approach in
prospecting and selling to customers, you develop a deep, trustworthy relationship with them. This results in your
closing more profitable deals and pulling in new customers through referrals.

 Increase in customer experience metrics


 Higher customer satisfaction
 Increase in customer referrals
 More deal closures
 Increase in sales
 More effective branding
Incorporate an ethical culture in our sales team

Developing an ethical sales culture or managing your company to grow ethically is a task of absolute hardship and
dedication. It needs to be implemented from every facet of the organization. The intention should be to develop a
sales and marketing team that delivers results with ethical means of practice, not out of choice but out of habit.

Hire the right salesperson

Develop ethical guidelines

Create a culture of ethical values

Reward the right behavior

Run regular training sessions


THANK YOU

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