UNIT 4
A. Evaluation and Control of Sales Performance
Sales Performance
Methods of Supervision and Control of Sales force
Sales Performance Evaluation Criteria
Sales Performance Review
Sales Management Audit
B.Measuring Distribution Channel Performance
Evaluating Channels
Control of Channel
C.Ethics in Sales Management
D. New Trends in Sales and Distribution
Management

Evaluation and Control of Sales Performance
The evaluation and control of the sales management
system is a step-by-step or sequential process:
1. Setting performance targets, standards and
tolerance limits for the sales strategy,
implementation and achievements.
2. Measuring the actual performance position in
relation to the targets at a particular point of time.
3. Identifying/ diagnosing deviations from the
prescribed targets.
4. Analyzing/ measuring deviations from targets and
given tolerance limits.
5. Incorporating modifications, if and as necessary, to
revise targets/ objectives, plan, strategy and the
implementation process

Methods of Supervision and Control
Supervision refers to the time spent working with
employees to be certain that they are aware of the
responsibilities of their job and how to perform them
correctly.
Supervision is a part of leadership, and it includes
directing and controlling of the day-to-day activities
of salespeople.
There are variations on how closely sales managers
should supervise salespeople.
Usually salespeople who are on commission basis receive
less supervision, in comparison with salespeople who
are compensated by salaries.

Methods of Supervision and Control
Direct
Telecommunication
Sales
Meeting
Personal
Contact
Coaching
Indirect
Sales Report
Compensation
Plan
Sales
Analysis
Expense
Accounts

Direct Supervisory Methods
1. Telecommunication - Many sales managers use
telephone, e-mail, voice mail, fax messages, and
computer-based support systems.
2. Sales Meetings – Formal/ Informal sales meetings may
be held by the sales managers to supply information on
any change in policies and procedures, to arrange for
training programmes, and to inspire or motivate
salespeople to achieve sales quotas.
3. Personal Contacts - Sales manager may visit
customers with each salesperson for various reasons
such as, calling on a specific customer to handle a
particular problem, training a salesperson, team selling
effort, and getting market information.
4. Coaching - Intensively training a salesperson on-the-
job through instruction, demonstration, and practice.

Indirect Supervisory Methods
1. Sales Reports - Includes information about the calls
made, orders obtained, new customers, competitive
activities, customer problems and needs etc.
2. Compensation Plan - Encourages salespeople to carry
out those activities that will maximize their income.
3. Sales Analysis - By using the sales analysis report, the
sales manager can evaluate the performance of each
salesperson by comparing what was sold and how
much was sold with the sales quotas.
4. Expense Accounts / Reports - Indicate how much
money was spent by salespeople on travelling, lodging,
meals, entertainment, as compared to the company
policies on various expenses. It helps to keep control
on selling expenses.

Control of Salesforce
Control keeps sales people alert, active, creative, and
regular in their efforts.
Suitable controlling system is essential to both,
company and salesmen.
After analysis of the nature of sales people, type of
work, degree of cooperation, and other relevant
variables, an appropriate controlling system should be
designed.
It should be noted that control is not for fault-finding
or punishing others, but is meant for help them move
in the right direction.
Sales force control includes verifying sales force
performance and taking corrective actions, if needed.

Salesforce Controlling Methods
• Establishing sales territories.
• Allocating of sales quota.
• Maintaining continuous contact with salesmen.
• Determining authorities and rights of salesmen.
• Routing and scheduling sales personnel.
• Salesmen’s reporting.
• Complaint and objection notes.
• Analyzing sales expenses.
• Observation and visits

Purpose of Supervision and Control
Training
Improving Efficiency Attainment of Objectives
Coordination Compensation
Guidance Evaluation
Motivation
Purpose of
Supervision
and Control

Sales force Evaluation

Case Study
Dynasty Ltd is a radio paging service that has operated since
the mid-1970s when radio pagers took Hong Kong by
storm. Hong Kong still has the world’s highest
concentration of population carrying radio pagers,
currently estimated at around 2 million.
When the Hong Kong government decided to introduce a
new telecommunications technology called CT2 (cordless
telephone generation two), Dynasty jumped on the
bandwagon of contenders in pursuit of a licence. After
some negotiation it was awarded one of the four licences
to operate a CT2 network in Hong Kong. The company is
about to launch this service.
Dynasty’s sales manager was charged with the task of
setting up a salesforce for the market.

Case Study
While CT2 is a sophisticated technology, the sales manager
felt that a deep understanding of the technology was not a
prerequisite for her salespeople. Instead, how to deal with
customers, who tend to be very time conscious and results
orientated, was considered more important.
It was felt that CT2 is a personal product. The new recruits
should have experience in selling products to end-users
and must have broad social contacts.
When reviewing his recruitment plan with her sales director it
became apparent that the sales director had different
ideas.
The sale director was a strong advocate that new recruits
must be familiar with the product and its technology since
that is what they were selling.

Case Study
An inside knowledge of these new products would also
impress would-be customers and give the salespeople an
edge over the competition.
The sales director favoured recruiting from within the
telecommunications industry, since such people are
familiar with the developments of the technology. Apart
from that, they were likely to talk the same language as
people working in engineering, technical support and
service.

Discussion Questions
1. Justify what general factors you consider should be taken
into account when recruiting salespeople for the positions
described in the exercise. In particular, suggest how the
performance of such salespersons could be evaluated?
2. State whether you agree with the sales manager or the
sales director or neither.
3 Suggest and justify the kind of commission structure that
you would put into place

Sales Performance Evaluation Criteria
• The sales performance evaluation criteria should focus
on results, and also involve identification of key result
areas (KRAs).
• KRAs are those factors or aspects of sales plan,
strategy and implementation in which a salesperson or a
company must excel to outperform competitors.
• The salesperson and the company should possess
underlying competences or capabilities which should be
connected with the KRAs.
• KRA analysis highlights the important relationship
between resources, competencies and choice of sales
plan and strategy which is important for assessing
performance.

Sales Performance Evaluation Criteria
• KRAs are similar to critical success factors (CSFs) or
key success factors (KSFs) commonly used as a tool in
strategic management for assessing organizational
performance.
• Some of the key result areas, that are the quantitative
indicators, form the basis of an effective evaluation and
control system for most of the sales forces.

Sales Performance Evaluation Criteria
Some of the KRAs are:
• Appointments to enquiries/proposals.
• Enquiries/proposals to sales.
• Orders to sales calls (strike rate).
• 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 a particular company may select or
modify some of these KRAs or add new KRAs according
to their policy, choice or suitability or appropriateness.
In fact, each company should establish its own KRAs
relating input (effort) to output (result).

Sales Performance Evaluation Criteria
A combination of qualitative and quantitative evaluation
criteria may produce different outcomes and
recommended reward or punishment and remedial actions.
Qualitative criteria range from personal characteristics of
salespeople to self-management.
The Qualitative criteria can be classified under four heads:
i) Personal Characteristics - Attitude, initiative, creativity,
aggressiveness.
ii) Knowledge - Knowledge of product, markets, company
policy.
iii) Skills - Selling skills, communication skills.
iv) Self – management - Planning ability, decision –
making ability, time management.

Sales Performance Review
Sales performance at the organizational level should be
evaluated from different perspectives so that the
evaluation process helps to identify the drawbacks or
shortfalls in the strategy formulation and implementation
system and appropriate remedial or corrective measures
may be undertaken.
A detailed sales review can be done in two major
ways/forms :
• By the level in the organization - national, and, then,
regional, branch etc.
• By the type of sale - product, customer etc.
The evaluation of sales performance can be done against
predetermined standards or benchmarks.

Sales Performance Review
The evaluation should be on relative or comparative basis
to reveal the real performance of a company.
A comparative assessment of sales performance of a
company may be made in four different ways or forms with
different bases of comparison:
i.Actual sales (total) in relation to target.
ii.Sales growth (or decline) relative to last year.
iii.Sales growth (or decline) in comparison to industry
growth (decline).
iv.Sales level compared to that of major competitors.

Sales Management Audit
Sales management audit is a systematic, diagnostic and
prescriptive tool for analyzing, reviewing and controlling
sales operations or the sales management process.
The objective of sales management audit is to assess
whether a firm's sales management process is adequate,
to give direction for performance improvement, and to
recommend the needed changes.
Sales management audit is a step-by-step process:
1. Planning sales and course of operation during the year
2. Measure the performance
3. Deviations from the planned course of action
4. Ascertain reasons for deviation
5. Course correction

Ethics in Sales Management
Sales managers are not only responsible for their actions
but also the actions of their salespeople.
Salespeople are considered boundary spanners because
they work in the "boundary" between customers and the
organization.
As such, they perform actions that link the customer to the
firm. In this position, the salesperson often faces an ethical
dilemma involving the fair treatment of customers, the
organization, or both.
Sales managers are also responsible in establishing,
communicating and enforcing the ethical standards of their
sales people.
Ethical dilemmas are faced by sales managers in carrying
out various sales management tasks.

Ethics in Sales Management
Salespeople should be honest in their dealings with
customers and be informed of relevant laws governing
their business situation.
Unethical sales behaviour include :
• Exaggerating features and benefits.
• Lies about availability of product/ service.
• Giving false answers to questions.
• Falsifying product testimonials.
• Misrepresent warranties and guarantees.
• Make nonbinding oral promises.
• Bending company rules.
• Selling dangerous or hazardous products without the
knowledge of customers

Ethics in Sales Management
Sales managers have to set certain code of ethics to be
followed by salespeople in the organization:
1.Company codes that define ethical boundaries for
employees.
2.Professional codes that define ethical boundaries for
occupational groups such as advertisers, marketing
researchers, sales representatives, doctors, lawyers,
accountants, and so on.
3.Business association codes that define ethical
boundaries for people engaged in the same line of
business.
4.Advisory group codes suggested by government
agencies or other special interest groups.

New Trends in Sales and Distribution
• Global Perspective
• Salesforce Diversity
• E-selling
• Technology Revolution
• E–Customer Relationship Management
• Team Selling Approach
• Managing Multi-channels
• Handling Ethical Issues
• Sales Professionalism
• Zero Contact Delivery
• Online Payment System

Thank You
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