Evaluating Sales Representatives

We have been describing the feed-forward aspects of sales supervision—how management communicates what the sales reps should be doing and motivates them to do it. But good feed-forward requires good feedback, which means getting regular information about reps to evaluate their performance. Information about reps can come from sales reports and salesperson self-reports, personal observation, customer comments, customer surveys, and conversations with other reps.

Many firms require representatives to develop an annual territory-marketing plan in which they outline their program for developing new accounts and increasing business from existing accounts. Sales reps write up completed activities on call reports. They also submit expense reports, new-business reports, lost-business reports, and reports on local business and economic conditions. These reports provide raw data from which sales managers can extract key indicators of sales performance: (1) average number of sales calls per salesperson 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) percentage 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.

Even if effective in producing sales, the rep may not rate highly with customers. Success may come because competitors’ salespeople are inferior, the rep’s product is better, or new customers are always found to replace those who dislike the rep. Sales performance could be related to internal factors (effort, ability, and strategy) and/or external factors (task and luck).²⁷