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17 Salesforce evaluation

OBJECTIVES

After studying the chapter, you should be able to:

1. Understand the meaning of salesforce evaluation

2. Understand the salesforce evaluation process
3. Know how standards of performance are set in order that sales can be achieved
4. Understand how information plays a key role in the evaluation process
5. Set qualitative and quantitative measures of performance

KEY CONCEPTS

• appraisal interviewing • salesforce evaluation

• qualitative performance measures • salesforce evaluation process
• quantitative performance measures
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494 Sales control

17.1 THE SALESFORCE EVALUATION PROCESS

Salesforce evaluation is the comparison of salesforce objectives with results. A

model of the evaluation process is shown in Figure 17.1. It begins with the setting of
salesforce objectives which may be financial, such as sales revenues, profits and ex-
penses; market-orientated, such as market share; or customer-based such as cus-
tomer satisfaction and service levels. Then, the sales strategy must be decided to
show how the objectives are to be achieved. Next, performance standards should be
set for the overall company, regions, products, salespeople and accounts. Results are
then measured and compared with performance standards. Reasons for differences
are assessed and action taken to improve performance.

Set salesforce objectives including:

Revenues
Profit contribution
Market share
Customer satisfaction
Customer service
Expenses

Determine sales strategy

Set performance standards for:

Company
Regions
Products
Salespeople
Accounts

Measure results and compare with

standard

Action taken to improve performance

Figure 17.1 The salesforce evaluation process

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Salesforce evaluation 495

17.2 THE PURPOSE OF EVALUATION

The prime reason for evaluation is to attempt to attain company objectives. By meas-
uring actual performance against objectives, shortfalls can be identified and appro-
priate action taken to improve performance. However, evaluation has other benefits.
Evaluation can help improve an individual’s motivation and skills. Motivation is
affected since an evaluation programme will identify what is expected and what is
considered good performance. Second, it provides the opportunity for the recognition
of above-average standards of work performance, which improves confidence and
motivation. Skills are affected since carefully constructed evaluation allows areas of
weakness to be identified and effort to be directed to the improvement of skills in
those areas.
Thus, evaluation is an important ingredient in an effective training programme.
Further, evaluation may show weaknesses, perhaps in not devoting enough at-
tention to selling certain product lines, which span most or all of the sales team.
This information may lead to the development of a compensation plan designed
to encourage salespeople to sell those products by means of higher commission
rates.
Evaluation provides information that affects key decision areas within the sales
management function. Training, compensation, motivation and objective setting are
dependent on the information derived from evaluation, as illustrated in Figure 17.2.
It is important, then, that sales management develops a system of information collec-
tion which allows fair and accurate evaluation to occur.
The level and type of control exercised over international salesforces will depend
upon the culture of the company and its host nations. The boxed case discussion
highlights some important points.

Attainment and
setting of objectives

Compensation Salesforce Training

evaluation

Motivation

Figure 17.2 The central role of evaluation in sales management

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496 Sales control

Controlling international salesforces

The degree to which sales teams are controlled may depend upon the culture of the
employing company. Many European and US companies are profit focused and so
emphasise quantitative (e.g. sales and profit) control mechanisms. Many Japanese
and Asian companies use less formal and less quantitative evaluation systems.
Control systems must take into account the local conditions in each overseas market.
Furthermore, they should account for the type of salesforce employed (expatriates
or foreign nationals). Systems that are used at home may be appropriate for expa-
triates, but for foreign nationals they may be alien to their culture and way of doing
business.

Source: Based on Honeycutt, Jr., E.D. and Ford, J.B. (1995) ‘Guidelines for managing an international sales
force’, Industrial Marketing Management, 24, pp. 135–44.

17.3 SETTING STANDARDS OF PERFORMANCE

Evaluation implies the setting of standards of performance along certain lines that
are believed to be important for sales success. The control process is based upon the
collection of information on performance so that actual results can be compared
against those standards. For the sales team as a whole, the sales budget will be the
standard against which actual performance will be evaluated. This measure will be
used to evaluate sales management as well as individual salespeople. For each sales-
person, their sales quota will be a prime standard of sales success.
Standards provide a method of fairly assessing and comparing individual sales-
people. Simply comparing levels of sales achieved by individual salespeople is un-
likely to be fair since territories often have differing levels of sales potential and
varying degrees of workload.

17.4 GATHERING INFORMATION

The individual salesperson will provide much of the information upon which evalu-
ation will take place. They will provide head office with data relating to sales
achieved by product/brand and customer, a daily or weekly report of the names of
customers called on and problems and opportunities revealed, together with expense
claims.
Such information will be supplemented by sales management during field visits.
These are important in providing more qualitative information on how the salesperson
performs in front of customers, as well as giving indications of general attitudes,
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work habits and degree of organisational ability, all of which supplement the more
quantitative information provided by the salesperson.
Market research projects can also provide information on the sales team from cus-
tomers themselves. A specific project, or a more general one which focuses on the full
range of customer–seller relationships, e.g. delivery, product reliability, etc., can pro-
vide information on salespeople’s performance. A market research study commis-
sioned by Perkins Engines found that salespeople with technical backgrounds were
basing their sales presentation on features which were not properly understood by
their audience.1 This led Perkins Engines to retrain their salesforce so that their sales
presentation focused upon a simple presentation of features and the customer bene-
fits which arose from those features.
Finally, company records provide a rich source of information for evaluation.
Records of past sales levels, calls achieved, expense levels, etc. can provide bases for
comparison and indications of trends that can be used both for evaluation and objec-
tive setting.

17.5 MEASURES OF PERFORMANCE

Quantitative measures of performance

Assessment using qualitative performance measures falls into two groups. For both
groups, management may wish to set targets for their sales team. One group is a set
of input measures which are essentially diagnostic in nature – they help to provide
indications of why performance is below standard. Key output measures relate to
sales and profit performance. Most companies use a combination of input (behav-
ioural) and output measures to evaluate their salesforces.2 Specific output measures
for individual salespeople include the following:
• sales revenue achieved
• profits generated
• percentage gross profit margin achieved
• sales per potential account
• sales per active account
• sales revenue as a percentage of sales potential
• number of orders
• sales to new customers
• number of new customers.
All of these measures relate to output.
The second group of measures relates to input and includes:
• number of calls made
• calls per potential account
• calls per active account
• number of quotations (in part, an output measure also)
• number of calls on prospects.
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498 Sales control

By combining output and input measures a number of hybrid ratios can be deter-
mined. For example:
Number of orders
1. Strike rate =
Number of quotations
2. Sales revenue per call ratio
3. Profit per call ratio (call effectiveness)
4. Order per call ratio
Sales revenue
5. Average order value =
Number of orders
Number of new customers
6. Prospecting success ratio =
Number of prospects visited
Profits generated
7. Average profit contribution per order =
Number of orders
All of these ratios can be applied to individual product and customer types and
help to answer the following questions:
(a) Is the salesperson achieving a satisfactory level of sales?
(b) Is sales success reflected in profit achievement?
(c) Is the salesperson ‘buying’ sales by giving excessive discounts?
(d) Is the salesperson devoting sufficient time to prospecting?
(e) Is time spent prospecting being rewarded by orders?
(f) Does the salesperson appear to be making a satisfactory number of calls per week?
(g) Are they making enough repeat calls on different customer categories?
(h) Are they making too many calls on low-potential customers?
(i) Are calls being reflected in sales success?
(j) Are the number of quotations being made reflected in orders taken?
(k) How are sales being achieved – a large number of small orders or a few large orders?
(l) Are the profits generated per order sufficient to justify calling upon the account?
Many of these measures are clearly diagnostic. They provide pointers to possible
reasons why a salesperson may not be reaching their sales quota. Perhaps they are
lazy – not making enough calls. Perhaps call rate is satisfactory but call effectiveness,
e.g. sales per call, is low, indicating a lack of sales skill. Maybe the salesperson is calling
on too many established accounts and not enough new prospects.
Ratios also provide clues to problem areas that require further investigation. A low
strike rate (order to quotations) suggests the need for an analysis of why orders are
not following quotations. Poor call effectiveness suggests a close examination of
sales technique to identify specific areas of weakness so that training can be applied
more effectively.
A further group of quantitative measures will explore the remuneration which each
salesperson receives. The focus will be on expenses and compensation. With respect
to expenses, comparisons will be made between salespeople and between current
year and last year. Ratios which may be used include the following:
• expenses/sales revenue generated
• expenses/profit generated
• expenses per call
• expenses per square mile of territory.
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Such measures should give an indication of when the level of expenses is becom-
ing excessive. Compensation analysis is particularly valuable when:
• a large part of salary is fixed;
• salespeople are on different levels of fixed salary.
The latter situation will be found in companies which pay according to the num-
ber of years at the firm or according to age. Unfairness, in terms of sales results, can
be exposed by calculating for each salesperson the following two ratios:
• total salary (including commission)/sales revenue
• total salary (including commission)/profits.
These ratios will reveal when a compensation plan has gone out of control and
allow changes to be made before lower paid higher achievers leave for jobs which
more closely relate pay to sales success.
A study by Jobber, Hooley and Shipley surveyed a sample of 450 industrial prod-
ucts organisations (i.e. firms manufacturing and selling repeat industrial goods such
as components and capital goods such as machinery).3 The objective was to discover
the extent of usage of sales evaluation criteria among small (less than £3 million sales
turnover) and large (greater than £3 million sales turnover) firms. Table 17.1 shows
that there is a wide variation in the usage of output criteria among the sample of
firms and that large firms tend to use more output criteria than small organisations.
Table 17.2 shows that the use of input criteria is also quite variable, with statis-
tics relating to calls the most frequently used by both large and small firms. Again,
there is a tendency for large firms to use more input criteria when evaluating their
salesforces.
The growth in the penetration of personal computers is mirrored by the develop-
ment of software packages that provide the facilities for the simple compilation and
analysis of salesforce evaluation measures. The creation of a databank of quantitative
measures over time allows a rich source of information about how the salesforce is
performing.
Alone, these quantitative measures cannot produce a complete evaluation of sales-
people. In order to provide a wider perspective, qualitative measures will also be
employed.

Qualitative measures of performance

Assessment along qualitative lines will necessarily be more subjective and take
place in the main during field visits. The usual dimensions applied are given in the
following list:
1. Sales skills. These may be rated using a number of sub-factors:
• Handling the opening and developing rapport.
• Identification of customer needs, questioning ability.
• Quality of sales presentation.
• Use of visual aids.
• Ability to overcome objections.
• Ability to close the sale.
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500 Sales control

Table 17.1 A comparison of the usage of salesforce evaluation output criteria between small and large
organisations

Statistically
Small Large significant
Evaluative criteria firms % firms % difference

Sales
Sales volume 87.2 93.1
Sales volume by product or product line 61.2 80.3 *
Sales volume by customer or customer type 48.2 59.5
Sales volume per order 22.4 26.7
Sales volume by outlet or outlet type 22.4 38.9 *
Sales volume per call 12.9 24.4 *
Market share 32.9 57.3 *

Accounts
Number of new accounts gained 58.8 55.7
Number of accounts lost 44.7 42.7
Amount of new account sales 57.6 54.2
Number of accounts on which payment overdue 41.2 38.2
Proportion/number of accounts buying full product line 14.1 16.0

Profit
Gross profit generated 58.8 48.9
Net profit generated 38.8 42.7
Gross profit as a percentage of sales volume 47.1 45.0
Net profit as a percentage of sales volume 38.8 34.4
Return on investment 28.2 26.7
Profit per call ratio 12.9 12.2

Orders
Number of orders taken 48.2 38.2
Number of orders cancelled 14.1 13.7
Order per call ratio 25.9 29.0
Number or orders
Strike rate = 37.9 40.5
Number of quotations
Average order value 28.2 26.0
Average profit contribution per order 21.2 16.8
Value or orders to value of quotations ratio 29.4 21.4

Other output criteria

Number of customer complaints 23.5 22.3

Note: *indicates significant at p ⬍ 0.05.

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Table 17.2 A comparison of the usage of salesforce evaluation input criteria between small and large
organisations

Statistically
Small Large significant
Evaluative criteria firms % firms % difference

Calls
Number of calls per period 49.4 69.7 *
Number of calls per customer or customer type 15.3 37.4 *
Calls on potential new accounts 56.5 53.8
Calls on existing accounts 55.3 61.8
Prospecting success ratio:
(Number of new customers)
28.2 32.8
(Number of potential new customers visited)

Expenses
Ratio of sales expense to sales volume 38.8 45.4
Average cost per call 21.2 30.8

Other input criteria

Number of required reports sent in 42.0 42.0
Number of demonstrations conducted 23.5 22.3
Number of service calls made 21.2 23.1
Number of letters/telephone calls to prospects 14.1 7.7

Note: *indicates significant at p ⬍ 0.05.

2. Customer relationships.
• How well received is the salesperson?
• Are customers well satisfied with the service, advice, reliability of the salesperson,
or are there frequent grumbles and complaints?
3. Self-organisation. How well does the salesperson carry out the following?
• Prepare calls.
• Organise routing to minimise unproductive travelling.
• Keep customer records up to date.
• Provide market information to headquarters.
• Conduct self-analysis of performance in order to improve weaknesses.
4. Product knowledge. How well informed is the salesperson regarding the following?
• Their own products and their customer benefits and applications.
• Competitive products and their benefits and applications.
• Relative strengths and weaknesses between their own and competitive offerings.
5. Co-operation and attitudes. To what extent will the salesperson do the following?
• Respond to the objectives determined by management in order to improve per-
formance, e.g. increase prospecting rate.
• Co-operate with suggestions made during field training for improved sales
technique.
• Use their own initiative.
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502 Sales control

What are their attitudes towards the following?

• The company and its products.
• Hard work.
An increasing number of companies are measuring their salespeople on the basis
of the achievement of customer satisfaction. As Richard Harrison, a senior sales man-
ager at IBM, states: ‘Our sales team is compensated based on how quickly and how
efficiently they achieve customer satisfaction’.4
The study by Jobber, Hooley and Shipley also investigated the use of qualitative
evaluative measures by industrial goods companies.5 Table 17.3 shows the results,
with most criteria being used by the majority of sales managers in the sample. Although
differences between small and large firms were not so distinct as for quantitative
measures, more detailed analysis of the results showed that managers of small firms
tended to hold qualitative opinions ‘in the head’, whereas managers of large firms
tended to produce more formal assessments, e.g. in an evaluation report.
As mentioned earlier, the use of quantitative and qualitative measures is interre-
lated. A poor sales per call ratio will inevitably result in close scrutiny of sales skills,
customer relationships and degree of product knowledge in order to discover why
performance is poor.

Table 17.3 A comparison of the usage of qualitative salesforce evaluation criteria between small and large
organisations

Statistically
Small Large significant
Evaluative criteria firms % firms % difference

Skills
Selling skills 81.9 86.9
Communication skills 77.1 85.4

Knowledge
Product knowledge 94.0 90.8
Knowledge of competition 80.7 83.1
Knowledge of company policies 56.6 68.5

Self-management
Planning ability 77.1 76.2
Time management 54.2 61.5
Judgement/decision-making ability 74.7 68.5
Report preparation and submission 63.9 77.7 *

Personal characteristics
Attitudes 91.6 88.5
Initiative 92.8 83.1
Appearance and manner 90.4 86.9
Aggressiveness 45.8 50.8
Creativity 49.4 56.9

Note: *indicates significant at p ⬍ 0.05.

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Quantitatively
measured results

Good Average Bad

Good

– Praise – Limited praise

– Reward – Guide
– Promote – Train

Qualitatively
measured Average
results – Limited praise – Discuss
– Advise – Train
– Educate – Punish
– Remove
Bad

Figure 17.3 Salesperson evaluation matrix

Sales management response to the results of carrying out salesforce evaluation is

shown in Figure 17.3. Lynch6 suggests four scenarios with varying implications:
1. Good quantitative/good qualitative evaluation. The appropriate response would be
praise and monetary reward. For suitable candidates promotion would follow.
2. Good quantitative/poor qualitative evaluation. The good quantitative results suggest
that performance in front of customers is good, but certain aspects of qualitative
evaluation, e.g. attitudes, report writing and market feedback, may warrant advice
and education regarding company standards and requirements.
3. Poor quantitative/good qualitative evaluation. Good qualitative input is failing to be
reflected in quantitative success. The specific causes need to be identified and
training and guidance provided. Lack of persistence, poor closing technique or
too many/too few calls might be possible causes of poor sales results.
4. Poor quantitative/poor qualitative evaluation. Critical discussion is required to agree
problem areas. Training is required to improve standards. In other situations, pun-
ishment may be required or even dismissal.
For an evaluation and control system to work efficiently, it is important for the sales
team to understand its purpose. For them to view it simply as a means for management
to catch them out and criticise performance is likely to breed resentment. It should be
used, and be perceived, as a means of assisting salespeople in improving perform-
ance. Indeed, the quantitative output measures can be used as a basis for rewarding
performance when targets are met. In essence, controls should be viewed in a positive
manner, not a negative one.

Winning or losing major orders

A key qualitative evaluation question that sales managers have to ask is: ‘Does it appear
that we are going to win or lose this order?’ This is particularly important for major
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504 Sales control

sales. For example, a sales manager may be asked by the managing director: ‘Will
you find out whether the Saudis are really going to place that new big aero engine
order? I have to tell the board next week so that we can decide whether we will have
to expand our plant.’
The obvious response would be to ask the salesperson in charge of the sale di-
rectly. The problem is that many salespeople delude themselves into believing they
are going to be successful. How do you come to terms with the fact that you are
going to lose an order worth £5 million? Asking the direct question ‘Bill, are we going
to win this one?’ is likely to get the answer ‘Yes, the customer loves us!’ What the
salesperson really means is that the customer likes the salesperson, not necessarily
the product.
Consequently, the sales manager needs to probe much more deeply in order to as-
sess the situation more accurately. This involves asking a series of who, when, where,
why and how questions. It also means that the sales manager needs to work out
what would be considered acceptable (winning) answers, and what would be
thought of as unacceptable (losing) responses. Table 17.4 gives an example of the use
of this procedure in connection with a £10 million computer sale. The losing answers
are thin and unconvincing (e.g. the director of MIS would not have the power to au-
thorise an order of this size).
The salesperson is deluding themselves and misleading the sales manager. The
winning answer is much more assured and provides clear, credible answers to all of
the questions (e.g. an executive director is likely to have the power to authorise a
purchase of this magnitude).

Table 17.4 Winning and losing orders

Question Poor (losing answer) Good (winning answer)

Who will authorise the The director of MIS. The director of MIS but it
purchase? requires an executive director’s
authorisation, and we’ve talked
it over with them.
When will they buy? Right away. They love the Before the peak processing
new model. load at the year end.
Where will they be when the What difference does that At a board meeting. But don’t
decision is made – in the office make? I think they have worry, the in-supplier has no
alone, in their boss’s office, already decided. one on their board and we have
in a meeting? two good customers on it.
Why will they buy from us? We go way back. The next upgrade from the
Why not their usual supplier? They love our new model. in-supplier is a big price increase,
and ours fits right between their
models. They are quite unhappy
with the in-supplier about that.
How will the purchase They’ve lots of money, The payback period on reduced
be funded? haven’t they? costs will be about 14 months
and we’ve a leasing company
willing to take part of the deal.
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If the outcome is a losing answer, the sales manager has to decide how important
the sale is and how important the salesperson is. If they both have high potential,
the sales manager, sales trainer or top salesperson should work with them. They
should be counselled so that they understand why they are being helped and what
the sales manager hopes they will learn. In the process, they will also realise that
management cares about their development and the success it can bring to both
parties.
If the salesperson is viewed as having high potential but the situation has
low potential, only a counselling session is needed. Usually it is best done at
the end of the day, driving back from a call, using an ‘oh, by the way’ introduc-
tion, and avoiding serious eye contact. By these means the salesperson’s ego is not
offended.
When the salesperson does not have high potential but the sale does, the alterna-
tives are a little nastier. Perhaps the salesperson would be a candidate for redeploy-
ment to a more suitable post. When neither the salesperson nor the sale has much
potential, the basic question is whether the salesperson is redeployed before or after
the sale is lost.

17.6 APPRAISAL INTERVIEWING

Appraisal interviewing can provide the opportunity to identify a salesperson’s

weaknesses and to give praise when it is deserved. One method is to ask the sales-
person to write down 5–10 expectations that they hope to achieve during the next
year, e.g. to go on a presentation skills course, to go on a time management course, to
have monthly sales visits from their sales manager, to meet targets, to move into mar-
keting, etc. The sales manager then sits down with the salesperson and goes through
this list, breaking it down into quarterly (three-month) sections. At the end of each
quarter they have another meeting to see if expectations have been met or shifted in
any way. These meetings also provide an opportunity to give or withdraw recogni-
tion and acceptance.

17.7 CONCLUSIONS

This chapter has explored the sales evaluation process. A model of the evaluation
process is described. It begins with setting objectives, moves to the determination of
sales strategy, the setting of performance standards, measurement of results against
standards and finishes with action taken to improve performance.
A more detailed look at the kinds of measures used to evaluate salespeople was
then taken. Two broad measures are used – quantitative and qualitative indicators.
Such measures can be used to evaluate, control and motivate salespeople towards
better performance.
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506 Sales control

References

1
Reed, J. (1983) ‘How Perkins changed gear’, Marketing, 27 October.
2
Oliver, R.L. and Anderson, E. (1994) ‘An empirical test of the consequences of behavior-based
and outcome-based sales control systems’, Journal of Marketing, 58 (4), pp. 53–67; Oliver,
R.L. and Anderson, E. (1995) ‘Behaviour and outcome-based sales control systems: evidence
and consequences and hybrid governance’, Journal of Personal Selling and Sales Management,
4 (4), pp. 1–15.
3
Jobber, D., Hooley, G. and Shipley, D. (1993) ‘Organisational size and salesforce evaluation
practices’, Journal of Personal Selling and Sales Management, 13 (2), pp. 37–48.
4
The quotation appears in Jap, S.D. (2001) ‘The strategic role of the salesforce in developing
customer satisfaction across the relationship lifecycle’, Journal of Personal Selling and Sales
Management, 21 (2), pp. 95–108.
5
Jobber, Hooley and Shipley (1993) op. cit.
6
Lynch, J. (1992) ‘A new approach to salesperson evaluation’, Proceedings of the European
Marketing Academy Conference, Aårhus, July.
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PRACTICAL EXERCISE

Dynasty Ltd
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 telecom-
munications technology called CT2 (cordless telephone generation two), Dynasty
jumped on the bandwagon of contenders in pursuit of a licence. After some negotia-
tion 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. 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. An inside knowledge of these new products would also im-
press 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.
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508 Sales control

PRACTICAL EXERCISE

MacLaren Tyres Ltd

MacLaren Tyres is a company involved in the import and marketing of car tyres
manufactured in Asia. David MacLaren established the business in 1990 when a
friend living in Singapore told him of the supply of tyres from that area which sub-
stantially undercut European prices. Although Asian tyres were not as long lasting as
European ones (average 18,000 miles compared with 25,000), they were produced to
a high standard which meant that problems like weak spots, cracks and leaks were
no more serious than with European tyres.
MacLaren believed that a viable target market existed for the sale of these tyres in
the United Kingdom. He was of the opinion that a substantial number of people
were interested primarily in the purchase price of tyres. This price-sensitive target
market could roughly be described as the mid–lower income family that owned a
second-hand car which was over three years old.
He decided to buy a consignment of tyres and visited tyre centres to sell them. Initially
business was slow but gradually, as distributors began to believe in the quality of the
tyres, sales grew.
MacLaren was general manager and had recruited five salespeople to handle the
sales function. A brief personal profile produced by MacLaren of each of his sales-
people is given below.

Profiles of MacLaren salespeople

Peter Killick. Joined the company five years ago. Has an HND (business studies)
and previously worked as an insurance salesperson for two years. Aged 27.
Handles the Tyneside area. Gregarious and extrovert.
Gary Olford. Joined the company three years ago. No formal qualifications but
sound track record as a car salesperson and, later, as a toy sales representative.
Aged 35. Handles the Manchester/Liverpool area. Appears to be hard working
but lacks initiative.
Barrie Wilson. Joined the company at the same time as Olford. Has an HNC
(mechanical engineering). Was a technical representative for an engineering
firm. Aged 28. Handles the London area. Appears to enjoy his work but lacks
the necessary ‘push’ to be really successful in selling.
Ron Haynes. Joined the company three years ago. Has a degree in industrial
technology. Previous experience includes selling bathroom suites and textile
fabrics. Aged 29. Covers the Birmingham area. Appears to lack enthusiasm
but sales record is about average.
Kevin Harris. Joined MacLaren Ltd two years ago. Has a degree in business
studies. Only previous experience was as a marketing assistant during the
industrial training period of his degree. Aged 25. Handles the Bristol area.
Keen but still very raw.
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Salesforce evaluation 509

Salesforce data
MacLaren decided that the time had come to look in detail at the sales records of his
sales representatives. His plan was to complete a series of statistics that would be
useful in evaluating their performance. Basic data for the last year relevant to each
salesperson are given below.

Number of
different
Sales Gross margin customers
(£000s) (£000s) Live accounts Calls made called upon

Killick 298 101 222 1,472 441

Olford 589 191 333 1,463 432
Wilson 391 121 235 1,321 402
Haynes 440 132 181 1,152 211
Harris 240 65 296 1,396 421

Market data
From trade sources and from knowledge of the working boundaries each salesper-
son operated in, MacLaren was able to produce estimates of the number of potential
accounts and territory potential for each area.

No. of potential accounts Territory potential (£000s)

Killick (Tyneside) 503 34,620

Olford (Lancashire) 524 36,360
Wilson (London) 711 62,100
Haynes (Birmingham) 483 43,800
Harris (Bristol) 462 38,620

Discussion questions

1 Evaluate the performance of each of MacLaren’s salespeople.

2 What further information is needed to produce a more complete appraisal?
3 What action would you take?
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510 Sales control

Examination questions

1 Quantitative measures of the performance of sales representatives are more likely to

mislead than guide evaluation. Do you agree?
2 Produce a balanced argument that looks at the differences between qualitative and
quantitative measures of sales performance.
3 If a company loses a potential major order what should sales management do to alleviate
the risk of this happening again?