FAR EASTERN UNIVERSITY
CASE STUDY 11
Concord and Associates
Evaluating a Sales Territory
SPECIAL TOPICS IN SALES AND MARKETING
MBA 730
FEU-Diliman
Submitted by:
DJHOANA JET SIAO
CARL RYAN TAGUBA
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CHAPTER 14- ASSESSING THE PERFORMANCE OF THE SALES FORCE
AND THE PEOPLE WHO COMPRISE IT.
In order to control the sale's effort so goals of the firms are accomplished
,managers need to continually monitor and evaluate the performance levels of
both the individuals who comprise the sales force and the sales force as a whole.
Without conducting evaluations, it is impossible for sales managers to know what
about a strategy is or is not working, why and most importantly what should be
done about it. Information from evaluations will affect the firm's sales planning
in future periods.
EVALUATION TECHNIQUES
To increase the probability that the sales force will reach its goals, sales managers
analyze their firm's sales, costs and profitability measures.
A. SALES ANALYSIS- sales information provides managers with understanding
of the revenue the firm generated.
B. COST ANALYSIS- cost figures relate the company's sales expense to its sales
goals
C. PROFIT ANALYSIS- profitability figures tell supervisors if the sales effort
was worthwhile
The analyses help managers identify deviations from the firm's plans that can be
further investigated to understand why they occurred. If the firm's plans are not
achieved, sales managers must determine whether the plans were incorrectly set
and/or if the sales force did not perform up to par. Based upon the results of the
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analyses, managers can decide what aspects of the sales function and the firm as a
whole need to be changed.
To ensure sales representatives are on track , sales managers continually monitor
their performance. Formal appraisals are conducted once or twice a year to
understand their performance, potential for advancement and qualifications for
reward. Salespeople are evaluated based upon their inputs, or efforts they make to
sell the firm's products, plus the outcomes they achieve, such as the revenues and
profits they actually generate. Professional development criteria are also included.
By utilizing multiple measure, managers gain a more comprehensive picture of
their salespeople. They must also be aware of the potential for bias to enter into
the assessment process and take steps to prevent it.
When sales managers perform regular, objective and comprehensive evaluations,
they will be more cognizant of both their sales forces and the markets for their
products. This will allow them to make more informed decisions and improve the
odds that they, their salespeople and the firm as a whole succeed.
QUESTIONS:
1. There is little doubt that there are negative trends in regard to Jose's annual
performance. Analyze the data to uncover specific behaviours that contributed to
his level of performance.
The negative trends in Jose's annual performance were mainly due to the ff
reasons:
He worked only 210 days in the year, the lowest of any of the salespeople
He had the least amount of sales calls per day (3)
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He had the lowest number of total # of sales made at 68
Jose's incurred expenses were the highest among the team of salespeople
at $30,500
He travelled 45.6 miles a call- the second highest only to Robert
Among the sales team, he has the highest percentage of Rush orders at
10.5%
He had the most complaints out of the sales team (16)
* In evaluating individual sales representatives managers include assessment of
four separate appraisal areas: input measures, outcomes, profitability, and
personal development.
Input measures gauge the effort put forth by the salesperson to contact, work with
and sell to buyers.
Outcome measures provide an indication of the salesperson's ability to close a
sale.
Salesperson can impact their firms Profitability through (1) specific products sold
and (2) final prices negotiated for them. Likewise, expenses salespeople
accumulate, such as travel and entertainment expenses impact their firm's
Profitability.
2. Are any other salespersons that work for Emily Murray having potential
problems in any performance areas? If so, what are they?
Robert (New Mexico territory) travelled 47.8 miles per sales call- higher than any
other member of the sales team. However, this may be due to the fact that New
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Mexico's towns and cities are isolated and far from each other. Also, Marites
(Simi Valley district) made 108 calls, well above the sales team's average of 83.8.
However, all of Emily's salespeople (besides Jose and Susan) surpassed their sales
quotas.
*Examination of qualitative performance measures were applied on Emily's team
to see if any other member of her sales team had problems with their performance
and abilities compared to those representatives who were performing well.
3. Based upon the information presented in the case, what strategy or approach
does Jose appear to be taking when meeting with his customers?
One of the reasons why Jose had been receiving the most complaints this year was
because he was promising his customers unrealistic delivery dates. He also has
inadequate knowledge of a competitor and has no clear strategy or approach in
dealing with them as he approaches his customers and ends up being outbid by
them.
*Outcome measures are the results of salespeople's efforts and provides an
indication of the salesperson's ability to close a sale. Examples of which are the
number of new customer accounts opened and the sales revenue to new
customers. Cancelled orders and lost accounts are also output measures. Output
measures are highest when they devote a sufficient amount of time and quality to
their input measures.
4. Compute several ratios discussed in the evaluation chapter to help you compare
and contrast the six salespersons managed by Emily Murray. Are these ratios
helpful in your evaluation? How so?
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Bob (San Diego) quota : 2200:2315 sales
Susan (LA) quota: 2800:2795 sales
Omar (Anaheim) quota: 3100:3500 sales
Jose(Phoenix/Tucson) quota: 1950:1600 sales
Robert (New Mexico) quota: 2100: 2110 sales
Marites (Simi Valley) quota: 2950: 2965 sales
* Ratio Measures for Performance appraisals
The ratios are helpful in a side-by-side performance evaluation because they
allow you to compare two variables and spot correlations in the data.
5. What reasons might Jose offer to rebut a negative annual performance
appraisal? How might Emily Murray respond to his rebuttal?
Jose might reason out that he exceeded his quota on Product A, and that he had to
travel the second highest miles per sales call due to the geographic size of his
territory. Emily would reply that Jose is just making up these excuses and that he
clearly did not work as hard as the rest of the team. There are really no strong
rebuttals or excuses Jose can make to explain his underachieving this year. He
should listen to Emily's advice and try to improve results in his district next year
by being more proactive, showing up to work more and making more calls.
*Emily effectively tries to eliminate evaluation bias by not just focusing on one
category like Jose's high sales revenue on one product but also emphasizing his
low ratings on other important performance measures.
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6. Write a formal narrative to Jose to explain your evaluation of his performance.
Remember the importance of being factual and objective.
"After a thorough review of the numbers in my database , I have noticed that you
had worked the fewest days and had the least amount of calls per day. You also
had the highest amount of expenses and had the largest number of complaints
among our salespeople. You have failed to meet your sales quota this year in
Phoenix/Tucson district. I would like to hear your explanation about that and
any other concerns you may have."
* One purpose of performance appraisals is to help salespeople meet or exceed
their goals . An important part of the performance appraisal process is providing
accurate feedback to the salesperson in a way that motivates the person to
improve. If it is determined that the salesperson requires additional personal
development, this should be clearly communicated to them.
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