Exam 4

Sales Organization Effectiveness
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Terms in this set (46)
What are ways to assess the costs in a cost analysis?Calculate the variance between actual costs and planned budgeted costs to determine largest variations Calculate selling cost as a percentage of actual sales achieved and compare to a planned budgeted percentageWhat is the type of expense to examine when completing a cost analysis?The expenses must be ones that are controllable by the salesforce Do not use uncontrollable expenses, such as production expensesWhat is the objective to achieve when determining the selling budget?Determine the lowest expenditure level necessary to achieve sales quotasWhat are the two approaches to setting the selling budget?Percentage of Sales Method Objective and Task MethodPercentage of Sales MethodExpenditure percent x forecasted sales Need an accurate sales forecast Need accurate expenditure percentObjective and Task MethodState objectives Identify tasks necessary to achieve objectives Estimate cost of tasks Costs are reviewed and through an iterative process selling budgets are approvedWhat is the formula for Return on Assets Managed?Profit contribution % of sales x Asset turnover rateWhat is the general ratio typically used to express productivity?Expressed by general ratio of inputs to outputBenchmarkingOngoing measurement and analysis Compares a firm's activities with ones from other firms The other firms must be the best- using "best practices"What should Benchmarking provide?A measure for comparing performance to another firm Identify the performance gap when comparison is made to another firm Identify best practices and facilitators that produced the better results Determine performance goals and identify areas in which action can be taken to improve performanceSix SigmaA systematic method for improving processes and eliminating variations in output Eliminate defectsWhat are the Six Sigma StepsDefining the problem Measuring- collecting data on the problem Analyzing the data Determining how to improve Implementing change so you have control over the problem- it does not happen againWhat is a 360-Degree Feedback System?Evaluated by multiple anonymous raters Salesperson and sales manager do not know ratings given by individual Helps salespeople better understand their ability to add value to their organization and their customersFour stages of a Performance Management approach to completing evaluationsSalesperson and sales manager discuss performance and activities for the whole time period Sale manager rates salesperson on performance and activities using standards- determines if they are above/meeting/below expectations Performance and activities are compared to previous evaluation Discussion and agreements on future objectives, improvements needed and action planWhat are the 3 key decisions for evaluating salesperson performance?What is evaluated? What perspective(s) are taken? When should evaluations be completed?How often to most firms evaluate salespeople?Once a yearWhat are the four general areas of evaluation?Behavioral Professional Development Results ProfitabilityBehavior Based PerspectiveBehavioral Professional DevelopmentOutcome Based PerspectiveResults ProfitabilityWhen choosing what will be evaluated, what is considered?Relevant Measurable Discriminating StableRelevantFocus on relevant job activity (% of sales made by phone)MeasurableMust be able to measure quantitative or qualitatively (% of times thanking customers)DiscriminatingMust be able to detect differences among salespeople (sales, number of orders, expenses)StableTwo or more people must agree on the meaning of what is being evaluated, it may need to be more specific with what you want to evaluate (good communication)When choosing how to evaluate, what are the four characteristics to consider?Reliability Validity Standardization ComparabilityReliabilityConsistently represent characteristic being measured- internal consistencyValidityShould provide accurate assessment of what you are measuringStandardizationThe measurement instruments and evaluation process should be similar throughout the sales organizationComparabilityThe results of the performance evaluation process should make it possible to compare the performance of individual salespeopleWhat are the four methods used to complete evaluations?Graphic Rating/Checklist Methods Ranking Methods Objective-Setting Methods Behaviorally Anchored Rating Scales (BARS)Graphic Rating/Checklist MethodsSalespeople are evaluated using some type of performance evaluation form Especially useful in evaluating behavioral and professional development criteria May be filled out by customers Disadvantage is providing evaluations that discriminate sufficiently Almost Never 1 2 3 4 5 Almost AlwaysRanking MethodsRank all salespeople according to relative performance on each performance criterion These methods force discrimination as to the performance of individual salespeople May be complex Rankings only reveal relative performance evaluationObjective-Setting MethodsManagement By Objectives (MBO) Mutual setting of well-defined and measurable goals within a specified time period Managing activities within the specified time period toward the accomplishment of the stated objectives Appraisal of performance against objectivesBehaviorally Anchored Rating Scales (BARS)Links behaviors to specified results Salespeople are used to develop performance results and critical behaviors Positive feedback about behaviors may be more effective than positive output feedbackThree common sources of biasPersonal Relationships Perceived Difficulty of Territory Manager Focusing Primarily on OutcomesThree types of bias that may occurCentral Tendency Errors Different Evaluation Standards The Halo Effect