What are the methods of evaluation of sales and sales force?

What are the methods of evaluation of sales and sales force? Explain in detail.

Ans.

Methods of Evaluation of Sales and Sales Force

Following are the methods of evaluation of sales and sales force–

1. Actual Volume of Sales: Under this method report sent by salesmen is analysed and sales is compared with last sale. For the purpose of comparison an average of 6 months 12 months is computed. This method is treated as best method to evaluate the efficiency of a salesman. There can be some causes of reduction in sale eg. adverse weather, high competition, bad quality of goods, higher prices, personal problems etc.

2. Sales Quotas: It is an old method of evaluation of sales and sales force. Generally, a certain quota is determined for every salesman. Sales manager should take proper care while determining sales quota. Under this method comparison of sales is done with sales quota. If sale is less than sales quota, required action shall be taken. If actual sale is more than quota, incentive is provided to salesman.

3. Selling Expenses Ratio: Under this method sale and sales expenses of every salesman is observed. After it sales expenses ratio of all salesmen is compared. A salesman, sales expenses of which are lowest is declared as best salesman.

4. Net Profit Ratio or Gross Profit Ratio: Under this method each area is treated as independent unit and area providing maximum profit is seen. Salesman having more efficiency can sell more goods and provide profits to concern. Thus salesman of such area of which profits are more profit is known as better salesman.

5. On the Basis of Targeted Sales: Under this method firm divides his target sales to various area. After it actual sale and target sale of salesman of each area is compared. This method is like quota system. If firm reaches at its sale, salesman of the area is known efficient salesman.

6. Calls and Sales: There is seemed a close relationship between calls made by customers and salesman. Calls indicate that salesman has made effects in the field. Calls and sale should be increased simultaneously. Otherwise salesman’s effort shall be useless. If there is a greater difference between calls and demand, causes of it should be found out.

7. Non-selling Activities: In non-selling activities of a salesman improving goodwill, training to distributors’ staff, sales demonstration, advertising contract, after sales service etc. are included. If sales manager treats these non-selling activities important, he can evaluate salesman on the basis of these non-selling activities.

8. Average Order Size: Average order size is also important in the evaluation of sales performance. Average order size is compared with per order cast. If in any case cost of an average order is higher, the causes should be found out. Big order should be acquired at minimum cost.