1. TOOLS FOR SALES SUPERVISION AND CONTROL Dr. Sanjeev Prashar

2. The Management Cycle Four steps remain in the management process also referred to as the management cycle Establishing performance standards Recording performance Evaluating performance against standards Taking action These four steps constitute what is known as control. Control has both static and dynamic facets.

3. 1. Standards of Performance Standards of sales performance facilitate the measurement of progress made toward departmental objectives Performance standards are designed to measure the performance of activities that the company considers most important.

4. Setting sales performance standards requires  considerable market knowledge.  total sales potential and the portion that each sales territory is capable of producing.  evaluation of customers and prospects from the standpoint of potential profitability for each class and size of account.  evaluation of competitors strengths, weaknesses, practices and policies  Management must know the selling expenses in different territories. These items all bear on the setting performance standards, specially quantitative standards.

5. Quantitative Performance Standards Provide description of what management expects. These help sales personnel make their activities more purposeful. Sales personnel with well defined objectives waste less time or effort in pursuing activities that do not contribute to reach those objectives. In the past the performance of sales individuals were measured solely in terms of sales volume No control over certain factors “uncontrollable” Resultant - other quantitative performance standards besides sales volume.

6. Types of Quantitative Performance Standards Quotas Quotas specify desired levels of accomplishment for sales volume, gross margins, net profit, expenses Try to answer the question-  How much for what period? In setting sales quota, management estimates future demand for the company’s product in each territory and then finalizes the quota.

7. Selling Expense Ratio Sales managers use this standard to control the relation of selling expenses to sales volume. Selling expenses ratios should be set individually for each person on the sales force. An attractive feature of selling expense ratio is the sales person can affect it both by controlling expenses and by making sales.

8. Territorial Net Profit or Gross Margin Ratio Managements regard each sales territory as a separate organizational unit that should make a profit contribution. Sales personnel influence the net profit ratio by selling more volume and by reducing selling expenses. They may emphasize more profitable products and devote more time and effort to the accounts and prospects that are more profitable. Shortcomings sales personnel may “ high spot” their territories, neglect the solicitation of new accounts and overemphasize sales of high profit of high margin products while underemphasizing new products that may be more profitable in the long run.

9. Territorial Market Share This standard controls market share on a territory by territory basis. Management sets target market share percentages for each territory. Management compares company sales to industry sales in each territory and measures the effectiveness of sales personnel in obtaining market share.

10. Sales Coverage Effectiveness index This standard controls the thoroughness with which a sales person works the assigned territory. The index consists of the ratio of the number of customers to the total prospects in the territory. Individual standards for Sales Coverage effectiveness are set up for each class and size of customer.

11. Call Frequency Ratio Calculated by dividing the number of sales calls on a particular class of customers by the number of customers in that class. Management directs selling effort to those accounts most likely to produce profitable orders. Management should assure that the interval between calls is proper-neither so short that unprofitably small orders are secured nor so long that sales are lost to competitors

12. Calls per Day A standard is set for the number of calls per day. Otherwise some sales personnel make too few calls per day and some make too many calls per day and need training in how to service accounts. Standards for calls are set individually for different territories taking into account territorial differences such as customer density etc.

13. Order Call Ratio This ratio measures the effectiveness of sales personnel in securing orders. It is calculated by dividing the number of orders secured by the number of calls made. Average cost per call To emphasize the importance of making profitable calls, a target for average cost per call is set. Standards are set for each category of account. Target average cost per call standards are used to reduce the call frequency on accounts responsible for small orders.

14. Average Order Size Average Order Size standards along with average cost per call standards are used by management to control the salespersons allocation of effort aming different accounts and increase order size obtained. Multiple Quantitative performance standards Multiple Quantitative performance standards are used by most firms per operating period.

15. Form used for Assigning Quantitative Performance Standards to Sales Personnel ASSIGNED STANDARDS OF PERFORMANCE SALES PERSON…………OPERATING PERIOD……… 1 Sales during period……………………. (Quota:$........) Standard: Meet or exceed quota 2 New accounts obtained during period…………………… Standard: 5 per period 3 Sales to new accounts during period……………………… Standard: 10% of total sales 4 Total calls during period:………… Average calls per day:… Standard: 6 calls per day 5 Total sales meetings held:………….. Attended:………….. Standard: Attend all 6. Customers entertained during period:…… Average per week:….. Standard: 1 0r more per week

16. QUALITATIVE PERFORMANCE CRITERIA The sales personnel is rated against a detailed checklist of subjective factors as shown below. SALES PERFORMANCE ANALYSIS NAME: ______________________________DATE: ____________________ Problem Fair Average Good Superior JOB FACTORS PRODUCT KNOWLEDGE AWARENESS OF CUST. NEEDS RELATIONSHIP WITH CUSTOMER NUMBER OF SALES CALLS QUOTA PERFORMANCE SERVICE FOLLOW UP PERSONAL FACTORS PUNCTUALITY GENERAL ATTITUDE DRESS & APPEARANCE DELIGENCE COOPERATION ACCURACY ADAPTABILITY RELIABILITY Strongest Point ________________________________________________________ Weakest Point _________________________________________________________ Comments ____________________________________________________________

17. RECORDING ACTUAL PERFORMANCE. His/Her emphasis shifts to gathering performance information. Purpose of field sales report… The general purpose of all field sales report is to provide information for measuring performance.  To provide data for evaluating performance eg.  Details of accounts and prospects called upon  Number of calls made  Orders obtained  Days worked  Miles traveled  Selling expenses etc. To help sales person plan work e.g.  Planning itineraries  How to approach different customers.

18. Contd. To record customer suggestions and complaints and their reactions to new products. To gather information on competitors activities  new products  market tests  changes in promotion  changes in pricing  Changes in policy. To report changes in local business and economic conditions.

19. TYPES OF SALES FORCE REPORT Progress or Call Report: It is prepared individually for each call or cumulatively covering all calls daily or weekly. Usually the call report form records of not only calls and sales but more detailed data, such as class of customer or prospect, competitive brands handled, the strengths and activities of competitors, best time to call and future promises.

20. CALL REPORT Date_________20_____ Customer: _______________________________________________________________________ Street: __________________________________________________________________________ City: ________________________________________ State: _____________________________ Persons Contacted: ____________________________________ Title: _____________________________ ____________________________________ Title: _____________________________ TYPE OF CUSTOMERSELLING STEPS TAKEN  Road Contractor  Catalogs  Building Contractor  Movie  Water and Sewer Contractor  View Machine  Governmental Demonstration  Industrial  Service  Utility  Entertained  Mining and Quarry  Other _____________________________  Other __________________________ _____________________________ __________________________ INTERESTED IN  NEW  USED  RENTAL  Euclid  Thew  Gardener-Cenver  Pioneer  Bros.  Rogers  Dynahoe  Coastal  Other ___________ FOLLOW UP PLAN: _____________________________________________________________ Date of next call: ______________________ REMARKS: _____________________________________________________________________ ________________________________________________________________________________ Sales person: ___________________________________________________  Add to Mailing List. WHITE-HOUSTON PINK-BRANCHYELLOW SALESPERSON

21. Expense Report The purpose of this report is to control the nature and amount of salespersons expenses. It also helps the salesperson exercise self control over expenses, it also reminds him that he is under a moral obligation to keep expenses in line with reported sales.

22. WEEKLY EXPENSE REPORT CASH EXPENDITURES Name________________________ Week Ending ____________________ DateFrom/To (or place at)Meals (including self) LodgingEntertainmentMiscellaneousDaily Totals DescriptionAmount M T W T F S S Expense Item Tools for Week I Herby certify that the above expenses represent monies spent for legitimate business only. Amount to be reimburse Approval_____________________________Singed_____________________________ EXPLANATION OF ENTERTAINMENT EXPENSES Date Name persons entertainedFirmWhereNature and purposeAmount Total

23. Sales Work Plan This report helps the sales person in planning and scheduling activities and to inform management of the salespersons whereabouts. It provides the basis for evaluating the salespersons ability “to plan the work and to work the plan”.

24. Sales Work Plan XYZ Company Ltd. ProspectLocationPurpose of Contact Monday Tuesday Wednesday Thursday Friday Saturday Salesperson _______________________ Date _______________________week of __________________

25. New Business or Potential New Business Report This report informs management of accounts recently obtained and prospects who may become sources of new business. It provides data for evaluating the effectiveness of sales personnel.

26. WEEKLY ACTIVITY REPORT Sales Person _________________Week Ending ______________ Branch ________________ CustomerNew or used Make & Model Eng.SaleRental Mos Pur. Opt. Status PROSPECTS

27. Lost Sales Report This report provides information for evaluating a salespersons abilities to keep customers and to sell against competition. It points the way to needed sales training and changes in customer service policies and product improvements.

28. ORDERS PLACED CustomerNew or used Make & Model SaleRental MosRemarks

29. LOST ORDERS CustomersMachine quotedPuu.make & model Sale or rentReason

30. Report of Complaint and/or Adjustments This report provides information for analyzing complaints arising from a salespersons work, complaints by class of customer and cost of complaint adjustment. It is helpful for decisions on sales training programs and product changes.

31. CUSTOMER SERVICE REQUEST DATE ______ CUSTOMER ______________________________________________________ ADDRESS ________________________________________________________ PHONE __________________ MERCHANDISE PROBLEM REMARKS ORDER NOT FILLED  DEFECTIVE ITEM  REPAIR ITEM  WRONG ITEM SOLD  AMOUNT CHARGED IN ERROR  CREDIT/REFUND NOT ISSUED  OTHER ____________________ ___________________________ DELIVERY PROBLEMS INCORRECT ADDRESS  CUSTOMER OUT  LOST IN TRANSIT  MERCHANDISE MISSING  OTHER _______________ ______________________ DISPOSITION

32. REPORTS FROM FIELD SALES MANAGEMENT MONTHLY SALES REPORT DIVISION………………………………….MONTH………………………. 1 Sales quota Monthly quota net or exceeded? Yes ……… No………. % of quote achieved……………% 2 Sales personnel who have met or exceeded monthly quota: NamePercent …………………………………………………………. 3 Sales personnel who have not met or exceeded monthly quota: NamePercent …………………………………………………………. 4 Action taken to correct deficiencies: …………………………………………………………………………………… 5 Dates of sales meetings held during this month: ………………………………………………………………………… 6 Subjects discussed at meetings: …………………………………………………………………………………… 7 General business activity in territory: …………………………………………………………………………………… 8 Suggestions for improving products, sales, services: …………………………………………………………………………………… 9 Other comments: …………………………………………………………………………………… Sales manager……………

33. EVALUATING – COMPARING ACTUAL PERFORMANCES WITH STANDARDS Evaluating sales personnel requires judgments and deep understanding of market factors and conditions. An individual showing improvement but with still substandard performance - needs encouragement. When an individual continually fails to reach a standard, management should investigate whether the standard has been set too high.

34. TAKING ACTION-THE DYNAMIC PHASE OF CONTROL If performance and standards are in alignment the decision may be : no action needed Otherwise the three alternatives are a). adjust performance to the standards, thus increasing the degree of attainment of objectives. b). revise the policy or plan or the strategies used for their implementation c). lower or raise the objectives or the standards used in measuring their degree of attainment to make them more realistic. The actions are conditioned by the executives judgments, experience, knowledge of the situation and administrative skill.

35. Conditions Under Which Supervision is Needed Some conditions are: Sales personnel turnover rate excessive in a branch, district or other organizational unit. High turnover of accounts. Increased complaints from customers. Low ratio of orders to sales calls. Total number of calls too low or very high. Increasing ratio of selling expenses to sales in an organizational unit. Low morale, as implied by negative attitude towards company, lack of enthusiasm, signs of restlessness and job hunting.

36. WHO SHOULD SUPERVISE? Depending upon the company and its organization, sales personnel my be supervised by home office personnel, branch or district managers, or field sales supervisors. QUALIFICATION OF SALES SUPERVISORS They are selected from among the sales force They must be good teachers. They must recognize selling needs, know how to train Be patient with those who have less skills Re tactful in pointing out better ways of doing things Understand the needs and problems of both and reconcile them in the field Skilled in handling people Equipped to deal with many complex situations

37. Conclusion Effective tools for sales force supervision and control assure that sales departments objectives are reached with minimum effort. Evaluating and supervising are concerned with monitoring the balance standards and actual performance. Both are instrumental in achieving sales force control.