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CHAPTER 15

CHAPTER 15. Evaluating Sales force Performance. THE SALES AUDIT. ...a comprehensive, periodic review and evaluation of the sales function. THE SALES AUDIT. The audit includes an appraisal of objectives personnel tactics. STEPS IN THE SALES AUDIT. Find out what happened

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CHAPTER 15

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  1. CHAPTER 15 Evaluating Sales force Performance

  2. THE SALES AUDIT • ...a comprehensive, periodic review and evaluation of the sales function

  3. THE SALES AUDIT • The audit includes an appraisal of • objectives • personnel • tactics

  4. STEPS IN THE SALES AUDIT • Find out what happened • Find out why it happened • Decide what to do about it

  5. EVALUATING EFFECTIVENESS • Sales Volume Analysis • Cost Analysis • Profitability Analysis • Productivity Analysis

  6. SALES VOLUME ANALYSIS • A study of the net sales section of the profit and loss statement. • Examine sales by product lines, territories, key accounts, and general classes of customers.

  7. SALES VOLUME ANALYSIS • Two approaches: • Hierarchical Sales Analysis • Effectiveness Analysis

  8. HIERARCHICAL SALES ANALYSIS • A multistage analysis which proceeds from one sales organization level to the next by • identifying major deviations • investigating these in more detail at the next lower level.

  9. Example of Hierarchical Sales Analysis

  10. EFFECTIVENESS INDEX • Examine territory performance relative to potential

  11. STEPS IN AN EFFECTIVENESS ANALYSIS • Select a market index that indicates what percentage of total sales should be obtained from each sales territory.

  12. STEPS IN AN EFFECTIVENESS ANALYSIS • Determine the company’s actual total sales in dollars or units during the period being studied.

  13. STEPS IN AN EFFECTIVENESS ANALYSIS • Multiply the territorial index by the total sales figure to determine the goal in each district.

  14. STEPS IN AN EFFECTIVENESS ANALYSIS • Compare actual regional sales with the regional goals to see how much variation has occurred.

  15. Example Effectiveness Analysis

  16. HIERARCHICAL AND EFFECTIVENESS ANALYSIS • Territories • Different products • Sales by accounts • Channels of distribution

  17. MARKETING COST ANALYSIS • A study of marketing expenses to determine profitability of marketing segments in the firm. • Two Approaches • Variance Analysis • Percentage of Sales

  18. VARIANCE ANALYSIS • Variance represents the difference between actual costs and budgeted costs. • High variances should be examined further.

  19. PERCENTAGE OF SALES • Examines costs as a percentage of sales.

  20. PROFITABILITY ANALYSIS • Return on Assets Managed (ROAM)

  21. RETURN ON ASSETS MANAGED (ROAM) • Measures how productively the assets in each segment of the business have been employed. ROAM= Profit contribution/Assets Managed

  22. ROAM Example

  23. PRODUCTIVITY ANALYSIS • Additional productivity analysis may be required to get a fuller picture of organizational effectiveness. • Measured in terms of inputs and outputs.

  24. Example Productivity Analysis

  25. WHAT IS DONE WITH THIS INFORMATION? • Adjust territorial boundaries • Adjust product line • Change classes of customers

  26. FROM THE TEXT • Read everything except Residual Income Analysis on pages 724 to 726.

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