Controlling the Salesforce

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 Salesforce Audit

• Salesforce or sales management audit is a part of marketing audit

• A marketing or salesforce audit is a comprehensive, systematic,
diagnostic, and prescriptive tool, to be used periodically
• Purpose. To assess adequacy of process, improve performance,
recommend changes
• Evaluation process of salesforce audit. It has 3 stages. Company
management should find out:
• What happened by comparing actual performance with goals
• Why it happened by identifying factors contributing to negative
variance. Difficult and time consuming task
• What to do about it by taking corrective actions

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 Evaluation of Effectiveness of Sales Organisation
• To know “what happened”, companies analyse their sales,
costs, profits, and productivity
• Effectiveness model of a sales organisation

Sales Analysis

Effectiveness Cost Analysis

of a
Sales
Organisation Profitability Analysis

Productivity Analysis

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 Sales Analysis
• Sales analysis of a company can be done in different ways:
• Different alternatives are shown in a framework below:
National and/or international levels sales organisation
Regional level
All levels
In Sales Branch /district level
Organisation Territory level
Individual level

Total sales of the company

Sales Analysis

By type of products
Different
By type of distribution channels
Type of
Sales By type of customer classifications
By size of orders

Comparisons with sales quotas / targets

Comparisons with previous periods
Different
Comparisons with industry / competitors
Type of Comparisons within sales organisations
Analysis
Comparisons with sales forecasts
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 Sales Analysis (Continued)
• Sales analysis is done at all levels of the sales organisation
• Reasons
(1) For evaluation and control: sales analysis needed at different organisation
levels like regional, district, territory
(2) For identifying problems:
Use hierarchical sales analysis. E.G.
• Sales performance at national level below sales volume budget
• Find which regions have problems in achieving sales quotas
• Focus sales analysis of branches reporting to problematic regions
• Do sales analysis of territories under problematic branches
• Further analysis of problematic territories to be done by talking to
salespeople, customers, branch managers
• Corrective actions can then be taken to improve sales
• Extend hierarchical sales analysis to different type of sales
• Out of different type of analysis, comparisons with sales quotas are widely
used
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 Marketing Cost and Profitability Analysis
• Purpose: To measure profitability of company’s marketing
units such as territories, market segments, products,
channels, & customers
• This information helps to decide which marketing units to be
expanded, reduced, or eliminated in future.
• Procedure
• State purpose of the analysis
• Identity major functional (or activity) expenses
• Convert natural accounting expenses into functional
expenses
• Allocate functional expenses to marketing units
• Prepare profitability of marketing units, by using “full-cost
approach”, or “contribution approach”

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 Productivity Analysis

• Productivity is generally measured by ratio between output & input

• Some of the productivity ratios in sales management are:
• Sales per salesperson (used by many companies)
• Selling expenses per salesperson
• Sales calls per salesperson
• Improvement in productivity leads to increase in profitability
• Some of the methods used by firms to improve productivity
• Reducing salesforce size
• Hiring manufacturer’s reps. or agents on commission basis
• Using the internet, telemarketing, direct mail to reach customers
• Increasing sales volume substantially

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 Evaluating & Controlling Performance of Salespeople
• Purposes / objectives / importance of performance evaluation
of salespeople are:
• Mainly to find how salespeople have performed
• This information is used for other purposes, such as:
• Improving salespersons’ performance, by identifying
causes of unsatisfactory performance
• Deciding salary increments and incentive payments
• Identifying salespeople for promotion
• Determining training needs
• Motivating salespeople through recognition and reward
• Understanding strengths and weaknesses of salespeople

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 Procedure for Evaluating and Controlling
Salesforce Performance

The steps involved in the procedure are:

• Set policies on performance evaluation and control
• Decide bases of salespersons’ performance evaluation
• Establish performance standards
• Compare actual performance with the standards
• Review performance evaluation with salespeople
• Decide sales management actions and control

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 Business Ethics and Sales Management

• Sales managers and salespeople have ethical responsibilities

• Some of the ethical situations are:
• Relations with the company. EGs. Expense statements,
credit for damaged merchandise
• Relations with customers. EGs. Gifts, false information to
get business, customer entertainment
• Ethical guidelines
• A code of ethics developed by the company would be
effective if it is enforced by top management

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 Social Responsibilities
• Corporate social responsibility means distinguishing right from wrong
and doing the right
• Social responsibility is the management’s responsibility to take
decisions and actions for welfare and interests of society and the
company
• A company has following four responsibilities to its eight stakeholders:
Customers, Community, Creditors, Government, Owners, Managers,
Employees, and Suppliers, acronym: CCCGOMES
• Ethical responsibilities. Deal with fairness, equity, impartiality
• Legal responsibilities. Follow laws and regulations
• Economic responsibilities. Produce and market goods / services that
society wants, and make reasonable profits
• Voluntary responsibilities. Make social (EG philanthropic)
contributions

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 Legal Responsibilities and Sales Management
• Laws and regulations by local, state, or central governments
have impact on sales management
• Price discrimination. As per MRTP act, 1969, seller should not
discriminate prices among similar buyers (e.g. retailers)
• Price fixing. Under MRTP act, it is unlawful for suppliers to fix
prices
• Consumer protection. As per Consumer Protection Act, 1986, it
is illegal to make false or misleading claims about products /
services
• Bribes. Payment of money or giving gifts to gain a customer is
illegal under Indian Contracts Act 1872 and Sale of Goods act,
1930. Sales managers must take responsibility that laws are not
violated
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