A Sales Evaluation Program is a systematic process used by an organization to measure, analyze, and improve the performance of the sales force.
It ensures that:
Salespersons are meeting their targets
Company resources are used efficiently
Sales activities are aligned with business goals
Training, motivation, and compensation decisions are based on facts
Simple Definition:
A Sales Evaluation Program is a structured method to monitor, assess, and improve the performance of salespeople through standards, reports, and corrective actions.
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⭐ 2. Need for a Sales Evaluation Program
1. To measure achievement of sales targets
2. To determine effectiveness of sales force
3. To identify training needs
4. To plan compensation and promotion
5. To improve customer satisfaction
6. To evaluate expenses vs. profitability
7. To control and guide sales activities
8. To remove inefficiencies and improve productivity
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⭐ 3. Principles of Sales Evaluation
To make evaluation fair and effective, certain principles must be followed:
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✔ 1. Objectivity
Evaluation must be based on clear numbers, facts, and measurable data—not personal bias.
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✔ 2. Standardization
Use uniform methods, standards, and forms for evaluating all salespeople.
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✔ 3. Comprehensiveness
Consider all aspects of performance:
Sales volume
Profitability
Customer satisfaction
Territory management
Sales activities
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✔ 4. Timeliness
Evaluation must be done regularly (monthly/quarterly/yearly).
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✔ 5. Comparability
Salesperson performance should be compared with:
Past performance
Territory potential
Team average
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✔ 6. Transparency
Salespeople must clearly understand:
What is being measured
Why it is being measured
The expected standards
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✔ 7. Corrective Feedback Approach
Evaluation must guide improvement, not punish the salesperson.
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✔ 8. Flexibility
The system should be adaptable to:
Market changes
Product lifecycle
Economic conditions
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⭐ 4. Performance Standards in Sales Evaluation
Performance Standards = Pre-defined benchmarks used to measure sales performance.
Here are the major standards:
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A. Quantitative Performance Standards
✔ 1. Sales Volume
Units sold or rupees generated.
✔ 2. Profit Contribution
Gross profit & net profit from each salesperson.
✔ 3. Market Share Achieved
Percent share of a salesperson in territory.
✔ 4. Expense Control Standards
Travel expenses
Client entertainment expenses
✔ 5. New Customer Acquisition
Number of new accounts opened.
✔ 6. Collection Efficiency
Amount collected vs. billing.
✔ 7. Order Size & Frequency
Average bill amount per customer.
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B. Qualitative Performance Standards
✔ 1. Customer Relationship Quality
Trust, loyalty, service quality.
✔ 2. Product Knowledge
Understanding features and benefits.
✔ 3. Territory Management
Planning, coverage, daily route schedules.
✔ 4. Communication Skills
Presentation and closing skills.
✔ 5. Teamwork & Discipline
Coordination with warehouse, marketing, and dealers.
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⭐ 5. Process of Sales Evaluation (Step-by-Step)
A systematic sales evaluation program follows 7 steps:
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STEP 1: Establish Performance Standards
Define clear measurable standards such as:
Sales quotas
Profit margin targets
Customer calls per day
New dealer creation
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STEP 2: Collect Performance Data
Data sources include:
Sales reports
CRM records
Customer feedback
Distributor sales
Expense reports
Market surveys
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STEP 3: Compare Actual Performance with Standards
Identify:
Over-achievers
Under-performers
Average performers
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STEP 4: Identify Reasons for Variance
Find the cause of performance gaps:
Lack of training
Poor territory coverage
Low motivation
Competition
Product issues
Personal issues
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STEP 5: Take Corrective Measures
Corrective actions may include:
Extra training
Coaching
Territory realignment
Motivation programs
Changes in incentive plan
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STEP 6: Communicate Feedback
Provide clear feedback to salespeople:
What they are doing well
What improvement is needed
How they will be supported
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STEP 7: Follow-up and Review
Continuous review ensures:
Better performance
Improved morale
Achievement of company goals
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⭐ 6. Activities of Sales Force Evaluated
Companies evaluate the following activities of salespeople:
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1. Sales Calls
Number of calls made
Quality of interaction
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2. Time Management
Time spent in field
Time vs. sales output ratio
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3. Customer Servicing
Complaint handling
Delivery coordination
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4. Prospecting
Number of new leads generated
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5. Sales Presentation Skills
Ability to explain, convince, negotiate.
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6. Product Knowledge
Understanding features, competitors, benefits.
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7. Territory Management
Visit planning
Coverage of all retail outlets
Maintaining route charts
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8. Reporting and Documentation
Timely submission of:
Sales reports
CRM updates
Expense statements
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9. Teamwork & Communication
Coordination with:
Marketing
Warehouse
Distributor
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10. Customer Satisfaction
Measured through:
Ratings
Repeat orders
Complaints
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⭐ 7. Case Studies & Examples
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Case Study 1: Hindustan Unilever Ltd (HUL)
HUL regularly evaluates its 3,500+ sales team members.
Key metrics used:
Sales volume vs. quota
Number of retail outlets covered
New retailer onboarding
Distributor sales growth
Result:
Sales increased by 22% annually in rural markets due to structured evaluation and corrections.
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Case Study 2: Maruti Suzuki Dealership Sales Team
Maruti evaluates sales executives using:
Test drive conversions
Customer satisfaction index
Upselling success
Inquiry follow-ups
Outcome:
Sales training needs were accurately identified → improvement of closing ratio by 18%.
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Case Study 3: SHOKESH Enterprises Sales Team (Example)
For Pujan Samagri distribution, SHOKESH introduced:
Evaluation Metrics:
✔ Monthly target vs. achievement
✔ Visits to retailers
✔ Display management in stores
✔ Customer feedback
Result:
Retail coverage improved by 40% in 6 months.
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⭐ 8. Summary Points (Short Notes)
Sales evaluation program = systematic process to measure sales performance
Principles include objectivity, standardization, transparency, timeliness
