As the cost of maintaining a sales force increases, sales managers must give more attention to measuring productivity. The goal is to analyze the profitability of each salesperson’s sales volume. This task is complicated because sales territories, customers, and business conditions vary.

The problem of measuring sales force productivity is more complicated than it might appear at first glance. In most cases, sales volume alone does not tell you how much profit or loss you are making on the sales of each member of the sales force. A small manufacturer was losing money until he analyzed the profitability of sales generated by each person. He found that one salesperson created a loss on almost every order. This salesperson was concentrating on a market that had become so competitive that she had to reduce the markup to make sales.

Some sales managers view the frequency of calls as an indicator of success. This information is helpful only when compared with the profit earned on each account. The number of calls made on an account should bear some relationship to the sales and profit potential of that account. In some cases, it is possible to maintain small accounts without making frequent personal calls.

To compare a salesperson’s current productivity with the past also can be misleading. Changes in products, prices, competition, and assignments can make comparisons with the past unfair—sometimes to the salesperson, sometimes to the company. It is better to measure cumulative quarterly, semiannual, or annual results in relation to established goals.

Some sales managers use performance evaluation criteria that communicate to the sales force which elements of their jobs are most important and how they are doing in each area. Evaluating salespeople involves defining the bases on which they are to be evaluated, developing performance standards to determine the acceptable level of performance desired on each base, monitoring actual performance, and giving salespeople feedback on their performance.45 Two of the most common criteria for assessing the productivity of salespeople are quantitative criteria and qualitative criteria.

In most cases, it is best to emphasize assessment criteria that can be expressed in numbers (quantitative). The preceding quantitative items are especially significant when accompanied by target dates. For example, you might assess the number of new accounts opened during a six-month period. Of course, a sales manager should not ignore the other criteria listed here. The other items can affect a salesperson’s productivity, and you do have to make judgments in these areas.

Some sales managers ask their salespeople to complete a self-evaluation as part of the overall evaluation process. Many salespeople believe that self-evaluation contributes to their personal development.46