How to Evaluate Sales Performance

by David Stewart; Updated September 26, 2017
Businesspeople in a meeting

An objective assessment that takes into account rectitude, attitude, aptitude and ability to deliver results will help evaluate sales performance fairly. Different methods have to be used to evaluate sales performance of individuals and teams. It is also important that ample opportunities exist to display sales prowess. It is the responsibility of management to provide the sales executive/team with requisite products, tools, territory and opportunity. Evaluation of sales performance should be done strictly on merit and in a transparent manner.

Step 1

Decide on a timeframe to evaluate sales performance, i.e. monthly, quarterly or annually. Do not make impetuous decisions without giving sufficient time for the sales executive/team to perform.

Step 2

Choose the determinants to evaluate sales performance. You should take into account current market trends, product type and customer preferences while choosing determinants. Sales volume, profit margins, ability to meet targets, number of new accounts added, retention of existing accounts, customer satisfaction, initiative, adaptability, and leadership are some of the factors to consider while evaluating sales executive/team performance.

Step 3

Ensure that your sales executive/team makes a profitable sale. Give equal importance to quantity and quality of business generated as sometimes the business might suffer losses even though sales executives/teams exceed sales targets. This could be due to reduced markups to outdo competition. Healthy profit margins are essential for sustenance and future growth of any business.

Step 4

Conduct periodic product reviews with your sales team and customers. This will help you learn about any improvements to be made. It would be unfair to blame the sales team when your product is not up to the mark. You will get to know the customer’s opinion and the rapport they share with your sales executive/team during the review.

Step 5

Take the opinion of colleagues, superiors and customers while rating the appearance, attitude, motivation, cooperation level and team spirit of a sales executive. It would be encouraging to the sales team if you accompany them occasionally on their trips to an existing customer and/or prospect. You can get a first-hand impression of the abilities of various individuals in the sales team.

Step 6

Assign grades that indicate the performance level and also mention areas where there is room for improvement. You can have grades like 1, 2, 3 and 4 with each denoting various levels of performance like bad, average, good and excellent. The grading scale has to be objective and transparent, so there are no confusions as to the results.

Tips

  • Give monetary incentives, offer promotions and shower praise on the top performers.

    Prejudice and bias should not be allowed to influence evaluation of sales performance.

Warnings

  • Failure to evaluate sales performance will dent an organization’s ability to identify trends and respond accordingly.

About the Author

Hailing out of Pittsburgh, Pa., David Stewart has been writing articles since 2004, specializing in consumer-oriented pieces. He holds an associate degree in specialized technology from the Pittsburgh Technical Institute.

Photo Credits

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