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Evaluating Sales Performance

Measuring sales effectiveness is a necessary part of any business. Sales effectiveness can be measured in a number of ways. Obvious indicators are revenue and profitability – critical factors to immediate success. However, when evaluating long term success other factors can be just as critical. First and foremost a sales person must ask for business. And ultimately they must earn the business. A sales person can take orders and process them or they can ensure additional ongoing business is earned. Evaluating a sales person from this perspective is based on a more long term view of business success.

Appointments Scheduled

Who has ever left the dentist without having their next appointment scheduled? Shouldn’t an auto repair service business employ the same practice? When the vehicle is delivered to the customer and the repair order is closed out, the appointment for the next scheduled preventive maintenance service can be scheduled in advance. If the sales person is effective at this the shop will have a good amount of business booked in advance. Sales effectiveness can be measured by the number of visits versus the number of advance appointments booked within a given time period.

Recommendations Sold or Lost

Additional services recommended by the shop are an important indicator of sales effectiveness. Recommendations sold or lost can have a big impact on sales. When a vehicle is brought in for service there are usually a number of potential services that are identified as the result of inspection. These services can be sold or deferred to a later time. The sales person should be able to sell a certain percentage of these. So a measurement of sales effectiveness can be based on the value of recommendations sold versus those recommended within a given time period.

Customer Retention

One of the biggest impacts on customer retention is the sales relationship. Customers will not be customers very long if they don’t have a good relationship with their direct point of contact. Assuming that good quality technical service is provided, the most important aspect of service to the customer is the interaction with the front line representatives of the business. Determining why customers don’t return is necessary to this evaluation. A certain amount of customer attrition should be expected in any business but sales relationships should not be a major contributing factor. The portion of customer attrition due to poor sales relationships versus the overall attrition rate is an important component of measuring sales performance.

Overall Performance Evaluation

Measuring sales effectiveness should take into consideration a number of factors. Revenue and profit are always important. Contributions to long term objectives should also be considered. A sales person not only has an immediate impact on the bottom line but can also affect future sales and growth possibilities.

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