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LERRARY '

THESls

This is to certify that the

thesis entitled

AN EXPLORATORY INVESTIGATION OF
THE USE OF SALES EFFORT MEASURES
TO EVALUATE‘ MISSIONARY SALES
FORCE PERFORMANCE

presented by

Bruce Buskirk

has been accepted towards fulfillment
of the requirements for

Ph .1) degree in Marketing

 

 

 

Major professor

Date W

0.7639 MS U is an Affirmative Action/Equal Opportunity Institution

 

 

 

BEIURNING MATERIALS:
IVIESI_J Place in bodk drop to

remove this checkout from
w your record. FINES will

 

be charged if book is

 

returned after the date
stamped below.

 

 

 

 

 

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fixigjfig ”'5' “1% 3t UHE

 

 

 

 

 

 

 

 

AN EXPLORATORY INVESTIGATION OF THE USE
OF SALES EFFORT MEASURES TO EVALUATE
MISSIONARY SALES FORCE PERFORMANCE

by

Bruce Buskirk

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Marketing and Transportation Administration

1983

ABSTRACT
AN EXPLORATORY INVESTIGATION OF THE USE

OF SALES EFFORT MEASURES TO EVALUATE
MISSIONARY SALES FORCE PERFORMANCE

BY

Bruce Buskirk

Missionary sales force's represent a special
problem in terms of performance evaluation. Since the
missionary sales force may not have the objective of
maximizing sales volume in the present time period,
other methods of evaluation are required. Traditionally,
the subjective judgement of sales management has been the
primary tool of evaluation.

This study examines the use of the analysis of
the distribution of sales efforts as an aid to sales
performance evaluation. Specifically, what product lines
were shown to each customer class. This information was
generated and then supplied to a specific sales force
under investigation.

It was found that the use of sales effort measures
can supplement traditional subjective sales performance
evaluations. Further, it was found that the generation
of sales effort measures provided management with a

method of setting goals and measuring compliance.

This research suggests that the use of sales
efforts to measure performance is under utilized across
many sales forces. Sales efforts are felt to be a leading
indicator of sales results. For the missionary sales
force, it is concluded that sales efforts and sales

results are synonymous.

To Sherry

ii

ACKNOWLEDGMENTS

I wish to express my gratitude to my wife, Sherry,
and our sons, Brian and Robert, for supporting me during
the last five years of work that culminated in this
dissertation. Their encouragement of my efforts is
greatly appreciated.

I would like to thank the members of my committee,
Dr. M. Bixby Cooper, Dr. Sam Carter, and Dr. Donald Taylor
for their constructive input toward the realization of
this dissertation.

This research would not have been possible without
the invaluable assistance and insights of Dr. William
Shanklin and Dr. John Ryan. It is impossible to express
my appreciation here for their help.

Since this task is not complete until the paper-
work is done, I would like to express appreciation to
M. Rose Poster of Akron, Ohio, for typing this disserta-

tion into its final form.

iii

TABLE OF CONTENTS

LIST OF TABLES . . . . . . . . . . . . . . . .
LIST OF FIGURES . . . . . . . . . . . . . .
CHAPTER
I. THE PROBLEM . . . . . . . . . . . . .
Introduction . . . . . . . . . . . .
The Problem . . . . . . . . . . .

Scope of Sales Force Evaluation
Methodologies . . . . . . . . . .

Research Questions . . . . . . . . .
Limitations . . . . . . . . . . .
Contribution . . . . . . . . . . .
II. REVIEW OF RELEVANT LITERATURE . . . .
Introduction . . . . . . . . . . .

Subjective Measures of Salesperson
Performance 0 O O O O O I O O O 0

Objective Measures of Salesperson
Performance . . . . . . . . . . .

Objective Analysis of Sales Force
Sales Results in Salesperson
Performance Evaluation . . . . .
Sales Performance Evaluation
by Margins . . . . . . . . .
Compensation, Incentives, and the
Evaluation of Salespeople . . .
Territorial Sales Performance . .

Summary of Literature . . . . . . .
iv

Page
vi

viii

l4
l4
l7
19

21
23

28

CHAPTER Page
III. RESEARCH DESIGN . . . . . . . . . . . . . . 32
Introduction . . . . . . . . . . . . . . . 32
Approach to the Research Problem . . . . . 32
Research Goals . . . . . . . . . . . . . . 41

Methodology . . . . . . . . . . . . . . . 42

Application . . . . . . . . . . . . . . 43
Preliminary Investigation . . . . . . . 45
Development of the Instrument . . . . . 45
Form of Analysis . . . . . . . . 46

Limitations of Methodology . . . . . . . 47
IV. FINDINGS . . . . . . . . . . . . . . . . . . 49
Salesperson Evaluation Process . . . . . . 49
Results of Sales Force Survey . . . . . . 52
Distribution and Response . . . . . . . 52
Reaction of Upper Management

to Findings . . . . . . . . . . . . . 72

Findings With Respect to Research
Questions . . . . . . . . . . . . . . 75
V. SUMMARY AND IMPLICATIONS . . . . . . . . . . 77
Contribution of Research . . . . . . . . . 80
Limitations of the Study . . . . . . . . . 81
Further Study Needed . . . . . . . . . . . 82
Conclusion . . . . . . . . . . . . . . . . 83

APPENDICES O O C O O O O O O O C O O O O O O O O O O 85

REFERENCES . . . . . . . . . . . . . . . . . . . . . 105

TABLE

1.

LIST OF TABLES

Quantitative Measures of Sales or Results
and Sales Efforts . . . . . . . . . . .

Qualitative Measures for Subjective
Evaluation . . . . . . . . . . . . . .

Regional Sales: Product Lines by
Customer Class (as a percent
of total sales calls) . . . . . . .

Sales Representative (X): Product Lines
by Customer Class (as a percent of
total sales calls) . . . . . . . . . .

Percent Difference from Region by
Salesrepresentative (X): Product
Lines by Customer Class (as a
percent of total sales calls) . . .

Distribution of Actual Sales Calls from
Call Reports by Customer Class and
Product Line (as a percent of total
sales calls) . . . . . . . . . . . . .

Salespersons Perceptions of Sales Call
Distribution by Customer Class and
Product Line (as a percent of total
sales calls) . . . . . . . . . . . . .

Differences of Perceived and Actual
Sales Call Patterns (Table 5 —
Table 4) (as a percent of total
sales calls) . . . . . . . . . . .

Regional Managers Perceptions of Sales
Call Distribution by Customer Class
and Product Line (as a percent of
total sales calls) . . . . . . . . . .

vi

Page

36

37

38

53

55

56

59

TABLE

10.

11.

12.

13.

14.

Differences of Regional Managers Perceptions
and the Distribution of Calls by Customer
Class and Product Line as Reported by Call
Reports (Table 7 Minus Table 4) (as a
percent of total sales calls) . . . . . .

Number of Salespeople Whose Allocation of
Sales Calls by Customer and Product
Categories were Lower, or Higher Than
Specified by Their Regional Sales-
manager . . . . . . . . . . . . . . . .

Number of Regional Managers Whose Regions'
Averages do not Meet Their Own
Standards . . . . . . . . . . . . . . .

Regions Not Within Area Manager's
TOIeranceS O I O 0 O O O O O I O O O 0

Number of Areas Not Within the Tolerances
of the Sales Executive . . . . . . . . .

vii

Page

60

63

66

67

69

TABLE

1.

LIST OF TABLES

Page

Quantitative Measures of Sales or Results
and Sales Efforts . . . . . . . . . . . . 4

Qualitative Measures for Subjective
Evaluation . . . . . . . . . . . . . . . 9

Regional Sales: Product Lines by
Customer Class (as a percent
of total sales calls) . . . . . . . . . . 36

Sales Representative (X): Product Lines
by Customer Class (as a percent of
total sales calls) . . . . . . . . . . . 37

Percent Difference from Region by
Salesrepresentative (X): Product
Lines by Customer Class (as a
percent of total sales calls) . . . . . . 38

Distribution of Actual Sales Calls from
Call Reports by Customer Class and
Product Line (as a percent of total
sales calls) . . . . . . . . . . . . . . 53

Salespersons Perceptions of Sales Call
Distribution by Customer Class and
Product Line (as a percent of total
sales calls) . . . . . . . . . . . . . . 55

Differences of Perceived and Actual
Sales Call Patterns (Table 5 -
Table 4) (as a percent of total
sales calls) . . . . . . . . . . . . . . 56

Regional Managers Perceptions of Sales
Call Distribution by Customer Class
and Product Line (as a percent of
total sales calls) . . . . . . . . . . . 59

vii

LIST OF FIGURES

FIGURE Page

1. A Conceptual Model of Determinants of
Sales Territory Performance . . . . . . . 34

viii

CHAPTER I

THE PROBLEM

Introduction

 

American free enterprise presently expends about
165 billion dollars to employ 3.8 million sales people
other than those selling goods at retail (U. S. Census,
1981). This expenditure represents nearly 8% of the
American gross national product, nearly three times the
expenditures on all forms of advertising (Sales Manage-
ment, 1981).

The nature of sales jobs is quite disperse.
However, Schewe and Smith (1981) divided sales positions
into seven categories: merchandise deliveries, inside
order takers, outside order takers, missionary sales-
people, sales engineers, tangible product sellers, and

intangible product sellers.

The Problem

 

The function of managing 3.8 million sales peOple,
for the most part working without direct supervision, is
one of immense proportion. Many firms rely heavily on

sales results in evaluating salesperson performance. Many

2

firms even base compensation upon a pr0portion of dollar
sales volume. This practice reduces the need for super-
vision (Stanton & Buskirk, 1983). However, for one class
Of salesperson, this method of evaluation based upon sales
volume results is difficult to apply. The missionary
salesperson, by definition, is not to solicit orders.

Missionary sales people are not expected or

permitted to solicit orders. Rather, they make

calls to promote goodwill toward the marketing

organization and to help customers arrange their

own promotional activities. On receiving orders

from customers, these sales people relay them to

the distributor. (Shewe & Smith, 1981, p. 519)

Management of a missionary sales force represents
a special type of problem in terms of performance evalua-
tion. How should salespeople be evaluated when sales in
the present time period are not their primary goal?
Further, how can missionary salespeople be evaluated when
channel intermediaries obfuscate measures of sales volume
performance?

Welch and Lapp (1983) defined sales force perform-
ance evaluation as involving "a quantitative and qualita-
tive assessment of deviation from performance standards
with a view toward development of programs for improvement
of salespeople" (p. 220). Welch and Lapp viewed sales
force performance evaluation to be "a composite of the
performance of individual sales people" (p. 229). Hence,

sales force performance evaluation can be accomplished

through the evaluation of individual salespeople.

3

Anderson and Hair (1983) believed that successful
sales organizations usually employ a mixture of quantita-
tive and qualitative performance evaluation standards.
'Qualitative standards tend to affect sales directly and
can be measured directly, while qualitative performance
criteria have a more indirect impact on sales and, there-
fore, must be evaluated on a subjective basis.

Anderson and Hair further divided both quantita-
tive and qualitative categories. The quantitative cate-
gory is divided into sales inputs or efforts and sales
outputs or results. "Sales inputs are the efforts of the
salespeople, while sales outputs are the results of their
efforts" (p. 489). Table 1 presents the activities that
Anderson and Hair believed belong in the sales outputs or
results category and in the sales inputs or efforts cate-
gory. Anderson and Hair did not use either the input/out-
put terminology or the efforts/results individually; the
authors used both terms. In order to avoid redundance of
terminology, and the confusion of changing terminology,
this study will use the term "sales efforts" to represent
"sales inputs" and "sales results" to represent "sales out-
puts" respectively. Further, the majority of literature on
the subject appears to use the ”sales efforts" and "sales
results" terminology. This study also uses the terms
"orders," "sales volume," "margins," ”customer accounts,"
"sales calls,” ”selling expenses," and "customer service"

as presented by Anderson and Hair (see Table 1). This

Table 1

Quantitative Measures of Sales or
Results and Sales Efforts

 

Sales-Force Performance Evaluation

 

Quantitative Measures

 

Sales Outputs (Results)

Sales Inputs (Efforts)

 

Orders:
Number of orders obtained
Average order size (units or

dollars)

Batting average (order/calls
ratio)

Number of orders canceled by
customers

Sales volume:
Dollar sales volume
Unit sales volume
By customer type
By product category
Translated into market share
Percent of sales quota achieved

Margins:
Gross margin
Net profit
By customer type
By product category

Customer accounts:

Number of new accounts

Number of lost accounts

Percent of accounts sold

Number of overdue accounts

Dollar amount of accounts
receivable

Collections made of accounts
receivable

Sales calls:

Number made on current customers

Number made on potential new
accounts

Average time spent per call

Number of sales presentations

Selling time versus nonselling
time

Call-frequency ratio per customer

type

Selling expenses:

Average per sales call

As percent of sales volume

As percent of sales quota

By customer type

By product category
Direct-selling expense ratios
Indirect-selling expense ratios

Customer service:

Number of service calls

Delivery set up

Displays set up

Delivery cost per unit sold

Months of inventory held by
customer type

Number of customer complaints

Percent of goods returned

 

(Anderson and Hair, 1983, p. 488)

5
study will, however, use the terms "subjective" and
"objective" as the act of evaluating qualitative and

quantitative measures of performance respectively.

Sc0pe of Sales Force Evaluation

Methodologies

 

Tonning (1964) provided one of the few compre-
hensive reviews of sales force evaluation techniques.
Tonning divided evaluation techniques into subjective
and objective methods. Subjective methods are subdivided
into Opinion and merit ranking methods. Objective method—
ologies are discussed by Tonning in a case by case manner.
Tonning did not differentiate objective measures of sales
force effort from those of sales force results. Henry
(1975), however, did make this distinction labeling the
former salesperson effort variables and the latter sales
results variables. Wotruba (1971) expanded this distinc-
tion, and in discussing salesperson performance evalua-
tion, devotes one chapter to sales results, and one to the

analysis of salesperson efforts.

Research Questions

 

This study investigates the objective evaluation
of a sales force based on sales efforts, specifically
sales calls, and how these objective measures of effort
are used in conjunction with subjective measures of

efforts and results. Subjective evaluation techniques

6
will be investigated with the intent of establishing the
interaction of objective evaluation of sales force efforts
with subjective measures.

Research questions of interest are: (a) What
measures of sales force effort are useful to management of
missionary sales forces? (b) How are measures of sales-
person effort used in managing a missionary sales force?
(c) What is the relationship of objective measures of
sales effort to subjective and objective measures of per-

formance for a missionary sales force?

Limitations

 

This study will examine the missionary sales
force of one firm. Any unique characteristics of this
missionary sales force will need to be allowed for before
the application of information gained. Exhaustive iden-
tification of all possible solutions to the research
questions is prevented by the vast difference in the
characteristics of products sold, customers served, and
managerial styles of the many sales forces in existence.

Data gathering and analysis will be restricted
by the completeness and accuracy of existing company
records. The lack of full company compliance to the
request for records further compounds this problem.

Sales effort variables to be studied will need

to be limited. However, even with a limited number of

7
variables under investigation, some response error can
be expected.

The study of a single sales force yields little
‘insight about the diversity of sales forces. Variables,
such as method of compensation, could strongly influence
applicability of findings.

No quantitative measures of usefulness, or poten-
tial dollar savings can be generated. Many effects may
be long run, and as such not captured in the period of

this study.

Contribution

 

The contribution of this study will be twofold.
Firstly, this study will provide marketers insight of
how objective measures of salesperson effort can be used
to evaluate sales performance without results oriented
measures interacting in the study. Secondly, the study
will demonstrate how the management and salespeople of
missionary sales force can use sales effort analysis to

better evaluate sales performance.

CHAPTER II

REVIEW OF RELEVANT LITERATURE

Introduction

 

This chapter reviews salesperson performance
literature along the twofold taxonomical definition
suggested by Tonning (1964). The first section of this
chapter reviews literature relevant to the subjective,
or qualitative, evaluation of sales personnel. The
second section reviews objective, or quantitative,
methodologies of salesperson effort evaluation. Addi—
tionally, a third section reviews sales analysis tech-

niques used in conjunction with other techniques.

Subjective Measures of Salesperson

 

Performance

 

Storholm (1983) stated that "the subjective
method, is based on the evaluation of the salesperson on
the basis of certain qualities, traits, or behavior deemed
necessary for effective performance" (p. 255). Anderson
and Hair (1983) expanded upon Storholm's definition by
categorizing qualitative measures of performance (see

Table 2) into Sales-Related Activities, Selling Skills,

Table 2

Qualitative Measures for Subjective Evaluation

 

Qualitative Measures

 

Sales-Related Activities

Territory management--sales call preparation, scheduling, routing,
and time utilization.

Marketing intelligence (new product ideas, competitive activities,
change in customer preferences)

Follow-ups (use of promotional brochures and correspondence with
current and potential accounts)

Customer relations

Report preparation and timely submission

Selling Skills
Product knowledge
Customer knowledge
Knowledge of the company and its policies
Knowledge of competitors' products and sales strategies
Use of marketing and technical backup teams
Understanding of selling techniques
Execution of selling techniques
Quality of sales presentations
Communication skills
Customer feedback (positive and negative)

Personal Characteristics
Cooperation
Human relations
Enthusiasm
Motivation
Judgment
Care of company property
Appearance
Self-improvement efforts
Patience
Punctuality
Initiative
Resourcefullness
Health
Sales-management potential
Ethical-moral behavior

 

(Anderson and Hair, 1983, p.489)

10

and Personal Characteristics. Each category is further
defined by the use of numerous examples of measures in
each category.

Anderson and Hair (1983) found that today's sub-
jective appraisal techniques are about the same as those
that have been used for years. They divide subjective
evaluation of sales performance techniques into narratives
and rating scales categories.

Tonning (1964) outlined programs for the subjec-
tive appraisal of salespeople as having five steps: (a)
job description, (b) a planned assessment program, (c)
educating and training salespeople, (d) formalizing
sales goals, and (e) maintaining a program in force.

Tonning (1964) believed the job description is
influenced by four groups and listed the groups in order
of the value of their input: (a) salespeople, (b) sales
supervisor, (c) staff observer, and (d) customers.
Tonning further outlined the information required for
effective performance evaluation:

1. Product knowledge requirements of the job

2. Technical aspects and requirements

3. Difficulties and demands of the job

4. Company Operating procedures

a. Sales policies
b. Credit and collection
c. Traffic or delivery scheduling

d. Compensation--basis and timing

11

e. Special accounts treatment
f. Miscellaneous and routinized practices
5. Levels of selling ability requirements of
the job
a. Service selling
b. Negotiation selling
c. Creative selling
6. Traits and attributes to be appraised
a. Plus qualities
b. Negative qualities (p. 22)

Tonning (1964), in conjunction with the Sales
Executive Association Panel on Evaluating Salesmen's
Performance, concluded that three elements are critical
to a program for evaluation:

(1) know what you expect a salesman to do; (2)
determine the importance of each part of his
job: (3) set up a scoring system that will
reflect a degree of effort put forth in each
point in relation to its importance. (p. 34)

Easton (1966) outlined many problems of evaluating
salespeople by salespeOple by sales volume alone. Accord-
ing to Easton, some of the side effects of stressing sales
volume as the soles criterion include the following: (a)
salespeople press for price reduction, (b) false informa-
tion about competition prices coming from field sales-
peOple, (c) salespeople push for credit to unworthy cus-
tomers, (d) decreased efforts to open new accounts, (e)

salespeOple near the factory manage to obtain items in

short supply, (f) difficulty arises in introducing new

12

products, (9) less active accounts deteriorate, and (h)
salespeople resist any suggestion that does not have an
immediate return in sales volume.

McGregor (1957) suggested that salespeople should
evaluate their own performance and come to a mutual con-
sensus with their sales manager. Major problems with this
methodology arise, however, when the self-evaluations are
correlated with pay. Further, McGregor fears that subjec-
tive evaluation of salespeople, in multiple categories
often results in unreliability due to the effect that
salespeople who rate highly on some criteria will also
tend to be rated higher on others.

Cocanougher and Ivancevich (1978) found weaknesses
in the traditional system for evaluating salespeople.

It is widely recognized that there are many
things inherently wrong with most of the
traditional performance appraisal systems in
use. In most cases the appraiser is asked to
rate a number of attributes on a five- or
seven-point scale or is directed to comment
on an Open ended form. Nowhere in these
rating or open-ended comment systems is there
a method or section which asks about how the
person is to achieve the goals he or she is
charged with accomplishing. (p. 88)

Futrell (1981) warned of the dangers of using
subjective evaluations of salespeople. These dangers
include (a) the "Halo effect" when sales managers let one
factor influence their rating of other factors, (b) the

tendency of sales managers to rate the majority of sales—

people the same, (c) different sales managers having

13

different standards, interpersonal bias, recent perform-
ance bias, and (d) inadequate sampling of job activities.

The use of the Behaviorally Anchored Rating Scale
(BARS) is proposed as a solution to many of the problems
found with subjective ranking systems of salesperson per-
formance evaluation. Using this system each factor to be
rated on a numeric scale basis will have each point of the
scale defined in terms of the behaviors exhibited by a
salesperson deserving each of the ratings. This is
thought to reduce discrepancies in ratings between sales
managers.

Kirchner (1960) and Taylor and Hilton (1960) both
found significant correlation between subjective evalua-
tions of salespeople and sales achieved by the sales-
person. Both studies, however, indicate that proper
criteria for subjective evaluations must be deve10ped
for this correlation to exist.

Extensive research indicates that sales managers
tend to rely on subjective techniques of evaluation of
salesperson performance in the face of more accurate
objective techniques (Teas & Horrell, 1981; Tell, 1980,
Sloma, 1980; Wotruba & Mangone, 1979: Futrell, Swan, &
Todd, 1976; Patz, 1975: Darden & French, 1970). However,
none of these researchers attempted to balance the addi-
tional costs of the objective evaluation they suggest

with the benefits to be obtained. Subjective evaluation

l4

techniques are often accomplished in less time and at a
lower cost than objective measures of the same informa-

tion.

Objective Measures of Salesperson

Performance

Objective Analysis

of Sales Force

 

Wotruba (1971) believed that the analysis of sales
efforts are often a superior means of evaluating sales-
person performance than analysis of the salesperson's
sales results. Wotruba summarized his arguments for
analyzing efforts rather than sales into three major
contentions: efforts are more controllable than results,
are reported sooner, and are less influenced by terri-
torial environmental factors.

Wotruba (1971) further explained, analysis of
efforts help evaluate salesperson performance along the
same criteria as those activities asked of the salesper-
son. Hence, analysis of effort allows the sales manager
to ascertain if the salesperson is meeting company per-
formance standards. Analysis of efforts more readily
points to a specific problem with the salesperson, as
opposed to sales analysis which can often be the result
of rapid territorial change. Analysis of efforts rewards
salespeople attempting to establish long-term sales

results. Further, the analysis of efforts ignores wind-

15

falls, and motives salespeople with windfalls to continue
their efforts.

Wotruba (1971) listed and discussed many criteria
'useful in analyzing salesperson efforts quantitatively.
Among those discussed in greatest depth are efficient
use of time, duty analysis, and activity measures.

Davis (1948) found that longer sales calls pro-
duced more sales, while Tonning (1964) found more sales
calls produce more sales. Wortruba (1971) suggested that
the prOper conclusion from these two findings is for
sales people to spend as much time selling as possible
and attempt to reduce nonselling time.

Additionally, Davis (1948) found a relationship
between the number of items mentioned by the salesperson
and the number of items sold. This study was made of a
sales force with but a single product line.

Henry (1975) developed a systems network of
information flows useful to the sales manager in setting
long term goals, making better plans to achieve them,
and working more effectively with salespeOple. Henry's
methodology is a direct extension of systems engineering
method. Critical to the analysis of the system presented
is the measurement of the system's efficiency. Measures
of overall efficiency suggested are contribution to pro-
fit, return on assets managed, sales cost ratio, market
share, and achievement of company goals. Henry recom—

mended analyzing salespeople by their number of calls,

16

and the dollar sales or profit per call. This respec-
tively yields both a quantity and a quality index of sales
effort. Henry further found the allocation Of the sales
'effort or sales mix crucial:

For each salesman and for the sales force as a

whole, there is some Optimum frequency Of calls

on large, medium, and small customers, and on

large, medium, and small prospects, that will

maximize the profit return per unit Of sales

effort expended. (Of course, customers may

also be classified according to industry, geo-

graphical location, and other factors, but for

the sake Of simplicity let us assume here that

volume and profit are the classifications used.)

(p. 87)

Henry suggested that in allocation Of effort based
on product profitability is related to allocation of calls
by customer sizes or types. If a salesperson calls too
much on key customers, they will be trapped by the law Of
diminishing returns, for there comes a point at which
additional calls could more profitably be made to smaller
customers or prospective customers. Henry further stated
that except for those peOple following a rigid call sched-
ule based on account classification and routing, most
salesmen do not allocate their time for maximum returns.
Selling is Often a lonely and discouraging occupation, so
it is only human to spend too much time with the friendly
customers and easy buyers, while neglecting those psycho-

logically chilling calls On hard-nose buyers and nonbuying

prospects.

17

Henry found that an improvement in this salesmen's
input variable usually has a marked effect on product mix,
for the sales efforts are more heavily concentrated on
'prospective users of the more profitable products. Total
sales volume and the sales cost ratio may gO either up or

down, but net profitability will gO up.

Sales Results in Salesperson

Performance Evaluation

 

Single criteria for evaluation Of salesperson
performance Often fall short Of being comprehensive.
While it is widely accepted that sales, when viewed
alone, do not provide a complete view Of salesperson
performance, one line Of current research holds that
gross margin Of sales made should be the sole criteria
for evaluation and compensation.

Farley (1964) demonstrated that, "a sales compen-
sation plan paying equal commission rates on the gross
margin of the products in a salesman's line is shown to
be Optimal" (p. 39). Optimal is used in the context of
profit maximization. The problem Of accounting for "loss
leaders" is countered by, "the compensation plan remains
Optimal if negative commissions are paid on items with
negative gross margins" (p. 41).

This article spurred an entire line Of research
(Davis & Farley, 1971; Farley & Weinberg, 1975: Srinvasan,

1981: Weinberg, 1978: Weinberg, 1975). Each study kept

18

the assumption that the Objective Of the firm was tO
maximize profit in the present period. NO article in
this line of research mentioned the possibility Of long
-range effects of such a plan. Each article was a highly
mathematical proof based on assumptions from previous
literature.

Buzzel, Gale, and Sultan (1975) found market
share to be a key tO profitability. Abell and Hammond
(1979) demonstrate how lowering price initially can gain
market share yielding long run profitability. It would
be difficult to pursue a market penetration strategy for
a new product introduction given the existence of a
similar product already in the market place and a sales-
force paid on a portion Of their gross margin. While
Optimization models can be tightly designed to show
Optimal profits for the present period, no research
reviewed was able to account for the longitudinal effects
of such a plan. Also ignored is the increased production
cost on low gross margin items from shorter production
runs and loss Of experience factors.

Darden and French (1970), in reviewing the body
Of literature, were able to aggregate factors affecting
sales performance as "total" product characteristics,
sales force characteristics, demand characteristics,
and other influences. Sales managers were asked in an
Open-end, mail survey question format what formal and

informal methods they used to evaluate salespeople and

19

the sources, and their relative importance, Of their
information. Sales managers in the brewing and college
textbook industries were chosen as the population under
-investigation. Darden and French found that sales
managers practices Of salesperson evaluation were not
uniform, and that sales managers tend to place the great-
est emphasis On factors for evaluation that are character-
istic Of themselves.

Lucas (1975) tied the use Of an information system
to the prediction and evaluation Of performance. Lucas
examined univariate statistics for their ability to pre-
dict sales. Age, time in territory, keeping Of private
records, and education were all used as inputs to predict
sales. No attempt was made to use the information system
to evaluate salesperson performance. Multiple and step-

wise regression were used in analyses.

Sales Performance Evaluation

 

by Margins

 

Beik and Buzby (1973) contended that,

By tracing revenues to market segments and

relating these revenues to marketing costs,

the marketing manager can improve and control

his decision making with respect to the firms

profit Objective. (p. 48)
Beik and Buzby proceeded to generate the contribution of
each segment to the profitability of the firm. Nonassign-
able marketing costs are treated as fixed costs and not

allocated on any basis to the segments. The generation Of

20

the contribution per segment is made on the basis of the
work of Sevin (1965).

Sevin (1965) stressed finding and eliminating
-unprofitable market segments. However, Sevin allocated
fixed marketing costs to all segments on the basis of a
selected criteria.

It is useful to allocate portions Of fixed

marketing costs to specific segments Of the

business because there are nearly always

alternative marketing users for such "pieces"

of fixed costs. (p. 20)
Beik and Buzby (1973) countered this argument by citing
the example of institutional advertising whose cost when
allocated only clouds true profitability. Horngren (1967)
stated,

The costs of efforts are independent Of the

results actually Obtained, in the sense that

costs are programmed by management not deter—

mined by sales. (p. 381)
Horngren continued to develop a contribution approach to
analysing product profitability. This method is further
supported by the bulk Of research (Bowersox, Cooper,
Lambert, & Taylor, 1980; Crissy, Fischer, & Mossman,
1973; Day & Bennett, 1962: Mossman, Crissy, & Fischer,
1978: Mossman, Fischer, & Crissy, 1974; Simon, 1969).

Sevin (1965), however, developed a system for
allocating many costs that are traditionally thought of
as fixed to the particular market segment responsible.

This methodology: with the exception Of arbitrary alloca-

tion Of pure fixed costs, is used by Beik and Buzby (1973)

21

in developing a contribution approach analysis Of market-
segment profitability.
Fogg and Rokus (1973), appearing in the same issue

'Of the Journal of Marketing as Beik and Buzby (1973), used

 

a nearly identical method of figuring "contribution to
Operating margin" to develop the profitability of the
salesperson in each territory. Fogg and Rokus further
investigated using contribution to Operating margin as a
means for setting commission rates, sales force size, and
territorial decisions. In each case the Objective func-
tion is to maximize the contribution to Operating margin.
Contribution to Operating margin was defined as gross
margin less direct costs Of the sales force. Fogg and
Rokur did not discuss the longitudinal effects of basing

decisions on this methodology.

Compensation, Incentives! and
the Evaluation Of Salespeople

Day and Bennett (1962) investigated compensating
the sales force by a portion Of the profits they generate.
Their suggestion, made 20 years ago, has the advantage of
matching the presumed company goal Of increasing profits
with the salesperson's presumed goal of increasing their
income. While in 1962 the cost Of preparing profitability
analysis by salesman might have outweighed the benefits,
modern computers would find this tedious work routine.

However, Sales and Marketing Management, 1981, "Survey of

22

Selling Costs," Section IV Compensation, shows few firms
compensate by gross margin, contribution, or net profit.
The vast majority of firms using incentives based those
.On sales volume.

Winer (1973) showed that salespeople may not seek
to maximize their income. In an experiment where a treat-
ment group is given extra incentive, the control group
clearly outperformed the treatment group. Darmon (1974)
concluded that "salespeople work just hard enough to
attain what they consider an acceptable level Of income"
(p. 418). Walker, Churchill, and Ford (1977), however,
found salesperson motivation much more complex. Walker
et a1 presented a psychological model Of the determinants
of a salesperson's performance for use as a conceptual
framework to guide future empirical research in sales
management.

Cotham and Cravens (1969) discussed the difficulty
sales managers face when trying to compare evaluative
data across different criteria which are even in different
units. Cotham and Cravens suggested that all evaluative
data first be converted to its Z score. In this manner
the sales manager automatically knows the mean and the
effects of skewedness are compensated for.

Pruden, Cunningham, and English (1972) investigate
nonfinancial incentives role in sales motivation. Con-
clusions show that a balanced mix Of financial and non—

financial incentives is necessary to maximize salesperson

23

job satisfaction. Steinbrink (1978) found the plan for
compensation crucial to motivation and sales. This
thorough analysis Of compensation methods and performance,
-in 380 companies in 34 industries, only makes mention of
”the trend toward obtaining profitable sales" (p. 122) in
final summary. Pruden et a1. indicated that this might
be the future of compensation schemes.

Stanton and Buskirk (1978) showed the relation of
compensation plans to evaluation. Compensation, in
theory, should reward the salesperson for achieving the
goals Of the company. However, a good compensation system
should be simple and easily understood. Rarely are the

goals of a company so simple.

Territorial Sales

Performance

 

Perhaps the strongest line Of research supporting
a theoretical base is the line of research based on the
development of the model first advanced by Cravens,
Woodruff, and Stamper (1972). Variations in sales terri-
tory performance were divided into those factors affecting
that performance. Not only did Craven et a1. put forth a
conceptual model, they also put forth a functional rela-
tionship Of the constructs of the conceptual model that
have, to a great extent, only been built upon and refined
by later researchers. Their functional relationship is

as follows:

24

T = [(P1 W! S: C! 0)

where

Sales territory performance
Territory potential

Territory workload

Salesman characteristics

Company standing in the territory
Other factors. (p. 32)

O‘DUIS’UFB
II“ "II" N

P, C, W, and S investigated this relationship
through multiple regression analysis. Sales in units in
each territory was the dependent variable using various
predictor measures attempting to quantify each of the
predictor variables, P, W, S, and C. It was found that
in the case examined 72% of the variation in sales was
explained by using eight predictor variables.

Cravens and Woodruff (1973), in a similar study
using the same model, used a Spearman rank-correlation
coefficient to determine if sales performance in a terri-
tory matched the increased sales expectations accounted
for by the variable "years of experience." Stepwise
multiple regression on very nearly identical predictor
variables yielded markedly different results.v Somehow,
the number of accounts in a territory was the sixth fac-
tor contributing .001 instead Of .57. The strongest pre-
dictor of territorial sales in this study was the length
Of employment of the salesperson explaining 73% of sales
variation. While the source of the data in both Cravens,
Woodruff, and Stamper (1972) and Cravens and Woodruff
(1973) was not cited, it would seem safe to say they

were two different sources. Neither article makes

25

reference to the results Of the other. While it would be
easy to conclude that predictor variables vary widely from
situation to situation, strong multicolinearity between
‘the variables may well hide the relative strength of the
relationship of each predictor variable. Correlation
between predictor variables was not mentioned by either
researcher. 0

Lucas, Weinberg, and Clower (1975) applied the
functional model Of Cravens, Woodruff, and Stamper to the
retail apparel industry to establish the relationship
between territory potential and sales representatives'
workload with sales. The findings were used to derive a
model to assist sales management in sales force size
determination and sales performance evaluation. It was
found that, "[separate] regional analysis of the sales
response functions were more informative than an analysis
for the entire nation" (p. 304). No conclusion was made
about the possible use of the model in evaluating sales
performance.

Beswick and Cravens (1977) changed the model pro-
posed by Cravens, Woodruff, and Stamper (1972) by breaking
company standing in the territory into two components,
company experience and company effort in the territory.
In the same manner, salesman characteristics were divided
between selling effort and salesperson experience. In
fact, this expansion Of the functional model simply

incorporates more of the constructs from the conceptual

26

model of Cravens, Woodruff, and Stamper (1972). Beswick
and Cravens (1977), by examining sales force character—
istics, territory characteristics, and sales results,
-solve the multiple regression equation using a dynamic
programming algorithm for Optimal sales by designing
sales territories and workload. Beswick and Cravens,

in part, validated their model by the reaction of sales
managers to the results. It is suggested by the authors
that a similar methodology could be used to evaluate
salesperson performance. Lucas, Weinberg, and Clower
(1975) attempted to derive a model to determine sales
force size and evaluate sales performance, while Beswick
and Craven (1977) started with a predisposed model,
separate from that develOped by Lucas, Weinberg, and
Clowes (1975), and applied it.

Beswick and Cravens (1977), as typical Of prior
research, stated the Objective of "evaluating salesmen"
but do not pursue this issue. Beswick and Craven con-
cluded, "[If the model can be shown to be] a good measure
of salesman quality, this measure can be used in future
models to develOp the salesman quality factor" (p. 144).
The mention of this factor as a means of sales performance
evaluation for sales managers is ignored, while the use Of
salesperson performance is used as an input factor for the
model to predict dollar territorial sales potential.
Beswick and Cravens (1977) established no measures of

salesperson quality from their model.

27

Parasuraman and Day (1977) developed a model
similar to Beswick and Cravens (1977) sales responses
models, except, their model takes into consideration
.carryover effects of previous sales efforts. Again,
salesperson performance is a given input to this model
and proved to be a significant factor. Parasuraman and
Day tested this model by polling the management Of the
one company involved. "Although their evaluation was
subjective, their endorsement is perhaps the most mean-
ingful test of the model" (p. 28).

Wittink (1977) investigated the use of sales
territories as the unit of measure for the analysis of all
marketing variables. Time series analysis in each terri-
tory was used to generate the input for each territory's
potential. The model used investigated price and adver-
tising in each territory ignoring sales factor.

Ryans and Weinberg (1979) attempted to consolidate
previous studies of territory sales response, They weigh
the relative importance of each input factor to the model.
Then they develop a framework in which to study territory
sales response, and then test the model in three different
corporate settings. A different model was developed for
each company. It was found that the input "workload," as
operationalized by the number of accounts in a territory,
did not explain any variation in sales.

The value of sales territory performance reviewed

to this study, although tangential, is important. The

28

Craven model identifies significant factors that affect
sales territory performance. These factors may also

influence a salesperson's allocation of sales efforts.

Summary Of Literature

 

Evaluation of salesperson performance has been
shown to be a complex process. Evaluation criteria need
to be designed to the needs of the firm.

While many of the methodologies discussed cannot
be applied to the missionary sales force, however, these
methods of analyzing sales efforts can. Wotruba (1971)
delivered a sound argument for analyzing sales efforts and
using measures of sales efforts in preference to sales
analysis. However, Wotruba only discussed sales effort
measures in terms of time wasted and the number of differ-
ent items mentioned in the presentation. There appears to
be little work on evaluating what customers are called on
and which products are presented as suggested by Henry
(1975).

The review of relevant literature, while in
general providing an excellent body of knowledge, has
not directly addressed the research questions Of Chapter
I. Few studies have confronted the problem Of evaluating
sales performance of a missionary sales force rather than
the traditional sales force.

Henry (1975), and Stanton and Buskirk (1983) both

rigidly set forth a list of sales activities defined as

29

sales efforts and another list of variables to be con-
sidered as measures Of sales results. Each author
assumed that the sales efforts are but a mean to the
'sales results. While in the long-run analysis this belief
central to the creation Of the missionary sales force,
sale evaluation in the present time period must be an
evaluation of sales efforts. The manager of a missionary
salesperson must consider sales efforts to be identical
to sales results since the missionary salesperson, by
definition (see Chapter I), is not responsible for any
Of the sales results measures listed by Henry (1975) or
Stanton and Buskirk (1983). The formation of missionary
sales force, by management, is a de facto statement that
management believes sales efforts to be the sales results
Of the sales force. Further, it can be concluded that
the management of these sales efforts or results in some
designed pattern will achieve the goals of the firm.
Inherent in the formation of the missionary sales force
then is a belief by management that the performance of
specific sales activities will achieve the goals of the
firm.

WOtruba (1971) reasoned that sales efforts meas-
ures are often superior to measures of sales results,
due to the fact that they are more controllable, are
reported sooner, and are less influenced by exogenous
factors. This line Of reason can be logically extended

that increased delays in the reporting of sales results

30

would increase the importance of measuring and managing
sales efforts.

An enigma of logic exists in this reasoning. The
-less sales are related to sales efforts, the more impor-
tant sales efforts are to manage. The reason for this
enigma is found in the management of any system (see
Henry, 1975). The longer the system must run without
correcting feedback, the more difficult it is to manage.
Sales forces whose sales efforts are directly related to
immediate sales, need not manage sales efforts. Managing
sales, in such a case, in turn manages sales efforts.
Immediate sales results dispenses the need to manage
sales efforts.

Managing sales efforts increases in importance
as the delay in acquisition of lag in sales results
increases. The management Of sales efforts provides
corrective feedback to the management system before sales
results data are available. This shortens the time
period that other systems need to adjust (Balsley, 1980).

Many questions are left in the performance
management Of a missionary sales force. NO body of
literature establishes what sales efforts are most
important to manage. While it has been suggested that
measures of sales effort can be used to manage a sales
force, it has not been shown that they are used or how

they are used. Further, how might a firm integrate

31

these Objective measures of sales effort with the
subjective measure of sales performance widely reported

in the literature.

CHAPTER III

RESEARCH DESIGN

Introduction

 

This chapter develops a methodological framework,
consistent with the findings Of existing literature, in
which the research questions in Chapter I can be explored.
Three sections outline this Objective:

1. Approach to the Research Problem

2. Research Goals

3. Methodology

Approach to the Research Problem

This research will investigate the use of Objec-
tive measures of salesperson effort as a means of evaluat-
ing a purely missionary sales force and how this means Of
evaluation is utilized in conjunction with subjective
salesperson evaluation techniques. Wotruba (1971), while
stating a strong case for the use Of objective measures
of effort as a tool for the evaluation of salespeople,
provided no comprehensive methodology for the collection

and evaluation of sales effort data.

32

33

The use Of time spent on different sales task, as
mentioned by Wotruba (1971), is particularly difficult to
measure and collect on a continual basis. As such, the
'study of sales efforts must be limited to those efforts
that can be measured. One document collected by many
firms is the "weekly call sheet" or "activity report."
This document essentially reports the number and nature
Of sales calls. This one unit of measure of effort,
however, can include much information as to who was
called on, what products were presented.

In evaluating a salesperson's efforts, it would
be beneficial to the sales manager to identify how sales
efforts are being allocated among the many activities
a salesperson performs (see Sales Efforts, Table 1).
Figure 1 identifies four factors, including the sales-
person, that may affect the allocation Of sales efforts.
The sales manager must evaluate territory (workload can be
ignored according to Ryans & Weinberg, 1977), company per-
formance, and other variables when separating the sales-
person's contribution to the sales territory performance.

A sales manager in evaluating a salesperson must
examine the sales territory performance and decide what
portion Of effort performance is due to the salesperson,
and what portion is due to the nature of the territory,
the company, or other factors. A sales manager considers
these factors when evaluating the salesperson's alloca-

tion of sales calls among customers and efforts at

34

 

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35

selling various product lines. In evaluating sales call
allocation, a sales manager must be able to decide what
levels of effort are either too low or tOO high.

In order to facilitate comparability of sales

effort between and within each level of the sales force,
percentage of the total sales calls will be used in addi-
tion to the numeric total. Ryans and Weinberg (1979)
concluded that the sales manager is an influence on sales
territory performance. The sales manager, as such, must
use regional average figures of the sales force rather
than company wide benchmarks to remove the company
performance influences from sales territory efforts. When
each category for analysis is presented as a percentage
of the total sales calls, then the two analyses can be
compared. This solves the comparability problem cited
by Cotham and Cravens (1969). Further, a third analysis
can be generated by comparing the corresponding percentage
of sales efforts with acceptable standards set by each
level of management. This adjusts figures for sales
manager influence found by Ryans and Weinberg (1979).
This third analysis represents how the sales efforts dif-
fer from managerial norms. The variances in this analysis
adjusted for managerial performance standards then can be
attributed to sales effort performance.

Tables 3, 4, and 5 are provided as an example of
how this sales effort analysis might be constructed so

a regional manager could evaluate salespeople in his

36

Table 3. Regional Sales: Product Lines by Customer Class
(as a percent of total sales calls)

 

Product Line

 

 

 

A B C Total
Customer Class
A % sales calls 10 15 15 40
B % sales calls 10 10 15 35
C % sales calls 15 10 O 25
Total % sales calls 35 35 30 100

 

Total number Of calls = 1,000

37

Table 4. Sales Representative (X): Product
Lines by Customer Class (as a
percent of total sales calls)

 

Product Line

 

 

 

A B C Total

Customer Class
A % sales calls 15 3 4O 58
B % sales calls 5 20 10 35
C % sales calls 5 2 O 7
Total % sales calls 25 25 50 100

 

Total number of calls = 1,000

38

Table 5. Percent Difference from Region by
Salesrepresentative (X): Product
Lines by Customer Class (as a
percent of total sales calls)

 

Product Line

 

 

 

A B C Total
Customer Class
A % sales calls 5 -12 25 18
B % sales calls -5 10 -5 10
C % sales calls -10 -8 0 ~18
Total % sales calls -10 -10 2O

 

Total number of calls = 1,000

39

jurisdiction. Table 3 includes all sales calls made by
all salespeople in the jurisdiction of the regional sales
manager. This is reflected in the 100% figure in the
'lower right corner Of the table. Percentages are used in
order to facilitate comparison, overcoming the problem
cited by Cotham and Cravens (1969). As an example of how
this base of sales calls can be subdivided and studied,
two variables have been selected. Columns on the table
reflect what product lines were presented. Three differ-
ent product lines (A, B, and C) were chosen to simplify
illustrations. The bottom row of the table labeled
"total" shows that region wide salespeople allocate 35%
of their sales calls to each of product lines A and B,
and 30% of their calls to product line C.

The rows of the table demonstrate how the regional
sales force, as a whole, allocates its sales calls among
three customer classes, A, B, and C. The far right hand
column labeled "Total" shows that region wide salespeople
allocated 40% of their sales calls to customer's classi-
fied as belonging to logical grouping labeled "A," 35%
to customer class B, and 25% to customer class C.

Single measures would be sufficient if there
were no interaction of product lines and customer classes.
Table 1 shows that no salesperson showed product line C
to customer class C by reporting a ”O" in the intersec-
tion of the row and column shared by each level of each

variable. This possible interaction requires the

4O

generation Of the full table rather than single measures
of sales effort allocation.

Table 4 provides similar information, however,
‘the 100% figure in the lower right now reflects the
total number of calls made by an individual salesperson.
The tables are identical in construction except for the
base Of the percentages. The concept of the two tables
is for the salesmanager to use region wide percentages
as a base to analyse the distribution Of sales calls
by individual salespeOple. Table 5 was created to
facilitate such comparison.

Table 5 was generated by subtracting the per-
centage in each cell in Table 3 from its corresponding
cell on Table 4. Table 3 shows that region wide 10%
of sales calls showed product line A to customer class A.
Table 4 shows that sales representative (X), as an
example Of one salesperson, showed product line A to
customer class A 15% of all calls. Table 5 shows that
the 15% allocation of sales calls, by sales representa-
tive (X), exceeds the region wide average of 10% by 5%.
Hence, 5% is reported on Table 5. If the percentage of
sales calls for a particular product line, customer class,
or both is lower than the regional percentage, Table 5
reports this as a negative number. Positive numbers on
Table 5 reflect areas where the salesperson allocates
more calls, as a percentage of total calls, than is

allocated region wide. Conversely, negative numbers on

41

Table 5 reflect those product and customer classes for
which the salesperson allocates a lesser percentage
effort than practiced, on the average, regionally.

Table 5 represents sales territory performance
adjusted for regional influence. The factors from the
Cravens model contributing to the variation shown in
Table 5 are salesperson performance, territory potential,
and other factors. Territory influence is removed by
the judgment of the sales manager after reviewing the
available information. The analyses only describe sales
call behavior, it does not make any judgments as to the
desirability of that behavior. The sales manager, in
order to best use these analyses, should be aware of
what cells in the analyses salespeople should attempt
to exceed average in, and what cells Of the analyses

they should not.

Research Goals

1. Establish measures of sales effort useful
to sales performance evaluation.

2. Establish how measures of sales effort can
be used to manage a missionary sales force.

3. Establish how quantitative measures of sales
effort can be used in conjunction with subjective measures

of sales performance of the missionary sales force.

42

Methodology

 

The missionary sales force under study is a divi-
sion of a multinational corporation with annual sales in
excess of five billion dollars. The division markets
over 100 million dollars worth of industrial tooling
products annually. The sales force consists of 75 sales
territories, 10 regional sales managers, three area sales
managers, and one sales executive.

Prior to 1979, the sales force was organized to
serve the distributors. Since that time, the efforts
of the sales force have been sharply shifted to concen-
trating on end users. The strategy is now to "pull"
the product through the channel rather than the "push"
strategy of calling on distributors.

The products marketed by the division are sold
to numerous industrial distributors which resell to end
users. These distributors vary greatly in size of geo-
graphic area served as well as their depth and width of
inventory carried. Thus, the use of these distributors
prevents the company from Obtaining data pertaining to
which end users purchase what products. The only sales
volume records are those to the distributors which cannot
be traced to the company's individual sales territories.

Weekly call reports made by the sales representa-
tives provide the company its only measure of sales force

activity. These records are kept by the regional sales

43

manager, the information is not reported to upper manage-

ment or further analyzed.

Application

 

Management of the sales force had set informal
standards for sales effort allocation. These standards
focused on the distribution of sales calls between
customer types (end users vs. distributor), and the
various product lines. While informal standards existed
in the minds of management, no written record existed.
Since the emphasis Of the sales force was shifted in 1979,
information prior to the change to end user concentration
was not felt to be relevant to the study.

The weekly call report shown in Appendix A has
been edited to conceal the actual products Offered by
the company. Company Officials felt that the information
under investigation could be of use to their competition,
and as such wish to remain anonymous. The weekly call
report contains basic information on sales call activ-
ities. This yields four customer classes. Products
reviewed information falls into nine product line classes.
All product lines presented are recorded for each call.
Calls where multiple product lines are presented will
receive multiple count up to three product lines to
reward salespeople for additional effort.

A six month time period was chosen as the data

base for the study. This was chosen so that the company

44

could compare the data generated to national sales volume
data gathered by the company.

Two elementary forms of analysis of sales call
‘efforts are the distribution of sales calls between
different customer classes, and the distribution Of sales
efforts between the elements of the product line. Since
these two variables cannot be assumed to be independent,
the distribution of sales efforts between customer, and
product classes was made simultaneously.

For most sales organizations, this form of sales
effort analysis could be linked to a sales results
performance measure that could in turn generate a profile
Of sales effort distribution correlated to sales success.
However, the missionary sales force lacks this solid sales
results information. This same lack of solid sales out-
put information makes missionary sales force performance
evaluation difficult and uncertain. This study seeks to
demonstrate that the use of sales effort variables (cus-
tomer classes called on and products presented) are
useful tools in managing the missionary sales force to
achieve sales output objectives.

The research problem will be addressed within
the context of introducing sales effort analysis to the
management of a large missionary sales force. Sales
effort analysis will be introduced to the firm in four
steps. First, management, in conjunction with the

researcher, must establish what sales input variables

45

are important (have the strongest relationship to sales
results for that firm) to management. Second, analysis
of these sales efforts will be performed. Third, each
'level of management will establish minimum and maximum
levels of effort in each category for those in their
jurisdiction. Fourth, results Of the sales analysis
will be presented to management, and study made of their
use of the information as well as their beliefs of its

usefulness.

Preliminary Investigation

 

In order to establish a valid data collection
instrument with which to capture the data required, a
preliminary instrument was developed in conjunction with
the sales executive. This instrument was administered
to a representative sample of 35% of the sales force,

50% of regional managers and all area managers.

Development of the Instrument

 

The replies from these instruments were used as
the central focus for the develOpment of the final
research questionnaire. This questionnaire was developed
by the researcher in conjunction with the three area
managers and two executive staff members.

Objective measures of usefulness of data defy
rigid quantification. This problem increases in magnitude
after the data has been revealed to the user. For this

reason, sales managers at all levels were forced to set

46

minimum and maximum standards of performance for those
in their jurisdiction (see Appendix B). These standards
were used as a benchmark in establishing what data dif-
lfered from the expectation of management and the mean-

ingfulness of that difference to managerial action.

Form of Analysis

 

Perceptions of present sales effort allocation
of salespeople and regional managers will be compared to
national averages. Individual salespeople's actual
performance will be compared to the managerial tolerance
set by their regional salesmanager. The number of
salespeople not conforming to managerial standard in
each category will be generated. This same analysis
will be done at both the regional and area level.

Desired changes in sales effort allocation will
be split into sales people seeking increase and decrease
their allocated effort in each single variable category.
Further, overall average change desired in each category
will be generated. This information will then be com-
pared to the differences of salespeople's predicted sales
allocation and their actual performance on a national
basis.

This research seeks to examine the use of sales
effort data by a firm. After reviewing all data gener-
ated, a focus group interview with top management was

held to determine use of the sales effort analysis and

47

based upon the analysis. The research Objective of the
meeting was to provide information that would address the
research question of how objective and subjective measures

Of sales efforts can be integrated.

Limitations of Methodology

 

The intention Of the previously outlined method-
ology is to identify some possible solutions to the
research questions. Exhaustive identification of all
possible solutions to the research questions is forcluded
by the vast differences in the characteristics Of
products sold, customer called upon, and managerial styles
Of the vast number Of sales organizations.

The methodology presented is limited by numerous
factors. Many limitations stem from study Of one
firm.

Conclusions, hence, will be possible alternatives
available to other sales forces, but will not be directly
applicable. Information provided to the sales organiza-
tion under study will only be as valid as the data pro-
vided to the researcher by the firm. Historical sales
call information is limited to the data captured by
the company's reporting system. The research selects
only two sales effort variables to study, rather than
exhausting all variables available, or suggested by the

literature.

48

The number Of variables chosen was limited to
ensure an acceptable level of response accuracy. How—
ever, even with the limited number of variables under
'investigation some response errors can be expected.

The specialization of some salespeople, as well
as the unique nature of some sales territories demand
individual evaluation rather than being compared to any
average or standard measures for performance. Which

territories to include or exclude was left to the judge-

 

ment Of the sales forces management. Employee turnover
further disrupted the continuity of data. Internal
validity was further disrupted by the time lag between

the time period under study and collection Of data.

CHAPTER IV

FINDINGS

This chapter will be organized into three sec-
tions. The first will review information gathered on
salesperformance evaluation processes of the regional
managers. The second section will organize the results
of the instruments gathered from the sales force as well
as the information gathered through the analysis of call
activity reports from the field. The third section will
review the actions taken by management in response to

the information provided.

Salesperson Evaluation Process

 

Appendix A contains copies Of the salesperformance
evaluation forms used by the firm. The salesperson first
completes the "Self-Appraisal Worksheet." The salesperson
then meets with their salesmanager where through discus-
sion they agree on the input to the "Performance Appraisal
Summary." The salesmanager completes only three items
not made available to the salesperson (see second page of
evaluation form in Appendix A). This process is required
once a year, however, two of five regional managers

interviewed completed the process twice a year.

49

 

50

The forms in Appendix A reflect the combination of
narrative and ranking scale evaluation suggested to be in
wide use by Anderson and Hair (1983). No salesmanager
'suggested that any specific Objective measure of perform—
ance entered their evaluation process. Each repeatedly
stated that the evaluation process was "very subjective.f

Managers interviewed had reduced the many aspects
Of evaluation listed on their appraisal evaluations to
three basic key factors: product knowledge, self-
management, and drive. Product knowledge was felt to
be the least important Of the three factors by three of
the five managers interviewed. The remaining two gave
equal weight to all three.

It is interesting that the sales manager's were
implicitly aware Of the "Halo effect" mentioned by Futrell
(1981) and Cocanoughen and Ivancevich (1978). Further,
they had reached concensus as to what the "key factors"
were.

All managers interviewed stated, without prompt-
ing, early in the interview that salesperson performance
was primarily based on the manager's subjective judgement.
Files kept on each salesperson were the primary source of
information. These files contained such items as cor-
respondence from customers pertinent to salesperson
performance, internal correspondence about the sales-

person performance, Or any other pertinent information.

51

Sales managers further guaged performance by
traveling with sales people. Much subjective evaluation
was felt to be done at this time. No manager had a formal
'system for evaluating salespeOple while accompanying them
on their sales calls.

Four of the five interviewed failed to mention
weekly activity reports as a source of information without
prompting. When prompted to explain how they evaluated V‘
weekly call reports, most reported that they first looked
at the number of calls, and then to see if any elements w
of the report were suspect. NO manager interviewed kept
track Of or checked the balance of customer types or
products presented. NO manager reported ever going over
a salespersons weekly reports for over a period of time
in order to establish a pattern of behavior.

The sales managers interviewed all believed that
it would be beneficial to have a summation Of a sales—
person's sales calls, for the period, available when
evaluating them. However, each stated that they did not
have the time to keep such records themselves. It was
further mentioned that the company kept all sales call
reports at the regional level preventing any analysis of

sales efforts by upper management.

52

Results Of Sales Force Survey

 

Distribution and Response

 

Appropriate instruments shown in Appendix B were
'distributed to all members of the sales force. Seventy-
five salespeople, 10 regional managers, three area
managers, and the sales executive received the instru-
ments. Five salespeople failed to return the question—
naire, all others were returned. Two questionnaires
returned by salespeople were rejected for lack of com-
pletion and following directions, another was only
partially completed in one section. This extremely high
return was accomplished by a combination of a strong
letter to the salesperson directly from the sales
executive, followed by a personal telephone call from
the executive's personal secretary. Regional manager
response was accomplished in the same manner with the
addition Of a telephone call from the researcher offering
to answer any questions about the form.

The total population under study consisted of 89
people. Eighty-one responses were useful. A census was
achieved of management. Eight-nine percent of the
salespeople responded in a useful manner.

Table 6 is a percentage analysis of 33,000 sales
calls recorded by the sales force during the first half
Of 1982. The variables used for the analysis were

customer class and product line. Customer classes

53

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vm.v mm.m v¢.mH vo.m vw.oH no.v Hm.om mm.~a Hm.H~ w Houos
bb.a Ho. Ho. mm. ma. NH. No. om. mm. mm. w .umfio .mEOU
mo.wm mm.m em. mv.m me. mo.m oo.H mo.m om.m om.m w .umflo
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Hmuoe m m n w m v m m H mumHO

MOEOumSU
w mused posooum
AmHHco mwamm Hmuou mo unwouom u one
used nonpoum Ocm mmcHO umaoumsu an muuomum
dado Boom maamo mwamm Hcsuod mo c0wusbwuumfia .0 dance

54

included end user, distributors, and competitive distri-
butors. Product lines are numbered one through nine for
company confidentiality. Total percentages for customer
classes reveal 71% of all sales calls were made to end
users, 26% are made to distributors, and less than 2% of
sales calls were made to competitive distributors. Per-
centages do not add to 100% due to a small number of
calls that did not fit into this classification system.
Table 7 records the summated responses, Of 75
salespeople, to a request to give their best estimate
of how they allocated their sales calls during the first
half of 1982 across the same categories recorded in
Table 6. Salespeople perceived that, on the average,
they called upon end users 74% Of all calls. This
perception exceeded their actual allocation Of sales
effort by 3.15%. Table 8 was generated in order to ease
comparisons between Table 6 and Table 7. Table 8 shows
the number Of percentage points that salespeOple's per-
ceptions (Table 7), exceeded their actual performance
(Table 6). The purpose Of Table 6 is to record data
pertinent to the actual distribution of sales efforts
in terms of the two variables under study. The purpose
of Table 7 is to record the numeric percentage perceptions
of the sales force in terms of their allocation of sales
efforts divided by the categories generated by the two
variables under study. The purpose of Table 8 is to

ease comparison of Tables 6 and Table 7. Table 8 records

55

u
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HmuOB m m h o m v m N H MMQHU
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unmoumm m mmv used uozcoum pom uncau HwEoumsu an
cofiusbauumflo HHcU modem mo neodymmoumm chmuommoacm

.5 wanes

56

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mo. u on ucaoeuncmfim.
mCOAOHOQOum 03» mo mmocwuumuwc ucmoamasmfim How pounce

.oomcu0muom
Hmouom mo umnu :mnu mmmH mcofiumooHHm cu>wmoumm uouammu muunfisc O>Hummoz .uocuauomumm
Hmzuom mo mmooxu ca chADmooHHm oo>eoouum uooauwu mucosa: o>eufimom .ouoz

 

 

 

Nm. aaHm.m amm.Hl aamm.H a¢HH.NI mm. 0m.Nl «amm.Nl camm.ml & HmuOB
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uufioumao

 

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AmHHmo modem Hmuou mo ucooumm a

wow Av manna I m OHQOBV mcumuumm HHMU
moamm Hmauom can po>wuouom mo mmocmuommea .m manna

57

the direct difference in comparable percentages between
the two tables. Positive numbers reflect categories in
which salespeople's percentage perception of how they
-allocated their sales efforts exceeded actual performance.
Negative numbers on Table 8 reflect those variable cate-
gories in which actual sales efforts exceeded the per-
ceived efforts recorded by the sales force. The data
presented in Table 8 should not be compared from between
categories without referring to what the base percentages
were for each category. As an example, from the total
customer class column from Table 8, percentage of sales
calls made to end users was about 3% less than was per-
ceived.

Table 6 shows the national average of how sales—
people felt they allocated their sales calls during the
time period under study. Table 7 presents the distribu-
tion Of salespeOple's sales calls by customer class and
product line during the first seven months of 1982.

Table 8 presents the excess difference Of percentages
of salespeoples expectation and the average for each
corresponding category tabulated from call reports.

Management, prior to the study, had stated a
desire to shift sales call from distributors to end users
and competitive distributors. SalespeOple perceived
they called on fewer distributors than they actually had
and more competitive distributors and end users. Manage-

ment desires to turn these perceptions into reality. This

58

pattern of salespeople's perceptions of call patterns
conforming to managements desires, to a greater extent
than their actual behavior, is consistent through every
cell found to have a highly significant difference.
Management interpreted these differences to indicate
that they had communicated what was expected of sales-
people in terms Of the distribution Of sales calls.

Table 9 shows the responses Of regional sales
managers when asked how they believed the sales peOple
in their region had allocated their sales calls by
product lines shown and customer classes. Table 9 dif-
fers from Table 7 in that Table 9 is the perceptions of
sales managers as to how salespeople perceive sales
calls have been allocated while Table 7 is the response
given by salespeople to the same questions.

Table 10, again, is generated by subtracting
the percentages from Table 6 (actual sales calls) from
Table 9 (sales managers' perceptions of how sales calls
were allocated). Comparing Table 10 and Table 8 is quite
insightful to the workings of the sales force. Again,
the total customer class column is revealing. Management
is attempting to shift sales calls from distributors to
end users. Salespeople perceive they are calling on end
users more Often than in reality by 3%, however, managers
underestimated the percentage of end user calls by over
9%. This yields a 12 percentage point spread of manager's

and salespeople's perceptions of the distribution of

59

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v.m e. m. a. m. o.H v. m.H m.H o.H w .umeo .dsoo
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m.Ho m.m m.m m.m m.m m.v m.m s.HH «.0 o.- w mama: cam
Hence a m a o m e m N H mmaao
Hmfioumao

 

w mused uospoum

 

Audaco moacu Hmuou
uo unmouom m mmv mafia uosooum can mmmHO Hosoumco >n
cofiuanwuumwo HHmU muacm mo mcofiumuouom unwound: Hccowmom .0 dance

60

 

 

 

mh.v vm.m mm.m| ow.~ v®.HI mm. Hm.ml mm.HI mH.m a Hmuoe
no.0 mm. mv. an. mm. mm. mm. ON.H mN.H ho.H w .umda .QEOU
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dance m m h m m w m N H mmmHU
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manomom HHcO >n ouuuomom mm moan uoopoum one mmnao uwsoumsu >n mHHuU
mo coHusnfiuumeo on» can mc0wumoouom muomccmz Haconum mo moocuuummao .OH manna

61

sales calls. Further, the salespeOple, when viewed on
average in this category, have perceptions closer to
reality than management. The sales force calls on end
'users more than is perceived by management. Just the
opposite is true of distributor calls.

Both salespeople and sales managers believed
that more calls were being allocated to competitive
distributors. Again, salespeople's perceptions of
allocation, on average, were closer to actual recorded
information.

Product line differences and agreement also
exist. Product line one was characterized by management
as a low margin easy to sell product line. Again, a
spread of perceptions. SalespeOple estimated about eight
percentage points low on their estimate of their allocated
efforts to the product line, while management estimated
five percentage points above actual recorded sales calls.
This, again, indicates a pattern of salespeople knowing
how management wants them to allocate their calls, and
management's disbelief that salespeople are performing
as directed.

However, there are more categories of agreement
in Table 6 and Table 8 than disagreement. Customer class
balance and product line one are of interest due to
management's prior interest in managing the portion Of

effort devoted to each category..

62

Regional sales managers were asked to set their
performance standards for sales call allocation. Speci-
fically, they gave the percent of sales calls, for each
'product and customer category, that would be too low on
allocation and that percentage of sales calls that would
be too high on allocation of sales efforts for that
category. This spread of lowest percent of sales calls
allocated to a product line customer class and highest
percent of effort expected in the particular category
will be referred to as "managerial tolerances." If a
salesperson's actual percentage in a specific category
is below that of the lowest percent Of effort given by
their salesmanager, the salesperson will be counted or
being lower than the managerial tolerance level set by
their manager. Conversely, if an individual salesperson's
allocation Of sales efforts exceeds the highest level,
as set by their sales manager, the sales person will be
counted as being higher than managerial tolerances in
the allocation of their sales effort in that category.

Table 11 reflects the number of salespeOple in
each category whose percentage allocated efforts for
that category are lower or higher than their regional
sales managers acceptable tolerances. The number of
salespeople lower than tolerance is stated in the "L"
column while higher than tolerance is the "H" column.
The two numbers are then added to yield the total number

Of salespeOple not within tolerances. This total number

63

 

 

 

 

 

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on oe ma Hm 6H Ha me an mm umnssz
m \R m\mm mic ~\S 33 : 1. min 2): 3:: H38.
m.mm m NH m.m o.m m.s m.s m.mH m.s m.oa a
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mm om cm ma «H mm m Hm AH Nu swassz
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u \ A z \ a m \ a m \ a m \ a m \ q x x a m \ a m \ a m \ A mmaao
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mm a :
nomucdammamm HucOAOQm Hausa
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pom uoaoumzu an mHHmO madam mo COADmOOHH4 omosz uamoommuaum no nonfiaz .HH manna

64

is then converted to the percentage of the sales force
responding. There is little reason to believe that
nonrespondents met managerial tolerances better than
‘respondents.

In 10 different categories over half the sales
force is outside of managerial tolerances, including all
three customer class totals. Product lines eight and
nine, later revealed as being of strategic importance,
also had over half Of the sales force out of tolerances.
Competitive distributors when broken down by product
lines had amongst the highest conformity to managerial
tolerances, however, because the individual cells had
such low occurrence, many managers included zero as the
lower tolerance for each subcategory among competitive
distributor calls, as long as the competitive distributor
total met standards. It can be seen, however, that 53.5%
of the sales force did not meet minimum standards for
competitive distributor calls. This would indicate that
the product line break down for competitive distributor
calls was not meaningful to most managers. Regional
managers managed competitive distributor calls in total,
without placing emphasis on what product lines were sold.
Managers set closer tolerances in the end user and
distributor categories.

Especially noteworthy from Table 9 is the fact
that of the 30 salespeople out of tolerance with their

regional manager with respect to total end user calls,

65

that 25 of the 30 were above the standards set by manage-
ment. This is in direct conflict with the statements by
management that they need to place additional emphasis
(in their category. The shift from a sales force that
"pushed” its products through distributors to one that
"pulled" them through the channel by selling end users
has to a great extent been accomplished. Further, the
sales force is now "pushing" harder than management would
like.

Table 12 compares region wide sales call per-
centages to the tolerances of the sales manager for
individual salespeople. It can be seen in many regions
that even the average sales call pattern does not fit
within the standards set for an individual within the
region. This dismisses the contention that sales call
patterns "on the average" may balance out. Further,
the argument of being accurate when averaged cannot be
applied tO a sales force where geographical territories
are given as each territory should have the same call
pattern needs.

Area sales managers were also requested to set
managerial performance standards. However, area sales
managers were asked to set managerial tolerances for the
average sales call allocations region wide for each of
their regions.

Table 13 shows the number Of sales regions whose

region wide sales call pattern did not meet the area sales

 

66

 

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0\H O\m M\m O\H H\H O\H «\H .m\o m\._.. Hmuoa

 

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mommuo>m .chHmom muons mummmcmz Hucoflmum mo Hunaaz .NH manna

67

 

 

 

 

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o \ m o \ a H \ m o \ o o \ m H \ m H \ m N.\ m m \ H Hmuoe
em eH vH o o o o o o m a
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68

managers tolerances for region wide distribution Of sales
calls by product line and customer class. While the
percentage of regions whose total end user allocated sales
'calls fall within the tolerances for those regions
decreases, other customer classes do not.

Table 14 records area sales call percentage allo—
cations area wide that do not meet the managerial toler-
ances set by the sales executive. Table 15 shows total
average percentage sales force efforts categories which
are lower or higher than the sales executives managerial
tolerances. It can be seen that, in terms of customer
class allocations Of sales efforts, two out of three
categories were not within the standards set by the sales
executive. Further, six Of the nine product line total
sales effort allocation categories were found to be out-
side the managerial tolerances set by the sales executive.
Only four out of 18 Of the subcategories of end user and
distributors allocated across the nine product lines were
within the tolerances set by the sales executive.

Salespeople were asked to not only report their
beliefs of how they actually allocated their sales calls,
but also how they believed they should have allocated
sales calls. Table 16 shows the number of salespeople,
for each customer class total wishing to change their
sales call allocations. Overall, salespeople desired
to call more Often on end users and competitive distri-

butors at the expense of distributor sales calls.

69

 

 

 

 

 

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Hosanna
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m u C
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70

 

Hauos

 

 

 

 

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30H
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m\H x\H m\H m\H mxH mxH m\H m\H mxH m\H mmaHo
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Hauos O O A O m a m m H
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HHam no: on acuuuuam HHao OOH: ounce mmHam HOng OH moHuoOmuao .mH oHnae

71

Table 16. Salespeople Desiring to Change Sales Call
Allocation Between Customers

 

Higher Lower

 

Average Average % Overall
% Desired % Desired Change
n Increase n Decrease Desired

 

End Users 18 9.61 11 9.45 + 2.38
Distributors 7 9.71 23 7.22 - 3.27
Competitive

Distributors 17 4.47 4 3.25 + 3.00

 

72

Reaction of Upper Management

to Findings

 

/ Massive, detailed findings were presented to the
'sales executive, the three area salesmanagers, and two
executive staff officers of the division. After all
parties had an opportunity to review the data, a half

day meeting of all parties was scheduled. Initially, dis—
cussion centered on management asking the researcher many
questions as to the formulation of the data presented.

As the discussion progressed, management began asking

for the researcher's conclusions about the data. The
researcher, however, consistently refused to make any
judgements as to the proper managerial interpretation of
the data, insisting that interpretation required the sub-
jective knowledge that each manager possessed. Product
line eight was thought to be under reported, and under
presented by the sales force. Management was very
pleased by their ratio of sales calls on end users to
distributors. It was concluded that the push on end user
calls should switch to improving which end user receive
sales calls.

After much discussion, one area salesmanager
identified a number of areas lacking in sales performance.
The area manager proceeded to demonstrate a sales alloca-
tion pattern he believed to be directly connected to
superior performance. The area manager then showed how

his superior salespeople, referred to as "senior people,"

73

demonstrated this pattern, and then showed how in other
areas, which were lacking performance, the other sales-
people did not show this pattern. It was then decided
that an experiment would be set up to test the effects
Of forcing salespeople to follow the exact sales pattern
hypothesized to generate results.

The other two area sales managers denied that
their salespeople had different sales patterns. At this
point, the area sales manager with the hypothesis presented
a side-by-side analysis of his area call patterns versus
the other areas that he had generated to that strongly
backed his contention. The other two area sales managers
said nothing after seeing the number and accepted the
analysis and that they would attempt to match his sales
call pattern.

Management reached a concensus as to the patterns
of sales calls allocations desired. Further, it was felt
that salespeOple comply to the sales call pattern devel-
Oped by management, selling the products believed to be
most profitable by management, rather than blindly react-
ing to the demands Of their territory.

Concluding discussion centered on how the firm
could continue to receive this information. Several
alternative were suggested by the researcher.

An experiment was set up where salespeople in the
area of one distributor would call on one specific cus—

tomer class, showing two chosen product lines. The change

74

in sales of those product lines would then be monitored.
It was strongly felt that who was called on and what
product lines were shown was more important than the
number of calls a salesperson made.

Management found their present system of record-
ing sales calls to need many changes. It was decided
that a few salespeople consistently classified their calls
incorrectly and that a few did not use the provided coding
system. Regional sales managers had been the highest
level Of the organization to receive the call reports,
it was decided to keep a copy Of all weekly reports in
the main headquarters. Further, it was decided to change
the weekly sales call report form to one readable by
computer. This would enable the firm to continue moni-
toring their sales call patterns.

While management of the firm found many issues in
the data presented to act upon, these issues tended to be
minor ones. In fact, the sales force was performing much
better than anyone had anticipated. Most call activity
found to be out of tolerance was due to an over emphasis
placed upon meeting the increased emphasis on end users
sales.

The one action of greatest impact made by manage-
ment was that not to take further action to boost the
number of sales calls to end users. This act has allowed

management to pursue other goals.

75

The researcher kept informal contact with upper
management for several months following the focus group.
Attention has shifted in the firm from concentrating on
(the customer class called upon to product lines presented.
However, upper management is divided as to what a proper
distribution of products presented should be. A major
contribution Of this type of analysis would appear to be
that it forces management to set specific standards for
sales efforts. In setting these standards a firm must
incorporate their understanding of the relationship of
slaes efforts to profitability for the firm.

This particular firm used very little sales call
analysis and only at the lowest levels of management.
The act of providing sales call allocation data to the
firm caused the management of the firm to make decisions
that could only be monitored for implementation by com-
parison Of similar data in a subsequent time period.
Hence, it is the conclusion of the researcher that the
interjection of sales effort data into the management
process Of a missionary sales force will Often create a

continuous need for that data.

Findings With Respect
to Researchguestions

1. Anderson and Hair (1983) in Figure 1 list many
categories of sales effort. It is the conclusion of this

research that for the missionary sales force that "sales

76

calls" variables provide meaningful indications of per-
formance not provided by selling expenses or customer
service. Within the "sales calls" category, the assort-
ment of products presented to each class of customer
should be added. This should also include new products.

2. Firstly, measures Of sales effort are used in
the missionary sales force to measure the compliance of
salespeople to the wishes of management. Secondly, and
even more important, is the fact that in order to inter-
pret sales effort data management must construct specific
standards for sales efforts in each category generated.
Thirdly, the sales effort analysis is a form of communica—
tion between salespeOple and management.

3. Objective measures of sales effort appear to
have replaced subjective measures for the short term. The
interjection of objective measures tend to create an over
reaction to their importance. Evaluation of the mission-
ary sales force, however, will remain for the most part
subjective. The measures of sales effort will enter into
the subjective evaluation and hence be used subjectively.
The develOpment of a quantitative overall measure of sales
effort with which to evaluate sales people is far from

operational.

CHAPTER V

SUMMARY AND IMPLICATIONS

The company selected provided an Opportunity to
examine how measures Of sales effort can be integrated in
present techniques of sales performance evaluation. The
sales force was a missionary sales force as the result Of
shifting sales efforts from calling on their distributors
to calling on the end users Of their product. Inherent
in this decision is the belief that product sales would
be increased by this change in distribution of sales
effort. The first reaction of management was to attempt
to develop a system of sales reporting from their dis-
tributors that would provide the company with sales
result information for each salesperson. The company
is presently developing this ability. However, upper
salesmanagement during this change over found itself
without a quantitative means of performance evaluation.
No mechanism was in place to perform any sales call
pattern analysis.

Management was attempting to implement a change
in sales effort allocations without a means of accurately
measuring compliance. Two distinct types of managerial
error can occur in such a situation. The obvious problem

Of believing that salespeople are allocating their sales

77

78

efforts according to the desires of management, when in
fact the sales force is not in compliance. The second
form of managerial error arises when management believes
the sales force to be not in compliance with their
managerial model of how sales efforts should be allocated,
when in fact they are in compliance.

The sales force under study suffered more from

this second form Of error than from the first. Sales-

 

peOple tended to be above managerial tolerances in areas

management was stressing as important. This over alloca- in

 

tion was at the expense Of areas which were still believed El
important by management, but not emphasized.

Table 9 reveals that 25 out Of 30 salespeople, who
were outside the range Of managerial tolerances for end
users (a category being stressed by management) were above
the level set. Managers underestimated the percent of end
user sales calls by nearly 10 percentage points (9.45).
SalespeOple on the other hand still believed that they
needed to allocate more calls to end users (Table 14,
2.38%).

Sales effort analysis can serve two functions.
Firstly, it can be used to keep a sales management system
functioning within the tolerances set by management.
Secondly, it can be used to monitor improvement as sales
force attempts to comply with a change interjected by

management.

79

Further, sales effort analysis can be applied at
two levels: Firstly, as in the firm studied, at the
upper management level and secondly, to sales force wide
'average reflecting average compliance. While this is a
starting place, it is not the best application of sales
effort analysis. At the sales force wide level, averages
can be deceiving since they may be the average of half
the sales force allocating too little while the rest
allocates not enough. While this may work for sales
forces whose salespeople share territories, anytime
exclusive territories are given, sales effort analysis
should be applied at the territory level.

Upper management treated the data as a strategic
tool. Regional managers were not included or consulted
in the managerial process. The researcher received the
impression that salesperson evaluation, for purposes
of promotion and pay, was performed mainly by the area
sales manager, with the regional acting as a data collect-
ing device. Regional sales managers were treated similar
to foremen in the management of labor. The researcher's
assumption that management would pass information along
to all levels in implementing changes was not realized
initially. Proper application of the implementation of
sales effort analysis to the lower levels of management

would require a longitudinal study.

80

Contribution of Research

 

This research has shown that the analysis of sales
calls, by product lines shown to each customer class, pro-
'vides information salient to the accurate evaluation of
sales performance not provided by subjective methods.
Analysis Of sales efforts was found not to be a substitute
for subjective evaluation, but a complimentary evaluation
technique. Subjective methods of sales performance evalu-
ation are strongly felt to be most helpful in determining
the quality Of sales effort. Sales call analysis is
believed to be most helpful in evaluating the quantity of
sales efforts in various aspects of the sales function.

This research has shown that the use of sales
efforts can provide management information on which
decisions can be made much earlier than waiting for the
effects of a change in sales efforts to manifest in sales
results. Further, sales effort analysis allows management
to define specific standards for performance, and then
have quantitative measures of compliance. Due to the lack
of sales effort analysis, the company studied was strongly
motivating its sales force to make changes that the sales
force had completed nearly a year prior.

This study concludes that, for the missionary
sales force, sales efforts are analogous to sales results,
since the missionary sales person is not attempting to
maximize results in the current, or near current, time

period. Further, the Cravens et al (1972) model can be

 

 

81
extended tO show that factors not under the control Of
the sales person effect sales results (sales territory
performance). Hence, this study supports Wotruba's (1971)
(contention that the evaluation Of sales efforts may be
superior overall to the evaluation of sales results for

evaluating sales performance.

Limitations of the Study

 

This study is limited by a wide range Of factors
which include the following:

1. The application of findings Of this study to
other sales forces must be guarded, as other sales organi-
zations may vary greatly from the one studied.

2. Research is exploratory and only suggests some
possible conclusions.

3. Study ignored all other effort variables
except for the two chosen.

4. Time lags interject an increased threat to

internal validity.

Further Study Needed

 

The exploratory nature of this study creates
as much work to follow as it accomplishes. Among issues
requiring further examination are the following:

1. The develOpment of measures of sales output
for their firm with which Optimal sales call patterns

can be sought.

82

2. An examination of other sales input variables
and their effect on sales output.

3. What information should be reported to each
‘level of salesmanagement.

4. How a sales force reacts to attempts by
management to change sales call patterns.

5. How response to weekly sales call reports I
change once the sales force becomes aware that upper
management has started to monitor them.

6. How the firm eventually integrates sales (*7

 

call analysis into sales performance evaluation.

Conclusion

 

Stanton and Buskirk (1983) listed five sales
effort measures for evaluating a salesperson's perform-
ance: calls per day, days worked, selling time versus
nonselling time, selling expenses, and measures of non-
selling activities. These factors tend to measure
quantity of sales effort. This study was directed at
using sales effort measures to evaluate the quality of
sales performance, and was further directed at the sales
call.

Sales effort analysis can be used as a measure
of the performance of a salesperson. Sales effort
analysis directed at the sales call should include vari-
ables from customer class and products carried. .If either

products or customers are a homogeneous population it can

83

be ignored, but only because it is a variable with only
one level present in the population. Products and cus-
tomer characteristics can each be subdivided, however,
'they are two major categories in the study of the quality
of sales call effort.

Measures Of sales efforts can allow management to
act in a much shorter time span than if sales results or 1

other management feedback on sales performance was waited

K".- - .

for. Morale can be helped by management knowing when

saleSpeOple are performing to standards and not attempting

 

to further motivate the sales force.

The management of a missionary sales force is the
management of sales efforts. The firm may believe in a
strong relationship between those efforts and sales, how-
ever, they have chosen to motivate their sales force to
perform a certain pattern of efforts, and not concentrate
on short run sales. If sales do not follow, it is the
responsibility Of those who directed what the pattern of
sales efforts was, not the sales force. Hence, it follows
that the missionary sales force must be evaluated on their
compliance to the sales efforts requested of them. The
sales efforts of the missionary sales force also then
serve as their sales results. In order to fully evaluate
the missionary sales person, one must analyse these sales

efforts or results.

‘ - .
L: m
I I. if

APPENDICES

 

APPENDIX A

PERFORMANCE APPRAISAL FORMS

86

TOOL DIVISIONS — SALES

©©NFUDENTUAL

PERFORMANCE APPRAISAL SUMMARY

 

 

 

 

 

 

 

 

us! Mm In: Mm Huddle Name Nickname
Social Security No. RC Chu Sol M on. A9.
I l I I
Original Envoy mm Data Cums $0M“ Date
I I I I

 

 

 

 

     

      
 

   
 
 
   

 
 

mnvmmm: m I I w I I

High”: Active

  

Special Training:

Noah School/College or 0.9," or
EDUCATION: “MW" ”W Major Subpcn

EMPLOYMENY: (Since school. coho” or university in

°"” mum rm.
From-To

 

 

Comm 90.5000 Tm. Position Analysis Current and Completed

VnD MU

 

 

Date Started m Current Position
I I

Reports to (Mom and 1m.)

 

 

 

 

 

film ' Gut!

 

 

Date Name
Dan 00 1mm hound; I I .y,

 

 

 

 

 

 

87

 

WMM'eMuJabEm (Marleen-aerbvereeleveaeaeeueaarahalml

 

 

 

 

 

 

What enecllie Wu! action! have you eaten with on: employee during rho near year:

 

 

 

 

How would you rate thin employee in the following areae? Ueaaddieional eaaaa lor any mu. (Review hour by m oneallaeoraieal worksheet)
l abnormally below standard 3 standard 8 Manually above standard

2 below standard 4 above standard

 

Job Knowledge __._

Sell Management 0! Job/Disciplme

 

Managing Distributor Relationships

Waning End User Relationship:

Product Knowledge

Sales Expertise

Relationship: with Management Personnel of End User Acwunrs

Observation and Judgment

 

Problem Solving/Decision Malling

 

Conflict Resolution

Communicating with the Plum. Peers. Supervisors

 

U. M Resources Available

uranium: and Drive

‘ A

Thelollowing itemdlould he oornoierad by We Only

”tie-ling and Controlling

Achieving Group Effectiveneee

Creativity and lnnomion __

Page!

88

 

MelorAeoWWinP-tYear (Ioeiewlnputbyelnployeeoneefluerablworkmeetl

 

 

 

 

 

 

 

 

Significant Areae for Prolewional Improvement (Review input by eraployea on eel! appraieal wo.l:eheet)

 

 

 

 

 

 

 

 

 

 

 

 

Following to be eernpleted during interview:
Beepomibilittee which can be included in preeent job to lead in direction oi weer intereat:

 

 

 

 

 

 

Development Action Plan for the Next Var (Review input by employee on to" entrain! worksheet)

 

 

 

 

 

 

Employee's Comment on the Action Man-

 

 

 

Ieoormnendation tor MW; (ripen)

 

Employee's eipeture and dare:

 

Page J

89

WT succession W6 MW

 

“OHM “Tm;

 

POIENTlAL MING:

 

PROMOTASLE TO.

 

ISMCEMENT NO 1 :

 

IEHACEMENT NO. 2:

 

ADDITIONAL COW:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Length at rune I have euperyraed true etholoyee'
Name Tnle Date
Prepared by: I I
W
leviewed by appraieer‘e m1. eupennaor; ‘hrle Date
Marne I /
W:

 

 

 

90

July l982

DISTRIBUTOR SALES 8 MARKETING

Self-Appraisal Worksheet

 

Name: Job Title:

 

Region:

 

The appraisal process is intended to help both you and the organization.
Completing this worksheet and returning it to your supervisor will con-
tribute.to your appraisal later in the year in two ways:“

It will assure your viewpoints are considered as
your performance is appraised.

it will help make your appraisal interview more
productive.

If you need more Space for any item, please use a separate sheet of paper
and attach it to this form.

SEETlON l -- KEY J08 ELEMENTS: Describe your job as you see it in terms

of key elements. Other words meaning about the same are: major
responsibilities, primary duties, or important functions. Here are some
questions to help you identify the key elements of your job: What important
results are expected of you? What does your supervisor emphasize? On what
things do you spend a lot of time and effort? What important things

would not get done if your job did not exist? If you superVise others,
include the following job elements: Organize and Plan, Communicate Informa-
tion, Work with Others, Meet EEO Responsibilities, and Develop Subordinates.
Even if you do not supervise others, you may use these elements ij_they apply
to your job.

 

 

 

 

 

 

 

 

 

 

91

SECTION Ii -- MAJOR ACCOMPLISHMENTS: Review each job element and note any
contributions you have made. These may include an important problem
solved, an idea successfully implemented, an improvement in your job,
the accomplishment of a work goal, or the successful completion of a

difficult assignment.

 

 

 

 

 

 

 

 

 

SECTION III -- PERFORMANCE DIFFICULTIES: Review each job element and note
”trouole spots" -- things that happened that made you less effective than

you could be. Note any support you need to remove these difficulties.

 

 

 

 

 

 

 

 

92

HOV WOULD YOU RATE YOURSELF IN THE FOLLOUING AREAS? USE ADDITIONAL SPACE
FOR COMMENTS.

I substantially below standard A above Standard
2 below standard 5 substantially above standard
3 standard

 

Job Knowledge

Seleranagement of Job/Discipline ____

Managing Distributor Relationships _____

Managing End User Relationships _____

Product Knowledge ____

Sales Expertise

Relationships with Management Personnel of End User Accounts
Observation and Judgment

Problem Solving/Decision Making_____

Conflict Resolution

Communicating with the Plants, Peers, Supervisors
Use of Resources Available

Aggressiveness and Drive

 

The following three items should be completed by Managers only

Motivating and Controlling
Achieving Group Effectiveness

Creativity and Innovation

93

SECTION 'V -- ACTION PLANS: Thinking through your job elements, accomplish-
» ments. and performance difficulties allows sound action planning. Jot

down you ideas as to the type of develOpment you feel you need to be more
effective on the job -- now and in the future. Use these guidelines.

Action plans should consist of things you can do to
increase your effectiveness or remove performance
difficulties.

Action plans should be specific enough so that you
know when they have been accomplished.

Action plans should indicate whether training or
education would be helpful.

During your performance appraisal later this year you and your supervisor
should spend enough time discussing these plans to assure they are
realistic and in line with other goals of your sales team.

 

 

 

 

 

 

 

 

 

 

 

94

SECTION VI-- CAREER GOALS: Describe your short and long range career goals
and relocation interest, if any.

 

 

 

 

 

 

 

 

 

SECTION VII-- ADDITIONAL COMMENTS: If there are further questions or points
you would like discussed in your appraisal interview later this year, note
them here.

 

 

 

 

 

 

 

 

 

Signature: Date:

 

 

APPENDIX B

DATA COLLECTION INSTRUMENTS

 

96

 

unintuitive
comm DAT!
ndonoa March d. 1933
10 snow
Field Sales Personal -
00
Regional Hanagere
Area “angers
Druce Buskirk
saucer

Call Report lvaluation

 

Some of you are aware that we have computerised all call repute for the lat eighteen maths.
This is not true for every salesman's situation as we did not have the benefit of eighteen months,
but the majority were for an eighteen month period. We are interested in looking at the patterns
that are established in terms of the types of businusee whether it be end-user, distributor or
competitive distributor as well as looking at the call relationship to the types of products we
offer. In reality, this becomes a time-management exercise. We hope to draw some correlation at
some future date between penetration factors and our time-management hsues. On the short-
term basis, this information will be fed back down to you for your evaluation and your planning
efforts arotmd your territory management program.

Data has all been compiled. Now we are interested in your perception of your activity. Attached
you will find two sheets. One to be filled out as to how you perceive it really is. The seccmd is
how you perceive that it really should be. At the top of the sheet is a blank line for division.
Please answer all the divisions you represent and do it by brand. In other words, if you represent
° t - If you represent all the brands, please

put in all the brands. Do not go back and review your call reports. We are interested in your best
estimate or best guess only. If you spend more than five or ten minutes on this exercise, you are
spnding too much time. I would hope you would immediately upon receipt of this memo fill out
the, form and return it to your Area Manager here in . I would like them back in

’ by March 18th. Again, 1 hope you will immediately turn it arotnid as we are not looking
for a lot of your time - merely your best guess.

We have wanted to undertake this exercise for quite some time. Unfortunately, we have just not
had the funds to accomplish the effort. We are fmtunate in the gentleman copied above, Bruce
Buskirk, is working toward his Doctorate - . - He has chosen the .
Divisions to be a part of this doctoral presentation. Therefwe, it has been his personal time and
the resources of Kent State supporting us. 'ihe short time constraint, imfortunately, is dictated by
his doctoral presentation. He has put forth hundreds of hours on our behalf and thousands of
dollars. Therefore, 1 do want to support him with our best effort. Again, we need this in

as soon as possible.

Thanhyou

Attachments

97

Division

Ihortly you will be receiving tables of what product lines you showed
to each contour classification during the first seven nsnrho of ”I2. In
order to gage the value of such infer-ation, it to necessary to obtain your
perceptions of how you allocated your sales presentations during that period.
First, allocate how you believe 100 calls chosen randoa fron this tine period

would be distributed mg the following custoner classes:

liner A.
Distributors I.
count . Dist rib. c.
Other ' D.
"'165"'

Secondly. fill in a. econ. above u to. correspondingly lettered .
blanks below. This represents the percent of effort you allocated to each
of these costs-r classes. low dtvtde that degree of effort sung the product,
lines that you presented. llehe sure that the nuders in each colt-i add up to

the nu-ber of calls that you allocated to that custoner class.
Product Lines
Con.

Deer Dist. gist . Other

 

 

 

 

 

98

 

Interoflioe
com DA“
SPOIIMC. llarch d, 1933
10 "OI
Regional ldanagers 2. -.
CC
Area Id
Bruce Buskirk
m
Call Report [valuation

 

loch of you is aware that Iruco Dmhirb from Kent State has been working this for us.
Considerable effort and reamuces have recently been expended in compiliq the sales call pattern
for each sales person ad sales region in the ' ' Tool Divisions. Folders
containing this information are currently being held for you in the - headquarters.

However, before this information ca be forwarded to you for review, the followiq information a
your beliefs slag with your allocation of sales efforts must be filled out in full ad returned to
your Area Haager. Do not spend time searching for the informatia, but provide your best
estimate or guess. Thh form should take our sales people about five minutes to fill out ad the
Regional Managua shout twenty minutes to fill out.

I
I. .

it is imperative that these forms be returned by llarch ldth to emure complete dissemination of
call pattern folders presently on bad in I think you are going to find this exercise
very, very interesting. Also, you will find it a very valuable tool in your regional sales
management plans.

1 am forwarding the salesmen's forms directly to them in the essence of speed. I am also going to
ah they rotten them directly to - There are no right or wrong anewera- merely
opinions. Therefore, I see no reason for consolidation coming back up the line.

incidentally, Bruce indicated he may be calling each of you around the middle of March. Be is
veryinterestedinthesuccsssofthisprogram not onlyinsitpportingoureffortshereat . ~‘but
also for other reason that are importat to his individual project at Kent State.

Thabyou.

Attachments

99

Division

lhortly you will be receiving tables of what product lines you showed
to each custoner classification during the first seven soothe of lddz. In
order to gage the value of such infer-ation, ft is necessary to obtain your
perceptions of how you allocated your sales presentations during that period.
first, allocate how you believe 100 calls chosen randos fron this tine period

would be distributed anong the following custoner classes:

[her A.
Distributors I.
cooper. bistrib. c.
Other ' n.

illll

Secondly. fill in the uni-acre above in ca. correspondingly lettered .
blanks below. This represents the percent of effort you allocated to each
of these custoner classes. low divide that degree of effort along the product,
lines that you presented. lobe sure that the nowhere in each colunn add up to

the nuaber of calls that you allocated to that custoner class.
Product Lines
Gama

Deer Diet. Diet

 

h

 

 

 

100

Division

d—.-. —-

Now repeat the same process for how you believe you
should have allocated your sales presentations among customers
and products. If you believe that you distributed your calls
as you ideally should have you may mark the following box and
skip this page.

' I would not change my sales effort allocation

User A.
Distributors D.
Cospet. Distrib. C.

Other D.
100

Product
Lines

User Dist. Dist. Other

 

101

Division

 

On this one. out the lowest percent of effort you
would expect fros seasons working in the above division
to allocate to each categories below. then put a dash and
the highest percent of allocated sales effort that you would
expect. this differs fro. the previous questions in that

on this fors nothing seeds to add up to the total of anything
else.

lint d.
Distributors D.
Oowet. Distrib. C.
Other D.

Product
Lines

ser , 2i_s;.

II Ill III IMI I

Other

APPENDIX C

SALES ACTIVITY REPORT

103

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REFERENCES

Anderson, R. E., 5 Hair, J. F. Sales mana ement: Test
with cases. New York: Random House, I955.

Anthony, R. N., & Reece, J. S. Accountin rinci les.
Homewood, 111.: Richard D. Irwin, E979.

Abell, D., 8 Hammond, J. Strategig market planning.
Englewood Cliffs, N. J.: Prentice Ha , 79.

 

Adkins, R. T. Industrial marketing management. Evaluat-
ing and Comparing Salesmen's Performance, I979, g,
-212o

 

Balsley, R. An investigation of the relationship between
information type and controI’strategy in sales
force management. Unpublished doctoral disserta-
tion, University of Texas, Austin, 1980.

 

 

 

Bagozzi, R. P. Toward a general theory for the explana-
tion of the performance of salespeople. Unpub-
lished doctoral dissertation, Northwestern Uni-
versity, 1976.

 

Beik, L., & Buzby, S. Profitability analysis by market
segment. Journal of Marketing, 1973, 48-53.

Beswick, C. A., & Cravens, D. W. A multistage decision
model for salesforce management. Journal of
Marketing Research, 1977, 11' 135-114.

 

Bowersox, D. J., Cooper, M. B., Lambert, D. M., & Taylor,
D. A. Management in marketing channels. New
York: McGraw-HiII, 1955.

 

 

Buzzell, R., Gale, 3., & Sultan, R. Market share: A
key to profitability. Rarvard Business Review
1975, §§(l), 97-106.

 

Cocanaugher, B., & Ivancevich, J. BARS performance rating
for sales force personnel. Journal of Marketing
1978p 22" 87-95e

 

106

Conference Board. Measuring salesmen's performance.
Studies in Business Policy, 1965, 114,

Cotham, J. C., & Cravens, D. Improving measurement of
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