How to Develop an Effective Sales Report Card?
How to Develop an Effective Sales Report Card. Are you concerned that you are not monitoring the performance of your company’s salespeople properly or effectively? Would you like to have a “report card” that can help you gauge the effectiveness of each salesperson’s performance? What should this report card look like?
Report card frequency and time frame(s)
The first questions to answer when designing a sales report card are:
- How frequently do you want to produce a report card?
- What time frame(s) do you want the report card to cover?
Here are some additional questions that will help you zero in on useful answers to the first two questions:
- What data do you have on hand that can help you measure sales performance?
- How often is this data updated?
- How difficult is it to extract the data from your company’s systems?
- How much advance notice do you want of potential sales performance problems?
As you might imagine, the more frequently you examine sales performance, the sooner you will learn about potential performance problems. More frequent inspection will also give you more lead time to take action to correct sales performance problems before thy become critical (i.e., job threatening). The trade-off is the cost of time and resources that must be invested to compile “report card” data. If you have results, measure results. The simplest and most accessible measures of sales performance are the results produced by each salesperson. You can measure sales results by answering the following questions:
- How much revenue did the salesperson generate?
- How did this revenue compare to the salesperson’s budget?
- How much gross profit did the salesperson generate?
- How did this gross profit compare to the salesperson’s budget?
This part of the report card might contain the following data elements:
- Actual Revenue $
- Budget Revenue $
- Revenue Delta $ (Actual Revenue $ – Budget Revenue $)
- Revenue Delta % [(Actual Revenue $ – Budget Revenue $)/Budget Revenue $]
- Actual Gross Profit $
- Budget Gross Profit $
- Gross Profit Delta $ (Actual Gross Profit $ – Budget Gross Profit $)
- Gross Profit Delta % [(Actual Gross Profit $ – Budget Gross Profit $)/Budget Gross Profit $]
Do you agree that the above data elements will give you a good “at a glance” feel for a salesperson’s performance? If you don’t have results (or ENOUGH results), measure ACTIVITY Unfortunately, for many salespeople results do not tell the whole story. What do you do if you don’t like the results a salesperson is producing? What do you do when a salesperson shows some flashes of ability, but his or her performance is not consistent? How do you determine what the problem(s) might be? For that matter, how do you determine whether a brand new salesperson is performing enough of the right activities to meet his or her 30, 60, and 90 day performance goals?
If you don’t have results to measure, or if you are trying to trouble-shoot why a salesperson is not producing enough results, you need to inspect the salesperson’s activities.