Deck 13: Evaluating Sales Force Performance

Question 1

The most common objectives are the attainment of specific sales revenues, contribution profits, market shares, and expense levels.

Answer 1

True

Question 2

Net sales revenue minus variable cost equal direct fixed selling costs.

Answer 2

False

Question 3

When 20 percent of the sales come from 80 percent of the buyers sales managers should suspect that they are losing money serving small accounts.

Answer 3

True

Question 4

Your company manufactures basic widgets, modified widgets called "wadgets," and a high-performance widget called the "wodget." The industry sales ratio for the three lines are widget-70%, wadget-20%, and wodget-10%. You learn that while your company is selling 70 percent basic widgets, they are still $500,000 under their forecast for this line, while unit volume is right at expected levels (i.e., 100% of quota). This fact suggests they should revise their forecast rather than working harder to sell more widgets.

Question 5

Cost-of-goods-sold figures should not be used in a sales analysis because sales managers have no control of them.

Question 6

Industry sales figures and standards are useful when evaluating sales by product lines.

Question 7

National advertising and production costs are typically directly controllable by sales managers.

Question 8

The first step in a sales force evaluation model is to set goals and objectives for the sales force.

Question 9

An assessment of sales results is usually very rare in evaluation systems.

Question 10

Another tabulation that is useful to sales managers is to break sales down by customer.

Question 11

Evaluation is essentially a comparison of sales force goals and objectives with actual achievements in the field.

Question 12

Both controllable and uncontrollable costs are figures that are directly relevant to field sales managers.

Question 13

In analyzing sales figures to evaluate performance, unit sales are useful when inflation, deflation, and other price changes distort dollar figures.

Question 14

A sales force evaluation model does not include taking corrective action.

Question 15

Another way to identify problem areas from performance data is to look at sales by product line.

Question 16

One specific sales breakdown is usually sufficient to give a manager a clear picture of the field.

Question 17

Once performance standards are set, the next step is to create key indicators of key success variables.

Question 18

Sales and cost data can be combined to show the effects of changes in selling tactics on the profitability of the firm.

Question 19

According to the iceberg principle, 20 percent of the territories, products, or customers produce 80 percent of the revenues.

Question 20

The 80-20 principle suggests that marketing efforts should be concentrated on a majority of customers.

Question 21

Behavioral measures of performance are usually more effective for salaried work forces.

Question 22

The development of Behavioral Observation Scales (BOS) requires specific job dimensions and critical incidents for each level and type of sales job.

Question 23

Territorial sales data can seldom be a useful guide to help solve problems that lie under the surface of performance figures.

Question 24

In a cost and profit analysis, the profit contribution figure shows how much price-cutting and sharing of commission is being employed by salespeople to move the products.

Question 25

One significant problem with successful implementation of behavioral control systems is that there is no reliable mechanism to gather the necessary information.

Question 26

Contribution margin minus direct fixed selling costs equals variable cost.

Question 27

Call reports do not allow sales managers to set activity objectives for individual salespeople.

Question 28

As a sales manager, it is often useful to conduct a cost and profit analysis. This analysis starts with gross sales revenues because returns, bad debt accounts, and allowances must be taken into account in order to more accurately assess salesperson performance.

Question 29

Detailed call reports allow sales managers to set activity objectives for individual salespeople and then measure results.

Question 30

Outcome evaluation systems are recommended in industries where the salesperson has a substantial influence on the results.

Question 31

Although a sales analysis provides managers with useful data, it does not reveal the effects of price-cutting or the differences in selling costs, potential, and saturation that exist across products or territories.

Question 32

A call report that shows the relationship between some predetermined plan and actual performance is an example of management by objectives.

Question 33

Behavioral based control systems are primarily concerned with tracking one key outcome factor.

Question 34

One can look at sales results by breaking them out by territories.

Question 35

One problem with using sales results in evaluating salespeople is that they do not adequately measure conditions faced by salespeople in the field.

Question 36

Analyzing a territory's contribution margin is an example of a profit-based evaluation.

Question 37

The primary disadvantage of MBO systems is that considerable time is required to fill out the necessary call reports.

Question 38

Once sales managers have reliable measures of potential, the next step is to convert these numbers into planned sales figures for each territory.

Question 39

Performance evaluation can only be accomplished by objective performance measures.

Question 40

Behavioral measures are recommended when the sales environment is competitive.

Question 41

Sales performance evaluation is essentially a comparison of:

A) sales force goals and objectives to actual achievements in the field.
B) sales force goals to actual objectives in the field.
C) sales force goals and objectives to anticipated achievements in the field.
D) sales force goals and objectives to past achievements in the field.
E) sales force goals to past objectives in the field.

Question 42

ABC Corp. operates in an industry where prices for their products are rapidly falling due to aggressive discounting. One strategy to compare results from last year to this year is to analyze:

A) sales in terms of units.
B) sales by territory.
C) growth in number of distributors.
D) expense ratios.
E) none of the above would help in the analysis.

Question 43

Which of the following is generally not a useful task performed by the sales manager or someone in the sales department.

A) sales performance analysis.
B) cost and profit analysis of sales calls.
C) behavioral control analysis.
D) an analysis of controllable expenses.
E) none of the above (all are useful).

Question 44

The concept that sales figures reveal just a small fraction of the larger problem is best known as:

A) micro theory.
B) "blinder" principle.
C) 80-20 rule.
D) experience principle.
E) iceberg principle.

Question 45

The gross margin percentage achieved by salespeople shows a salesperson's ability to increase revenue.

Question 46

Aggregate performance measures include sales, days worked, calls, orders, and expenses.

Question 47

Managers should employ industry sales figures to:

A) place fixed quotas on their sales force.
B) uncover product line problems.
C) determine who the customers really are.
D) to group customers by industry type.
E) sales managers have very little use for industry sales figures.

Question 48

The relative performance efficiency index allows sales managers to review and compare the accomplishments of their sales force along several input/output dimensions simultaneously.

Question 49

The four-factor model is useful for evaluation because it only measures a salesperson's input efforts.

Question 50

Controllable costs often interest sales managers most because:

A) they are convenient due to their fixed nature.
B) they are the only costs that can be calculated.
C) they are the only costs that a sales manager can influence.
D) they always account for the most costs.
E) all of the above.

Question 51

The data used in ranking procedures can be used to provide an overall measure of salesperson efficiency.

Question 52

Which of the following is not part of the sales force evaluation model?

A) set goals and objectives for sales force
B) design sales plan
C) set performance standards for individual salespeople
D) measure results against standards
E) none of the above (all are part of the sales force evaluation model)

Question 53

The idea that marketing efforts should be concentrated on few customers and products is best known as:

A) the oligarchy principle.
B) the oligopoly principle.
C) the 80-20 principle.
D) the 20-20 principle.
E) the Westinghouse principle.

Question 54

You were asked to develop a sales force evaluation system by your boss. The first step in this process is:

A) Decide how the goals will be achieved.
B) Set performance standards for different levels of salespeople.
C) Set performance standards for individual products.
D) Decide what you want the sales force to accomplish.
E) Look at the differences between performance standards and hypothetical results from future sales.

Question 55

What can cause a company's market share to decrease when its sales are increasing?

A) product deficiencies in terms of performance or reliability
B) sales force may not be calling on the right prospects
C) aggressive selling by competitors
D) not enough salespeople or sales offices
E) all of the above

Question 56

The term "buying customers" refers to excessive entertainment of the buyer in order to increase sales.

Question 57

An example of controllable costs would be:

A) overhead and depreciation.
B) wages and depreciation.
C) wages and travel.
D) travel and depreciation.
E) travel and overhead.

Question 58

Each of the following is a part of the sales force evaluation model except

A) setting goals and objectives.
B) designing sales plans.
C) measuring results against standards.
D) evaluating corrective actions.
E) Create indices of key success variables

Question 59

The sales-to-quota measure shows how well salespeople control prices and sell the right mix of products.

Question 60

As a sales manager, you will be expected to respond quickly and correctly to problems and opportunities as they arise. Let's assume that you've recently been hired by such a company and that your analyses reveal the firm to be suffering from the "80-20" problem. Which of the following is/are not an acceptable response on your part?

A) switch the large-volume accounts to the Internet.
B) give the small accounts to independent distributors.
C) provide extra service to the large accounts.
D) shift low-volume accounts to a telephone reorder system.
E) none of the above (all are acceptable)

Question 61

Contribution margins are usually expressed as:

A) percent of sales.
B) percent of company profit.
C) percent of controllable expenses.
D) percent of indirect expenses.
E) all of the above.

Question 62

If you, as the sales manager, were given the task of implementing a method to keep track of field representative activities, which of the following would be best course of action? "I would institute…"

A) quotas.
B) daily call reports.
C) spot checks.
D) MBO.
E) Online customer buying capabilities.

Question 63

Behavioral based control systems are primarily concerned with:

A) minimizing expenses.
B) increasing sales volume.
C) controlling profit margins.
D) tracking steps in the selling process.
E) none of the above.

Question 64

When a territory's sales are increasing, but the sales level is only 50% of potential, a possible explanation is:

A) the salesperson is poorly trained and needs additional assistance.
B) the salesperson is new to the territory and has not had time to develop it properly
C) the territory is under heavy competitive pressure.
D) only a and b of the above.
E) all of the above.

Question 65

The biggest drawback to MBO programs is that:

A) they require a lot of sales manager's time.
B) there is little understanding of how to implement the program.
C) there is little agreement on which managers should be included in the evaluation process.
D) most goals do not lend themselves to quantitative measurement.
E) all of the above.

Question 66

You are the sales manager of a large company that produces and distributes fresh baked bread to grocery stores. You have a sales staff of 83 field reps. Which of the following methods would be best suited to maximize your information gathering process?

A) review of the expense accounts (gasoline receipts and so forth) submitted by your field reps.
B) initiate a system of daily call reports.
C) use the bakery department records to monitor the sampling activities of the sales force.
D) periodically travel with the field reps.
E) capital market structure.

Question 67

Managers who control stockbrokers, insurance and other salespeople commission tends to emphasize ______________measures of performance.

A) outcome
B) input
C) regression-based
D) behavioral.
E) none of the above.

Question 68

Sales force appraisals are important to a sales manager because they provide:

A) evidence for disciplinary action.
B) opportunities to motivate salespeople
C) determine raises.
D) determine adjustments to territories.
E) all of the above.

Question 69

An assessment of sales results is common in evaluation systems. Assume that you find that 20 percent of the territories, products, or customers produce 80 percent of the revenues. What conclusion(s) can you draw?

A) This situation might represent a misallocation of selling effort because the concern is with the number of customers rather than the potential of each prospect.
B) This situation suggests that marketing efforts should be concentrated on a few customers and products.
C) This situation suggests that marketing efforts should be spread evenly across all areas.
D) Both a and b of the above.
E) None of the above.

Question 70

All of the following are common types of individual goals for salespeople except:

A) days worked.
B) calls per day.
C) gross margin percentage analysis
D) sign placements.
E) displays set up.

Question 71

Contribution margin minus direct fixed selling costs equals:

A) variable.
B) fixed cost.
C) direct selling cost.
D) contribution profit.
E) income after tax.

Question 72

As the sales manager, you have a difficult time assigning sales credit for a successful sale. In this situation, it is best to:

A) use an outcome evaluation control system
B) use a behavioral evaluation control system
C) use management by objective control system
D) use behavioral observation scales in your control system
E) none of the above, there is nothing you can do to improve the situation.

Question 73

Focusing on the different types of activities carried out by field representatives is an inherent part of:

A) behavioral control systems.
B) outcome control systems.
C) output management.
D) territorial management.
E) portfolio management.

Question 74

With this method, salespeople and sales managers jointly set personal development targets for the subordinate to be completed within a specific time period. This method is called:

A) TOM.
B) BOS.
C) MBO.
D) MIS.
E) QFD.

Question 75

Which of the following statements is/are true regarding behavioral observation scales?

A) inputs for the program are given exclusively by the salesperson.
B) it is a very time consuming process when compared to MBO systems.
C) it focuses on identifying a list of critical incidents that lead to job success.
D) two of the above, and they are a and c.
E) two of the above, and they are b and c.

Question 76

"MBO" stands for:

A) manager of operations.
B) manager of business objectives.
C) management by objectives.
D) management by opinions.
E) none of the above.

Question 77

All of the following are popular ways of looking at sales results, as discussed in the text, except

A) checking total sales revenues.
B) sales by territories.
C) sales by products.
D) sales by customer type.
E) All of the above are popular ways of looking at sales results.

Question 78

Net sales revenue minus variable cost equals:

A) variable cost.
B) contribution margin.
C) direct selling costs.
D) contribution profit.
E) income after tax.

Question 79

Which of the following market condition would you use a behavioral evaluation control system?

A) customers need information
B) competitive sales environment
C) there is a need to protect the brand image
D) customers trust the salesperson
E) customers need lots of information

Question 80

Which of the following is/are possible reasons why a manager may institute behavior based control procedures?

A) it leads to more knowledgeable and expert salespeople.
B) it encourages salespeople to achieve company goals.
C) it greatly reduces the amount of time salespeople are expected to spend planning their calls and on sales support activities.
D) two of the above, and they are a and
E) all of the above.