How to Measure the Effectiveness of Your B-to-B Assigned Account Sales Reps
I’m often asked how to structure and reward a team of dedicated sales reps. Specifically, these are reps who are assigned a number of accounts and have the responsibility of penetrating, retaining and growing relationships.
One of the first questions I get is, “How many accounts should be assigned to such reps?” The answer depends on the nature of the assigned account. If it’s a large, national account with many locations, fewer will be assigned. If the group of assigned accounts is a basket of A,B,C producers with varying levels of work involved, then 100 to 300 accounts in a territory is normal. I’ve seen reps with just one national account, and I’ve seen reps with 500. How many depends on what you’re assigning.
Given that most assigned B-to-B reps should have the ability to negotiate or quote price within a pre-established range, I’d use net margin generated to evaluate such reps. I’d also allocate to their individual cost centers costs for all the marketing materials (catalogs, mailings, etc.) and other variable costs that are “spent” on their accounts.
Over the course of a month, quarter or year, I’d evaluate their performances on the following:
* sales growth vs. prior period, overall company and control territory;
* net margin growth vs. prior period, overall company and control territory;
* net contact additions;
* inactive (more than six months) accounts/sites;
* orders, average order value, lines per order, units per order;
* time spent on calls vs. time paid (if they’re not talking, they aren’t selling);
* growth in number of accounts buying from multiple product categories;
* call quality (evaluated through monitoring); and
* organizational contribution (that’s if they’re growing their territory, but creating havoc everywhere else — then that’s not what you want).
Of course, their overall performances are judged on the balance of all these items and no single item. An effective commission plan rewards them for a balanced achievement on these measures.