Evaluating a Successful ISP Sales Force

It is important to provide your ISP's sales team with frequent evaluations. While most in your office get an annual or semi-annual review, the sales force should receive quarterly evaluations.

by Brock Henderson Brock Henderson & Associates [June 10, 2002]

Many companies have sales goals, (a.k.a. quotas), for their sales people, but is that the best way to judge a salesperson?

Let me say right off the bat that I am not advocating the elimination of sales goals. Salespeople need those goals both as a measure to strive for (i.e., motivation) and as a measurement of success (i.e. self-evaluation). However there are other elements an ISP must consider when deciding who the "best" salesperson is (whether and how to name the "best" salesperson must be the subject of another article).

For example, given a sales goal of one million dollars, which is better: (a) the salesperson who makes his or her quota by selling to existing customers or (b) the salesperson who makes their quota by selling half to existing customers and half to new customers. If you look only at the sales volume, you miss the fact that the second salesperson brought in new customers who will generate additional sales to the company in the future, and help to grow the business.

By the same token, what about the salesperson who has up-sold an existing customer? If you have a customer who would usually purchase $10,000 in products and services, but the salesperson has moved them up to $15,000 in products and services, doesn't that count as special too?

Finally, there is the element of customer satisfaction. Customers need a certain amount of "hand holding" from the salesperson, although some need more than others. When considering evaluations, the point is that customer satisfaction is yet another element that must be considered.

Which is better, (a) the salesperson who doesn't always meet the sales goal, but keeps customers very happy and loyal; or (b) the salesperson who always makes the goal, but with average customer satisfaction. Obviously, the highly loyal customer is worth much more to your business in terms of repeat business and referrals than a non-loyal customer, so some allowance should be given the salesperson for their developing that loyal relationship.

As you evaluate your sales people look at the following elements in deciding just who deserves a special reward and who doesn't:

1. Total sales generated
2. Number of new accounts created
3. Amount of up selling accomplished
4. Level of customer satisfaction

One point to keep in mind—especially if you are building a new sales team—is that any "goal" you may establish is only an educated guess. If the salesperson fails to make their goal it is either because (a) the salesperson failed to produce, (b) you overestimated what could be sold, or (c) a combination of both.

Total sales generated—Using the past two to three years of sales as a guide, you can project sales for the upcoming year. If you have an existing sales team, you can basically divide the projected sales among the sales staff. However, if you are just creating a sales staff don't expect them to accomplish as much as the whole company had been doing without a dedicated salesperson.

Number of new accounts created—I would approach this not from a revenue perspective, but rather from a quantity perspective. You go after new accounts to increase revenue, but existing accounts can be up-sold and new accounts become existing accounts very quickly. Another point to remember is that frequently a company will give you a small portion of their business in an effort to "test" your product/service/support, so one little new account could become one very large account in the not too distant future.

Level of up-selling accomplished—Let's say you have a customer that has your $50 web hosting service and a couple of dial-up accounts. Through good salesmanship and routine monitoring of the accounts usage, your salesperson may very well be able to up-sell the customer to a dedicated line and the $150 web hosting service. This little bit of up-selling has basically tripled your revenue on the account, creating increased revenue for years to come. That bit of up-selling is worth some sort of reward.

Level of customer satisfaction—This is the hardest area to evaluate because you can't attach quantitative numbers to it as you can in the first three areas. Yet, this is still a very important area because satisfied customers don't leave, satisfied customers will give referrals, and satisfied customers will provide testimonials—which are invaluable marketing tools.

Probably the best way to evaluate customer satisfaction is through periodic customer surveys. While not 100 percent accurate, the surveys should be able to alert you to problem areas or problem salespeople. Be sure to take advantage of open-ended questions such as, "What (if any) problems have you encountered with our company?" and "What do you especially like about our product/service?" These questions allow customers to express themselves openly and freely and should better identify existing or potential problems as well as areas of excellence.

The proper mix of the above four elements will of course vary from ISP to ISP and from region to region, but all of these elements are important to the success of any business. Looking just at sales is myopic and is not rational. Each one of these four areas is crucial to the financial health of your ISP, and all should be incorporated into evaluating the degree of success of your salespeople.

—End