3 ms·
> The productivity of a salesperson is also easy to measure: sales / compensation and travel costs. It's not that simple, because most companies don't perform
by etripe 6y ago
> The productivity of a salesperson is also easy to measure: sales / compensation and travel costs.
It's not that simple, because most companies don't perform inter-departmental cost accounting. A salesperson might seem to be very productive, while actually selling made-up solutions that are very cost-intensive to implement. To get a real number on how productive they are, you would need to measure:
([sum of sales * price] - [sum of solutions sold * implementation cost]) / compensation
or even:
customer price * weighted average of per-deal profit margin / total compensation
The cost to implement isn't added value. This kind of internal debiting would also change how management looks at IT. If they can solve the problem for less than the estimated cost by the salesperson, they're turning a profit. If they're taking longer due to "science fiction" products being sold, the blame lies squarely with sales. As it is now, salespeople are mainly incentivised for units sold and total price for deals made. You can be a rockstar salesperson while simultaneously mainly causing huge problems downstream.