Input and Output Driven Sales Personnel Performance Measures: Insights from an Experiment

Abstract

It is a globally accepted strategy that, retaining existing consumers is significantly costeffective than focussing on acquiring new consumers. In brick-and-mortar retailing, salespersonnel play the most important and complex role whereby they are the ones who areconnected to consumers directly on a real-time basis. It is observed that the majority ofbrick-and-mortar retailers in India use measures to measure sales personnel performancewhich is mathematically derived numbers viz. average transaction value (ATV), averagebasket size (ABS) and contribution margin percentage (GM%) and these are all outputdriven measures. Such output driven measures are making the sales personnel’s rolefurthermore complex and in turn, their focus is expected to have shifted from consumerneeds to these output driven measures set by their management. In this research, we havecarried out an experiment using input driven measures viz. category invoice penetration(CIP) and invoices/bills generated by the sales personnel per day and evaluated the change in(a) sales personal attitude towards consumer orientation and (b) overall store profitability.