What KPIs make up the sales performance?

The sales department is a typical income center in the organizational structure of an enterprise, and the final profit level of the enterprise is reflected in the sales volume and sales price of the sales department, which is the key department for the ultimate success of the enterprise. Under the condition of buyer's market, sales is the most important business activity of an enterprise. Whether an enterprise has a reason to exist depends on whether its products can be sold; Whether an enterprise can grow and develop depends on whether it can better meet the market demand than its competitors, so how to effectively motivate sales staff is a realistic problem that enterprises pay attention to. The premise of motivating salespeople is to evaluate their performance scientifically and reasonably, because performance evaluation is the basis of implementing incentive salary contract and exerting incentive function of incentive salary contract. This paper will put forward some suggestions on the evaluation of key performance indicators of sales staff and the incentive salary structure based on these indicators.

The first is to assess the key performance indicators and weight distribution of sales staff.

(1) The setting of key performance indicators reflects the objective carrier and external performance of performance evaluation content, and the key lies in setting appropriate performance evaluation indicators. The first performance evaluation index is the result performance evaluation index, which evaluates employees according to their final work results or achievements; The second is the process performance evaluation index, that is, the performance of employees is evaluated according to their daily work behavior, and which type of index is adopted mainly depends on the job characteristics of the post. Salesman is a special post group, whose work is characterized by extensiveness, extensiveness and flexibility in time and space, whose work style is independent, and whose work behavior and activity process are difficult to quantify and assess, so it is mainly evaluated by the result evaluation index. Results indicators point to financial indicators, and we adopt the idea of key performance indicators. Key performance indicators (KPI) come from the decomposition of the overall strategic objectives of the enterprise, which reflects the key driving factors that can most effectively affect the value creation of the enterprise. KPI must be a key indicator to measure the implementation effect of enterprise strategy, and its purpose is to establish a mechanism to transform enterprise strategy into internal processes and activities, so that managers can focus on the business behavior that has the greatest driving force for performance, diagnose the problems in production and business activities in time and take improvement measures to improve the performance level, so as to continuously enhance the core competitiveness of enterprises and continuously achieve high efficiency. KPI captures those indicators that can be effectively quantified and quantifies them. Grasp those indicators that need to be improved in practice and improve the flexibility of performance evaluation. KPI also conforms to an important management principle, that is, the "28 principle": in the process of enterprise value creation, there is a "28" law, that is, 20% key personnel create 80% enterprise value; The "28 Principles" also apply to every employee, that is, 8% of tasks are completed by 20% of key behaviors. Grasping 20% key behaviors, analyzing and measuring them can grasp the key points of performance evaluation. Therefore, key performance indicators are specific quantitative indicators used to measure the performance of employees in a certain position, and are the most direct way to measure the effect of work completion, which is suitable for evaluating the performance of sales personnel.

Setting key performance indicators generally follows the principle of "SMAR T": S = concrete, that is, performance indicators should be aimed at specific work objectives; M = measurable means "measurable", which means that the performance indicators are either quantitative or behavioral, and the data or information of these performance indicators can be measured and obtained after verification; A = achievable means "achievable", which means that key performance indicators can be achieved by trying to avoid setting too high or too low; K-Realistic means "reality", which means that key performance indicators are realistic, verifiable and provable, not hypothetical; T = timely means "time-limited", that is, a certain time unit should be used in the performance indicators, that is, the time limit for completing these performance indicators must be set within a certain time limit.

(II) Weight distribution of key performance indicators In order to make the weight distribution of sales return, sales volume and gross profit indicators in the incentive compensation structure have a basis, CF Company adopted the analytic hierarchy process. Analytic Hierarchy Process (AHP) is a qualitative and quantitative decision analysis method to solve multi-objective complex problems. Firstly, according to the nature of the problem and the goal to be achieved, the problem is decomposed into different components, and the hierarchical clustering and combination are carried out according to the interaction and subordinate relationship between the factors to form a hierarchical and hierarchical model; Then, according to people's judgment of objective reality, the relative importance of factors at all levels in the model is expressed quantitatively, and then the weight of the relative importance of factors at all levels is determined by mathematical methods. Finally, by comprehensively calculating the weight values of the relative importance of each level, the combined weight values of the priority of the program level relative to the overall goal are obtained. AHP mathematicizes people's thinking process and objective judgment, simplifies the calculation workload and helps decision makers keep the consistency between thinking process and decision-making principles. The steps are as follows: (1) Establish a hierarchical structure model (as shown in figure1); (2) Construct a comparative judgment matrix (positive reciprocal matrix); According to the comparison relation of pairwise importance of criterion layer, a comparative judgment matrix is constructed. When establishing the judgment matrix, in addition to using Delphi method for expert decision-making, on the basis of a large number of research data, using statistical methods for analysis, induction and final summary, the assignment is obtained. The relative relationship of pairwise is expressed by numbers: 1 is equally important, 3 is slightly important, 3 is obviously important, 7 is strongly important, 9 is extremely important, and 2, 4, 6 and 8 are in the middle.

(3) calculating the weight vector and checking the consistency; Calculate the maximum eigenvalue and eigenvector of the positive reciprocal matrix by sum method;

From this calculation, in the bonus coefficient, the proportions of return, gross profit and sales volume are 38. 1%, 29.2% and 32.7% respectively. For simple operation, the incentive compensation coefficient is adjusted to 40%, the sales coefficient is 30%, and the gross profit coefficient is 30%.

Second, set up a reward structure to encourage salespeople.

Salespeople are different from people in other positions. They work more freely, are more open and market-oriented, and their performance is easier to quantify. Therefore, they generally adopt a small proportion of fixed income and a large proportion of performance pay. Fixed income is mainly basic salary, and the incentive function is weak. This paper mainly discusses the performance salary formula with strong incentive function, that is, bonus. We analyze the specific calculation formula of CF Company's sales bonus. Total individual bonus: A is the fixed average bonus, B is the floating bonus base, and Y is the individual bonus coefficient.

(I) Determination of fixed average bonus A, floating bonus base B and individual bonus coefficient Yi Fixed average bonus A= total bonus+30% of the total number of sales engineers, and floating bonus base B= total bonus * 70%. Personal bonus coefficient is the base of personal bonus coefficient (Ci is the basis of personal bonus coefficient and Di is the difficulty coefficient of personal area); Personal bonus coefficient base Ci= payment base Ei* payment coefficient (40%)+ sales base sales coefficient (30%)+ gross profit base gross profit coefficient (30%). Individual payment base E= individual payment amount/total payment amount; Personal sales base E= personal sales/total sales; Personal gross profit base Gi: personal gross profit/gross profit.

(II) Determination of Di difficulty coefficient in individual regions The determination of the difficulty coefficient of sales grades of CF companies in various provinces and cities is mainly based on the sales situation of various provinces and cities in the past three years, and at the same time, the demand situation of various provinces and cities in the past three years is considered.

(1) Calculate the difficulty coefficient score. Difficulty coefficient score = sales status score+product demand status score. Among them, sales account for 70% of the difficulty coefficient score, and demand accounts for 30%. Sales score = 70 * (the largest sales coefficient among provinces and cities), and the sales coefficient of each province and city is the weighted percentage of sales in this region from 2002 to 2005. The closer the time, the greater the weight: 2002 10%, 20% in 2003, 30% in 2004 and 2005 respectively. Sales coefficient: (local sales in 2002 * 10%+03.

Annual sales in this region * 20%+local sales in 2004 * 30%+local sales in 2005 * 40%)/(total sales in 2002 *10%+20% in 2003+30% in 2004+40% in 2005). The score of demand status =30* (the coefficient of demand status is the largest in all provinces and cities), and the coefficient of demand status in all provinces and cities is the weighted percentage of demand status in this region from 2002 to 2005. The closer the time, the greater the weight: 2002 10%, 20% in 2003, 30% in 2004 and 2004 respectively. Demand condition coefficient = (local demand index in 2002 *10%+local demand index in 2003 * 20%+ local demand index in 2004 * 30%+local demand index in 2005 * 40%)/(total demand index in 2002 *10%+20%) It is divided into six grades, namely 1, 1. 1, 1.3, 1.5, 1.7 and 1.9.

(2) Set the proportion of floating bonus base and fixed bonus amount, and the proportion of sales status and demand status. Both 70% and 30%. This refers to the principle of Gini coefficient, which is an important analysis index used to comprehensively investigate the income distribution differences of global residents. It was put forward by Italian economist Gini in 1922. Its economic meaning is: in all residents' income, the income used for uneven distribution accounts for the percentage of total income. The maximum Gini coefficient is "1" and the minimum is "o". According to international practice, the Gini coefficient is below 0.2, which means that the income distribution of residents is "highly average", 0.2 ~ 0.3 means "relative average" and 0.3 ~ 0.4 means "reasonable". At the same time, 0.4 is usually regarded as the "warning line" of the income distribution gap between the rich and the poor in the world, 0.4 ~ 0.6 means "the gap is too large", and 0.6 or more means. In this paper, the floating bonus base and the sales status score are the actual embodiment of the sales performance of the sales staff, which reflects the sales performance of the sales staff relatively fairly. In a sense, the total fixed bonus and the demand state score are unfair adjustments, and 30% is between "relative average" and "reasonable". Therefore, this paper sets the proportion of floating bonus base to total fixed bonus, and the proportion of sales score to demand score is 70% and 30%.

Third, the implementation effect and review of KPI assessment and incentive compensation for sales staff

(I) Analysis of the implementation effect CF Company started to use the above KPI assessment method and incentive salary structure for sales incentives in 2002, and the results were remarkable, mainly as follows: (1)CF Company's cash withdrawal situation has gradually improved, and the cash flow brought by operating activities has been positive since 2002, and it has continued to grow, maintaining the health of the company's overall cash flow situation; (2) (2) The market strength of CF Company has been continuously enhanced, as shown in Table 2; (3) (3) The profitability of CF Company has also been continuously enhanced, achieving the expected goals of the sales department in improving the company's cash flow, increasing the company's market share and enhancing the company's profitability.

The author believes that the KPI assessment of sales staff and the incentive salary linked to it are suitable for the sales incentives of high-tech manufacturing enterprises, which are as follows: First, the sales targets of high-tech manufacturing enterprises are generally group users. The forms of sales activities are bidding, inviting bidding and negotiating bidding. The product price, payment method and sales quantity of the sales contract are all negotiable. After signing the contract, there is also a lot of room for adjusting the sales receipt, and the sales engineer has some room. The determination of KPI made them clear the direction of active efforts. Secondly, KPI assessment grasps the indicators that can be effectively quantified in enterprise operation, which is clear and clear, and improves the operability and objectivity of performance evaluation; Thirdly, the coefficients (40%, 30% and 30% respectively) of the key performance indicators of sales return, sales volume and gross profit determined by AHP in bonus assessment are helpful for sales staff to understand the basis for determining the proportion, so as to concentrate on their own work in practical work and promote the smooth development of related work; Finally, on the basis of the assessment of sales return, sales volume and sales gross profit, the regional difficulty coefficient is increased to make the performance assessment more fair and reasonable.

(II) Suggestions on Improving Sales Performance Appraisal CF Company's sales incentive measures have achieved ideal results, but there is still room for improvement in this scheme. First, the sales performance evaluation only pays attention to the internal evaluation of the enterprise, ignoring the cooperative relationship and satisfaction evaluation between the enterprise and external stakeholders. Ignoring the evaluation of customer satisfaction and the strategic partnership between suppliers and middlemen in the formation of enterprise supply chain will affect the comprehensiveness and scientificity of enterprise development strategy decision. Second, although financial indicators are easy to quantify and clarify, they are lagging, easy to manipulate and short-term. Non-financial indicators can better reflect the long-term development trend of enterprises. Typical non-financial indicators of sales performance evaluation include: service quality, product quality, customer satisfaction, cooperation with middlemen, market adaptability, etc. Judging from the present situation of foreign enterprises' performance evaluation, adopting non-financial indicators has become an important development trend of sales performance evaluation. In order to meet the needs of the development of the times, enterprises should broaden their horizons, consider the interests of relevant stakeholders in sales performance evaluation, and attach importance to external evaluation; Appropriately incorporate non-financial indicators to find the best combination point, so that it can take into account the long-term and short-term development goals of enterprises at the same time.