Accounting for the Impact of Territory Characteristics on Sales Performance: Relative Efficiency as a Measure of Salesperson Performance

Abstract

This paper illustrates the use of relative efficiency as an alternative conceptualization of salesperson performance. This approach yields a more individualized and complete picture of salesperson performance, since performance is adjusted by the inputs which were consumed to generate the performance. An analytical technique known as Data Envelopment Analysis is used to adjust sales performance by territory characteristics, derived from the Census of Retail Trade. Implications include ways to increase the impact of sales force-related expenditures, adjusting for territory inequities in the evaluation process and identifying best practices among a group of salespeople.