Editor's Note Managing sales personnel is a major challenge for companies, leading many to establish various reward and punishment systems. But are these systems truly effective? Using statistical control charts can help us find the answer. Managing sales personnel has always been a major challenge. Many company executives often have mixed feelings when talking about their sales teams: love because they are the main force generating sales revenue; without a strong sales team, it is impossible to effectively implement market development and marketing strategies. Hate because sales teams often lack discipline, unlike production departments which have many management processes. Sometimes it feels like the sales team is a loose sand, difficult to manage. To address this, many companies have established various reward and punishment systems. But are these systems truly effective? Let's look at an example. Suppose there is a sales team where each salesperson has a weekly sales target of 15 units. To boost sales, the sales manager secretly decides to track each salesperson's weekly target achievement rate: if sales are below 13, the salesperson is criticized at the weekly meeting; if sales are 14, 15, or 16, no action is taken; if sales exceed 17, the salesperson is praised at the weekly meeting. The manager also records the actions taken and the salesperson's performance in the following week. Over a year, the manager plots the relationship between the actions taken and the sales performance of one salesperson, Xiao Zhang, as shown below. Based on this, can we conclude that Xiao Zhang cannot handle praise because his sales drop after praise and increase after criticism, and therefore he should be criticized more severely? Is that really the case? Using statistical control charts, we can uncover the truth behind the data. The chart "Xiao Zhang's Weekly Sales Control Chart" below shows Xiao Zhang's weekly sales for the entire year. The green and red solid lines are the standard lines for each praise or criticism. It is easy to see that all of Xiao Zhang's weekly sales data points fall within the upper and lower control limits (blue solid lines), meeting the conditions of a stable process. In statistics, a "stable process" means that all data points are in a state of random variation. In a stable process, the variation of each data point is due to a large number of random factors, and each specific factor plays only a negligible role. In other words, no single simple factor (criticism or praise) is the cause of the variation in Xiao Zhang's weekly sales! Since Xiao Zhang's weekly sales control chart shows that his sales performance is a stable process, it is unwise to ask the following questions: ● Why were sales so low in week 13? ● Why were sales so high in week 28? If the sales manager spends a lot of time and energy "investigating" the answers to these questions, it will not only be a waste of resources but also will not improve Xiao Zhang's sales performance. In fact, we can not only conclude from the control chart data that "Xiao Zhang is a very stable salesperson," but also, according to statistical theory on stable processes, we implicitly assume that Xiao Zhang is not affected by the praise or criticism from the sales manager. Otherwise, Xiao Zhang would have taken some "corrective" actions, and the process shown in the control chart would not be so stable. How many people in real life can be like Xiao Zhang, remaining unmoved after being scolded by their boss? Suppose Xiao Zhang is a very diligent and hardworking salesperson, but he doesn't know how to further increase sales. After being criticized by his boss in weeks 8 and 9, what would he do? A "smart" person would quietly "hide" products from weeks with good sales and ship them in weeks with poor sales to avoid further criticism. The result: Xiao Zhang no longer receives criticism, but the company's total sales do not increase, and customers complain about late deliveries. The most critical point is that the sales manager not only doesn't know where the problem lies but even thinks his method is effective! What do we learn from this case? As managers, we hold countless business meetings daily, monthly, and yearly. In those meetings, we discuss countless documents, ask countless questions, make countless decisions, and assign countless tasks. During this process, have we ever asked ourselves: Did we ask the right questions? Were our decisions correct? If we don't analyze large amounts of data with control charts, would we also draw the wrong conclusion that "Xiao Zhang cannot handle praise"? Therefore, when making decisions and formulating action plans: Do not——base decisions on a single result; Do not——base decisions on a simple comparison of two results; Do not——simply ask why one result differs from another (why two weeks' sales differ); Do——put the result data into a control chart for analysis; Do——when the control chart shows a change (instability) in the process, find the root cause of the change; Do——when the process is stable, suppress the urge to ask "why are the two numbers different." When our knowledge is limited, or we cannot find the cause of a problem, we often use past experience or "hearsay" to make assumptions. At such times, I hope you can recall the above case and remember that the statement "These two things (two numbers, two products, etc.) must be different for a reason" is wrong in most cases! Returning to the management of the sales force, since salespeople interact with people all day, there are more "stakeholders" in their work, and thus more uncertainty and randomness. What we should assess is not why their weekly or monthly sales differ, but rather help them improve their "average sales." Their assessment should not be based on simple one or two KPIs (such as sales targets), but should be comprehensive. About the author: Zhou Weixin, Senior Vice President of AGI-Shorewood Global, Managing Director of Asia. Source: Business Review Magazine (ID: shangyepinglun) -END- The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]