Salesforce Leadership Exam 2

What is the effectiveness index of a salesperson whose 2008 sales totaled $6,000 and whose sales quota was $5,500? a. 109 b. 92 c. 97 d. 106 e. 69

a. 109

Which of the following statements regarding the use of outcome-based and behavior-based perspectives in the evaluation of salesperson performance is false? a. A review of current practice indicates a tendency toward a behavior-based perspective. b. Most sales organizations operate somewhere between the two extreme positions. c. The relative emphasis on outcome-based and behavior-based measures depends upon environmental, firm, and salesperson considerations. d. A salesperson's performance on post-sale service is considered a behavior-based measure. e. Unethical activities that produce immediate sales may result from a totally outcome- based perspective.

a. A review of current practice indicates a tendency toward a behavior-based perspective.

Which of the following is an advantage of a straight-commission compensation plan? a. Operating costs are minimized during slack selling periods. b. They are highly flexible, allowing frequent changes in compensation practices to achieve short-term objectives. c. They are attractive to college graduates desiring an opportunity to earn while they train. d. The salesforce's loyalty to the company is enhanced. e. Salespeople often adopt high-pressure, non-customer-oriented sales techniques which increase total sales.

a. Operating costs are minimized during slack selling periods.

Which of the following statements regarding productivity analysis is false? a. The most useful input unit for productivity analysis is total sales per salesperson. b. Productivity is typically measured in terms of ratios between outputs and inputs. c. Sales productivity and profitability are highly interrelated. d. Productivity analysis is managerial oriented. e. Improvements in sales productivity should be achieved by an increase in output with the same level of input.

a. The most useful input unit for productivity analysis is total sales per salesperson.

One of the major difficulties in developing the income statement approach in profitability analysis is... a. determining how to handle costs that are shared between organizational levels or sales types. b. determining the cost of goods sold for individual organizational levels or sales types. c. breaking down total sales into individual unit sales. d. explaining how to interpret the results to senior managers. e. figuring the investment in assets required to generate the net profit or profit contribution.

a. determining how to handle costs that are shared between organizational levels or sales types.

All of the following are considered results criteria except... a. number of calls per account. b. sales volume in dollars. c. sales volume by customer. d. market share achieved. e. number of new accounts.

a. number of calls per account.

A firm offering a college tuition reimbursement program has made a commitment to providing this non-financial reward: a. opportunity for personal growth. b. recognition for achievement. c. sense of accomplishment. d. opportunity for promotion. e. job redesign.

a. opportunity for personal growth.

All of the following are considered profitability criteria except... a. sales volume in dollars. b. gross margin per sales. c. return on sales cost. d. selling expense versus budget. e. average cost per call.

a. sales volume in dollars.

The adequacy of sales managers and management practices is assessed under this area of the sales organization audit framework: a. sales-management evaluation. b. sales-organization strategies. c. sales-organization environment. d. sales-management functions. e. sales-organization planning system.

a. sales-management evaluation.

According to the text, which of the following is not one of the rewards typically offered to salespeople? a. social interaction opportunities b. job security c. sense of accomplishment d. pay e. promotion

a. social interaction opportunities

What change in the firm's salesforce reward system might be in response to customers' needs? a. A pay freeze b. A change from straight commission to straight salary c. The introduction of a sales contest d. A change from straight salary to straight commission e. A pay raise

b. A change from straight commission to straight salary

Which of the following statements regarding the sales organization audit is false? a. It is an expensive and time-consuming process. b. It should be conducted by someone within the sales organization. c. It generates diagnostic information that can help management correct problems in early stages or eliminate potential problems before they become serious. d. It should be performed on some type of regular basis. e. Its purpose is to make a systematic and comprehensive investigation to identify problems, determine their causes, and take the necessary corrective action.

b. It should be conducted by someone within the sales organization.

Which of the following is not one of the desired outcomes of an optimal reward system? a. Encourage specific activities which are consistent with the firm's overall marketing and salesforce objectives and strategies. b. Provide a mix of both compensation and noncompensation rewards comparable to other firms. c. Attract and retain competent salespeople, thereby enhancing long-term customer relationships. d. Be clear and flexible enough to allow the kind of adjustments that facilitate administration of the reward system. e. Provide an acceptable ratio of costs and salesforce output in volume, profit, or other objectives.

b. Provide a mix of both compensation and noncompensation rewards comparable to other firms.

The typical approach to performance evaluation incorporates four distinct stages. Which of the following is not one of the stages? a. The salesperson and sales manager discuss the salesperson's evaluation. b. The sales manager discusses the salesperson with others (e.g., customers, team members) who evaluated the salesperson. c. The sales manager rates the salesperson relative to predetermined criteria to determine whether he or she is above or below expectations. d. The salesperson's performance is reviewed relative to his or her previous performance evaluation. e. The sales manager specifies training and resources needed for improvement.

b. The sales manager discusses the salesperson with others (e.g., customers, team members) who evaluated the salesperson.

A definition for sales organization effectiveness would be... a. an overall evaluation of how well each salesperson performed in his/her situation. b. an overall evaluation of how well the sales organization did in achieving its goals and objectives. c. an overall evaluation of how well the firm did in achieving its sales goals and objectives. d. an overall evaluation of how well the sales organization did in developing new accounts. e. a comprehensive approach toward evaluating the performance of the managerial component of the firm.

b. an overall evaluation of how well the sales organization did in achieving its goals and objectives.

Flexibility has been cited as both an advantage and a disadvantage of this compensation pay plan: a. straight salary. b. combination pay plans. c. straight commission. d. straight commission with bonuses. e. straight salary with bonuses.

b. combination pay plans.

In budgeting for each expense category, a sales manager should attempt to... a. set the budget at the lowest possible level. b. determine the lowest expenditure level necessary to achieve the sales quotas. c. cut costs from last year's level of expenditure. d. justify the highest possible level of expenditure in order to have some flexibility in the budget. e. improve profitability in the short run by cutting unnecessary expenditures for training and travel.

b. determine the lowest expenditure level necessary to achieve the sales quotas.

This form of nonfinancial reward is generally considered to be more desirable to younger salespeople than to older salespeople: a. opportunity for personal growth. b. opportunity for promotion. c. job security. d. sense of accomplishment. e. recognition for achievement.

b. opportunity for promotion.

A comprehensive evaluation of salesperson performance should incorporate criteria from all of the following dimensions except... a. profitability. b. political. c. professional development. d. behavioral. e. results.

b. political.

The ___________ ranks all salespeople according to relative performance on each performance criterion. a. graphic rating/checklist method b. ranking method c. management by objectives (MBO) d. behaviorally anchored rating scale (BARS) e. team-evaluation consensus

b. ranking method

The reward system practiced by the majority of consumer and industrial firms is... a. straight salary. b. salary plus incentives. c. straight commission plus bonuses. d. straight salary plus expenses. e. straight commission.

b. salary plus incentives.

The most often-used sales definition defines a sale as... a. paid order. b. shipped order. c. placed order. d. received order. e. delivered order.

b. shipped order.

Limited research shows that behavior-based control appears to be used under all of the following conditions except... a. the selling environment is uncertain. b. the salesforce is large. c. outputs and the cost of measuring them are inadequate. d. products are less complex. e. salespeople are more educated.

b. the salesforce is large.

In a sales analysis, which of the following comparisons would not be made? a. Comparisons with forecasts b. Comparisons with previous period c. Comparisons between actual and budgeted costs d. Comparisons with industry/competitors e. Comparisons within the sales organization

c. Comparisons between actual and budgeted costs

Which of the following would not be an expense category for a selling budget? a. Recruiting expenses b. Salespeople's lodging expenses c. Production expense d. Salespeople's salaries e. Sales office expense

c. Production expense

Which of the following statements regarding the graphic rating/checklist method of performance evaluation is false? a. This method is very popular in many sales organizations. b. It consists of approaches where salespeople are evaluated using some type of performance evaluation form. c. This method involves ranking salespeople according to their relative performance on each performance criterion. d. It was rated poor on the discriminability criterion. e. With this method, some sales managers tend to give all ratings around the average.

c. This method involves ranking salespeople according to their relative performance on each performance criterion.

An example of a selling situation requiring a commission split would be... a. a field salesperson sells a computer to a customer and some time after this it requires a service call from a company service technician. b. a salesperson needs help from a salaried technical expert in order to provide a potential customer with certain information. c. a large company purchases products from a company and ships them to its affiliates in several cities, with the selling firm's salespeople in these cities required to provide follow-up and service. d. a salesperson provides a list of referrals that are not in his/her territory to the salesperson covering that territory. e. a sales manager is in the process of training a new recruit and accompanies him/her on sales calls.

c. a large company purchases products from a company and ships them to its affiliates in several cities, with the selling firm's salespeople in these cities required to provide follow-up and service.

Salespeople can increase profitability in all of the following ways except... a. by selling more higher margin products. b. by reducing their travel and entertainment costs. c. by reducing their order-call ratio. d. by maintaining higher prices in sales negotiations. e. by reducing their average cost per sales call.

c. by reducing their order-call ratio.

All of the following are important in assigning sales quotas except... a. the concentration of businesses within the sales representative's territory. b. the geographical size of a territory. c. commitment by top management to assist the sales representative. d. growth of businesses within the sales representative's territory. e. the complexity of products sold.

c. commitment by top management to assist the sales representative

When determining the financial compensation mix, the sales manager must... a. decide what the commission payout event will be. b. determine what percentage in commission is to be paid to salespeople. c. determine the relative amounts to be paid in salary, commission, and bonus. d. decide on what type of benefits package to offer. e. review the compensation plans offered by other firms in the industry.

c. determine the relative amounts to be paid in salary, commission, and bonus.

The mutual setting of well-defined and measurable goals within a specified time period is a concept incorporated into this type of performance evaluation method: a. graphic rating/checklist method. b. ranking method. c. management by objectives (MBO). d. behaviorally anchored rating scale (BARS). e. team-evaluation consensus.

c. management by objectives (MBO).

Most sales organizations focus on this behavioral criterion in salesperson evaluation: a. number of demonstrations conducted. b. number of required reports submitted. c. number of customer calls. d. number of letters/phone calls to prospects. e. number of customer complaints.

c. number of customer calls.

The most commonly used definitions of motivation include these three dimensions: a. intensity, degree, persistence. b. severity, direction, perseverance. c. persistence, intensity, direction. d. instruction, degree, tenacity. e. tenacity, persistence, direction.

c. persistence, intensity, direction.

This type of criterion assesses improvements in certain characteristics of salespeople that are related to successful performance in the sales job: a. profitability. b. productivity. c. professional development. d. behavioral. e. results.

c. professional development.

Intraorganizational factors such as company organization are considered in this area of the sales organization audit framework: a. sales-management evaluation. b. sales-organization strategies. c. sales-organization environment. d. sales-management functions. e. sales-organization planning system.

c. sales-organization environment.

The most serious disadvantage of a straight-salary compensation plan is... a. that it builds little in the way of salesforce loyalty or commitment to the company. b. that differences in salary levels among salespeople are often a function of seniority on the job instead of true merit. c. that they offer little financial incentive to perform past a merely acceptable level. d. the financial burden the firm suffers if the market declines or stagnates. e. that high-pressure, non-customer-oriented sales techniques are often used to boost total sales.

c. that they offer little financial incentive to perform past a merely acceptable level.

Relative to the graphic rating, MBO and BARS performance evaluation methods, which of the following statements is false regarding the ranking method of performance evaluation? a. It is poor in job relatedness. b. It is poor in practicality. c. It is poor in reliability. d. It is poor in standardization. e. It is good in comparability.

d. It is poor in standardization.

Which of the following statements regarding sales organization effectiveness is true? a. Most firms conduct annual assessments of cost, profit contribution, net profit, or return on assets. b. Sales analyses are performed only at the lowest level of the sales organization, typically by territory. c. The one summary measure of sales organization effectiveness is a productivity analysis. d. Sales analyses can be conducted in several ways, including by total sales or by sales to specific customers. e. Most firms employ the same type of sales analysis, an analysis of sales of specific products.

d. Sales analyses can be conducted in several ways, including by total sales or by sales to specific customers.

Which of the following statements regarding sales contests is true? a. A sales contest is a temporary program that is used to accomplish a specified long-term objective. b. The optimum duration for a sales contest has been determined to include this range--longer than three months but less than six months. c. The most effective sales contest prize is a cash award. d. Sales contests will continue to be an important tool for achieving expedient results. e. Researchers have not yet been able to find any positive relationship between sales contests and sales and profitability.

d. Sales contests will continue to be an important tool for achieving expedient results.

Which of the following conditions is not typically associated with higher pay levels? a. Job experience. b. The importance of personal selling in the overall marketing effort. c. Higher skill levels. d. The extent to which there is an expectation that salespeople will service current customers. e. Highly competitive markets where an intense personal selling effort is important for customer retention and growth.

d. The extent to which there is an expectation that salespeople will service current customers.

According to a survey of sales executives reported in the text, the most popular sales incentive is... a. plaques/rewards. b. merchandise/gifts. c. recognition dinners. d. cash. e. leisure trips/travel.

d. cash.

The majority of sales organizations evaluate salesperson performance: a. on a semiannual basis. b. on a quarterly basis. c. on a monthly basis. d. on an annual basis. e. once every two years.

d. on an annual basis.

The Million Dollar Roundtable designation in the insurance industry is an example of this type of nonfinancial reward: a. opportunity for promotion. b. sense of accomplishment. c. personal growth. d. recognition for achievement. e. job security.

d. recognition for achievement.

Recruitment, selection, and sales training are examples of factors considered in this area of the sales organization audit framework: a. sales-management evaluation. b. sales-organization strategies. c. sales-organization environment. d. sales-management functions. e. sales-organization planning system.

d. sales-management functions.

Complete this sentence. The more a salesperson performance evaluation system is behavior-based than outcome-based... a. the less likely that risk-averse salespeople will be attracted, nurtured, and retained. b. the more salespeople will have reduced levels of intrinsic motivation. c. the less salespeople identify with and feel committed to the sales organization. d. the less the need for using pay as a control mechanism. e. the more likely salespeople will reject the authority of sales management.

d. the less the need for using pay as a control mechanism.

Reliability, as a characteristic of salesperson performance evaluation methods, can be defined as... a. the need for the measurement instruments and evaluation process to be similar throughout the sales organization. b. the ability of the measure to provide accurate assessments of the criteria they are intended to measure. c. the ability of the measure to meet the needs of the sales organization. d. the need for the measures to be stable over time and exhibit internal consistency. e. the need for both sales managers and salespeople to understand the entire performance-appraisal process and to be able to implement the process in a reasonable amount of time.

d. the need for the measures to be stable over time and exhibit internal consistency.

Which of the following is not an advantage of the commission compensation plan? a. Income is linked to results. b. There is a strong financial incentive to improve results. c. Costs are reduced during slow sales periods. d. Less operating capital is required. e. Customer loyalty is enhanced.

e. Customer loyalty is enhanced.

Which of the following approaches to salesperson performance evaluations is false? a. Most sales organizations employ combinations of input and output criteria that are evaluated by quantitative and qualitative measures. b. Sales organizations that set performance standards or quotas tend to enlist the aid of salespeople in establishing these objectives. c. Most salesperson performance evaluations are conducted by the field sales manager who supervises the salesperson. d. Most sales organizations provide salespeople with a written copy of their performance review. e. Discussions of performance evaluations with salespeople are typically conducted in the field.

e. Discussions of performance evaluations with salespeople are typically conducted in the field.

Which of the following is not mentioned in the text as a challenge to sales managers attempting to adjust their compensation plans to recognize team performance? a. Existing reward systems for individual salespeople are not easy to adapt to team selling situations. b. Salespeople who are accustomed to earning commissions based on their individual efforts may not respond enthusiastically to team-based compensation. c. There is concern that rewards for high performers may be diminished by lower-performing team members. d. It is difficult to determine an individual salesperson's contribution to overall team performance. e. Overall compensation and rewards increase with the use of team selling.

e. Overall compensation and rewards increase with the use of team selling.

Which method of determining expenditure levels for selling expense categories depends upon accurate sales forecasts? a. Objective and task method b. Zero-based budgeting c. Cost-justification method d. Profit margin budgeting e. Percentage-of-sales method

e. Percentage-of-sales method

Which of the following statements concerning performance management is false? a. Salespeople are compensated on the value of their contributions to the organization's success. b. Salespeople assume responsibility for their careers. c. Sales managers act as partners in the performance appraisal process. d. Its goal is ultimately to improve organizational performance by finding new and better ways to satisfy customers. e. Sales managers create development plans for salespeople to follow.

e. Sales managers create development plans for salespeople to follow.

A sales organization audit can best be defined as... a. a systematic and diagnostic tool that is used to determine the adequacy of a firm's advertising expenditures. b. a prescriptive device that is generally used in the redesign of territories or districts. c. a framework that can be used to assess salespeople for promotion potential. d. a tool that is used by all organizations to help them achieve their goals. e. a comprehensive, systematic, diagnostic and prescriptive tool used to assess the adequacy of a firm's sales management process.

e. a comprehensive, systematic, diagnostic and prescriptive tool used to assess the adequacy of a firm's sales management process.

A benchmarking study should provide all of the following except... a. a measure that compares performance for the benchmarked process relative to the organization studied. b. identification of the organization's performance gap relative to benchmarked performance levels. c. identification of best practices and facilitators that produced the results observed during the study. d. performance goals for the process studied. e. a set of solutions to commonly encountered performance problems.

e. a set of solutions to commonly encountered performance problems.

A salesperson who is extrinsically motivated... a. would work for the pure pleasure of working. b. doesn't need or desire formal recognition for outstanding achievements. c. is motivated by personal growth needs. d. finds the job to be inherently rewarding. e. is motivated by the rewards that the job provides.

e. is motivated by the rewards that the job provides.

When actual selling costs far exceed budgeted costs... a. it is considered a bad situation, as the objective is to minimize selling costs. b. it is considered a good situation, as high selling costs automatically mean high sales. c. it is cause for concern, since costs are only allowed to exceed the budgeted amount by a small percentage. d. it is cause for concern, since top management will cut future budgets to reduce costs. e. it is cause for further analysis to discover whether a specified relationship between sales and selling costs was maintained.

e. it is cause for further analysis to discover whether a specified relationship between sales and selling costs was maintained.

Which of the following is not one of the four types of analyses outlined in the text as a method for analyzing sales organization effectiveness? a. cost analysis. b. profitability analysis. c. productivity analysis. d. sales analysis. e. market-share analysis.

e. market-share analysis.

Which of the following is not considered professional development criteria? a. communication skills b. product knowledge c. attitude d. selling skills e. number of customer complaints

e. number of customer complaints

The ___________ method calculates an expenditure level for each category by multiplying an expenditure percentage times forecasted sales. a. objective and task b. expenditure projection c. cost-justification d. zero-based budgeting e. percentage-of-sales

e. percentage-of-sales

The most often used method to establish selling budgets is... a. objective and task method. b. profitability projections. c. cost-justification method. d. zero-based budgeting. e. percentage-of-sales method.

e. percentage-of-sales method.

This form of commission rate may actually result in overselling and higher selling costs to the company: a. regressive. b. incremental. c. a combination of constant and regressive rates. d. constant. e. progressive.

e. progressive.