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Sales Force Sizing and Deployment

A company with too many sales people will have a higher than optimal cost of sales.  And one with too few will leave profitable revenue on the table.

Resource sizing asks two questions:

1.  How many people do we need (in each role) to meet our forecast?, or…

2.  How many people do we need to cover the market profitably?

     ■     I.e., to maximize sales, with each individual resource being profitable

Sizing generally starts from a point where:

     ■    Customer segments have been defined

     ■   The channels and types of sales resources assigned to each segment has been determined

     ■   The sales process has been designed

 

The primary objective of deployment is to “balance” territories

■   The primary consideration is workload balancing
      –   If a territory has too much workload, then profitable accounts and prospects will be uncovered, leaving money on the table
      –   If a territory has insufficient workload, the rep will need to cover unprofitable accounts, and be less efficient, making it harder to achieve quota

■   Sales potential is also a consideration
     –   A territory must have sufficient sales potential to support the rep
     –   But a territory with very high sales potential and one FTE of workload is not necessarily a problem
          =   The degree to which it is or is not a problem is partly a function of the incentive plan

■   A third consideration is configuration of geography and accounts
     –   Consider roads, natural barriers, market boundaries, and industry concentrations

A quick overview of the process for determining optimal sizing and deployment is as follows

■   Define target market and accessible market

■   Quantify accessible market (number, size, and type of current and new accounts to cover)

■   Define sales capacity, time required to cover existing accounts and prospects across sales roles, expected close ratios, average sale values, etc.

■   Model FTEs required to cover market and achieve forecast and/or which parts of market to cover to maximize sales given a fixed headcount

■   Use GIS software to map workload and sales potential, prioritize geographical markets to cover, and define territories

Please see the attached presentation for futher detail.






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