Sales Training: Salesforce Size
Published: Wednesday, November 16, 2011
Sales Training Article: Five Ways to Ensure Your Sales Force Size Is Right for 2012
By George de los Reyes, Sales Benchmark Index (SBI)
Sales leaders preparing 2012 strategic plans should pay close attention to Sales Force Sizing. Even the best go-to-market strategy will come up short when faced with insufficient selling hours to meet sales objectives.
The size of the sales force affects customers, salespeople and the overall company. If the sales force is too small, it cannot serve the needs of the customer effectively. If it's too large, salespeople become an annoyance to customers and a drain on the bottom line.
In previous posts on Sales Benchmark Index, I outlined a few simple ways to assess the current size of your sales force:
- Sales Force Morale Test
- Customer Test
These straight-forward assessments provide keen insight into whether you are deploying the optimal sales force size to meet the market demand.
Below are five (5) Resource Planning approaches to sizing field resources:
Going with your Gut. Experienced sales leaders develop a feel for the market that suggests go-forward staffing levels. Although not very scientific, these judgments can prove accurate, particularly for the sale of a single product family into a homogeneous market.
Maximizing the Sales Budget. Another method to "size" the field sales organization is to add headcount up to the available sales expense funding. This approach can prove inadequate because it focuses solely on cost while ignoring market dynamics such as market potential verses total available selling time.
Looking at the Competition. Matching the competitors' deployment models ensures competitive coverage. You don't want to be outshouted in the market place. Good business intelligence is an important ingredient of your overall sales strategy.
Return on Investment. Adding incremental headcount provides an initial return on sales investment. However, as the market grows, the sales response declines. Using a more scientific method, like a logarithmic formula, calculates the ROI on additional headcount thus ensuring optimal staffing levels.
Pipeline Model. Once sales management determines the segment's market potential, sales leadership can use sales activity calculations to determine the proper staffing levels. See my previous blog post for a detailed description of this model.
A perfect sizing model doesn't exist. There are many models to start with, but in our experience, you will need to highly customize them based on the organization's sales model, objectives, etc. How quickly you do this will determine the efficiency of your resource planning.
Key Takeaway: Don't overlook the importance of optimal resource deployment when preparing next year's strategic plan. There are a few simple tests to assess your current sales force size. Once you have determined you are under/overstaffed, use one of the five (5) methods above to properly determine headcount.
The first step to building an effective sales force is to understand who and where your customer is.
Read more sales training articles.