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Sales Force Sizing

The document discusses methods for determining optimal sales force sizing to maximize revenue and profit. It describes factors to consider like the sales force budget, compensation schemes, and historical sales data. It also outlines several mathematical formulas and methods including percentage-of-sales, market response methods which maximize profit as a function of selling effort and costs, and workload methods which maximize profit as a function of number of salespersons, cost per salesperson, and workload. The goal is to allocate sales force efforts across market segments and products effectively.

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60 views

Sales Force Sizing

The document discusses methods for determining optimal sales force sizing to maximize revenue and profit. It describes factors to consider like the sales force budget, compensation schemes, and historical sales data. It also outlines several mathematical formulas and methods including percentage-of-sales, market response methods which maximize profit as a function of selling effort and costs, and workload methods which maximize profit as a function of number of salespersons, cost per salesperson, and workload. The goal is to allocate sales force efforts across market segments and products effectively.

Uploaded by

9970278234
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SALES FORCE SIZING

• Allocate sales force effort to market segments and products


• Effective Sales Force Sizing & Territory Design for
Maximum Revenue and Profit Potential.

FACTOR

• Sales force budget


• No of sales person to employ
• Compensation scheme*
*The compensation schemes affect the quality of the people that can be attract to a position as well
as the way they perform
Sales force Heuristics
BREAKDOWN OR PERCENTAGE-OF-SALES

• An historical or justified sales force


Average revenue generated by sales person
=
Sales forecast
Market response Methods
Formula
Maximize Z = PQ(X)-C1(Q)-C2(X)
Where,
Z= profit
P= selling price
Q(X)=No. of unit sold as function of selling effort
C2(Q)=total cost of producing and merchandising Q unit
C2(X)= total cost of selling effort of level X

Here we have to assume all other element in the marketing mix are fixed(price
advertising, etc.)
Work load Methods
•Maximize
  ZCX

Where,
m= profit margin per unit sold
X = number of salespersons
C = cost per salesperson
P = corporate work load,

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