For most sales leaders, knowing if your sales force is properly sized isn’t always so clear. Under certain conditions, modest upsizing is appropriate. This is especially true if the sales leader was conservative with headcount during the early growth stage of the business. Downsizing on the other hand can become necessary as pressure to deliver profits builds, particularly in an increasingly competitive environment. And in some cases, the current size of a sales force is correct when juxtaposed to product and market maturity. See my previous blog post on aligning the life cycles of your industry, product and company.
If you are a sales leader of a mature business, here are a couple of Sizing Strategies to consider when Resource Planning:
As your business matures, downsizing the sales force is inevitable. But profit doesn’t have to decline as well. When reducing your sales force, an effective strategy is to focus your direct reps on the most critical, high-value selling activities that generate the most revenue – for example Key Account Management. Sales leaders can then use less costly and more efficient sales resources such as Inside Sales or Channel Partners to reach other customer segments. For example, one client moved account management responsibility to a less expensive inside sales team allowing the more expensive sales reps to focus on new business. We call this the Shift & Lift strategy.
Working Smarter vs. Increasing Size
For mature businesses, smarter and more effective sales effort is a greater top-line revenue enhancer than increasing the sales force size. In fact, smarter allocation of sales time across customers, products and selling activities has an almost 2.5 times greater profit impact than an increase in headcount. Rather than augmenting your number of reps, consider improving performance through targeted Sales Training or adjusting Sales Compensation to greater incent your reps.
In our work with clients, part of our analysis includes formally surveying their sales force. Additionally, we spend time in the field with individual reps preparing and going on sales calls. One goal of the survey and ride-alongs is to understand how much time the sales force is spending on selling vs. non-selling activities. Working smarter is all about maximizing the amount of selling time. Another tool we use to assess the effectiveness of our client’s sales force is a Time Study.
We ask the sales force to track their daily activities by Activity Category and Customer Category for period of (30) days. The output of this study is tremendous insight into how the reps are spending their time.
Download the Time Study template HERE.
Call to Action: Do you know how much time your reps are spending on selling vs. non-selling activities? You would be surprised to know how much time is spent on non-customer facing activities. Download the Time Study Template and have your sales force catalog their time for (30) days.