Our research shows that most sales leaders fail to consider the interplay between selling capacity and market demand when determining headcount.  And as a result, they sacrifice market-share and new logos.  Instead of sizing and deploying their sales force using market-based best practices, they settle for easy fixes that ignore market dynamics and focus exclusively on cost and affordability (See my previous blog on the subject – Sizing Your Sales Force: Are You Focused on the Wrong Things?).

 

So how do you pair market opportunity with selling capacity to determine the optimal size of your sales force?  World-class organizations employ three market-based sizing methodologies to establish the number of sales heads needed to execute their sales strategy:

 

  1. Activity Method
  2. Pipeline Method
  3. Return per Call Method

 

The Activity Method

An activity-based sizing model follows three steps:

 

  • Developing a list of sales force activities required to cover the accounts in each customer segment
  • Estimating the time it takes for a salesperson to complete these activities
  • Calculating the number of sales reps required to do the work

 

The table below illustrates how a chemical company used the Activity Method to estimate their staffing requirements to cover six market segments.

 

Resource Planning Selling Capacity

 

There are several ways to capture the necessary data for developing activity-based sizing recommendations.  Best practices include interviews, surveys and time-studies.  When is the last time you surveyed your sales force to understand how much time they are spending on selling and non-selling activities?  The sheer insight on productivity is worth the effort.

 

Customers also provide a unique perspective on what they require and expect from the selling organization.  Have you considered surveying your top customers?

 

Key Takeaway:  Best practices for Sales Force Sizing always begin with a focus on the customer.  By matching selling capacity to market demand, world-class organizations properly size and deploy their sales force to capture market opportunities and push topline revenue.  The Activity Methodology is one approach to determine the required optimal headcount.  You should consider surveying your sales reps and managers, as well as your customers, to start collecting valuable data.

 

Used any of the Sizing Models mentioned?  Please share your experience and most importantly the results.

 

For those of you in the midst of 2012 planning, make sure you don’t miss out on the no cost event: Designing Your Sales Strategy for 2012 that ends this month:

 

Follow @GeorgedlReyes

 

Follow @MakingTheNumber

 

 

ABOUT THE AUTHOR

George de los Reyes

Solves clients’ most difficult sales and marketing problems to ensure they accelerate and exceed their revenue growth goals.
Learn more about George de los Reyes >

George joined the SBI team in 2011. He leads engagement teams for clients such as Hewlett Packard, Adobe, Thomson Reuters, Ryder Systems, UPS Capital, Cancer Treatment Centers of America and others.

 

Prior to SBI, George was the CEO of a management consultancy and real estate development firm. His breadth of expertise covers sales and marketing, operations, strategic planning, finance, project management and public relations. George leverages his broad professional experience to solve complex issues and build effective solutions for his clients.

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