Often overlooked, Sales Force Sizing can be one reason for sagging sales. If you are having trouble penetrating new accounts or going wider and deeper into existing accounts, it may be that your Resource Planning needs attention. The following simple tests can be utilized to check if your sales force is sized properly:
Once you’ve determined there’s an issue with headcount, there are a few market-based, sizing methodologies available to establish the optimal number of reps. Market-based approaches always begin with focus on the customer. In my previous blog post, I discussed the Activity Method. The second sizing model, the Pipeline Method, builds on the activity-based methodology.
The Pipeline Method
Like the Activity Model, the Pipeline Method addresses the amount of rep activity needed to cover different market segments. Additionally, this approach leverages the sales process itself to determine coverage and thus sales force sizing needs. The pipeline method is especially useful when there’s a complex or lengthy sales process with multiple milestones that advance the probability of a sale.
The Pipeline Method tracks sales force effort and results through the company’s entire sales process. It takes into account the following metrics:
- Number of leads entering the pipeline
- Stages of the Sales Process
- Sales force effort required at each stage
- Conversion rate at each stage
Based on these four inputs, the model calculates the number of reps needed to effectively execute the sales process.
Key Takeaway: Sizing your sales force to align with ever changing market dynamics is critical if you want to hit your goal for 2012. As the economy continues to struggle and competition heightens, knowing how many reps to deploy and where to deploy them is a necessity. Using a market-based, customer-focused sizing model is the best bet for properly sizing your sales force.
Call to Action: We’re already a 3rd into Q4. If you are struggling to hit your number in 2011, how will 2012 look? It may be time to look seriously at headcount and get help in Resource Planning for next year.