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. Determine the right number of “feet on the street,” using the pipeline method of sales force sizing. It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. The Revenue Growth Diagnostic interactive tool will help you determine if you are likely or unlikely to make your number.
Why is this a problem? Too few reps and you will miss the revenue number. Too many reps and you will destroy profits.
The best practice for sales force sizing is to use multiple tests to determine headcount. Once you suspect 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 a focus on the customer.
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.
The following simple tests can be utilized to look across other dimensions to check if your sales force is sized properly:
Key Takeaway: Sizing your sales force to align with ever changing market dynamics is critical if you want to hit your goal. 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: If you are struggling to hit your number, how will topline revenue look? It may be time to look seriously at headcount and get help in Resource Planning for next year. To request a workshop with an expert simply sign up for a MySBI account and check the box in your preferences to request a workshop.