Modest upsizing is appropriate under certain conditions, especially if the sales leader was conservative with resource planning during the early growth stage. 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.
If you are a sales leader of a mature business, here are a couple of Sizing Strategies to consider when Resource Planning for 2012:
Working Smarter vs. Increasing Size
For mature businesses, smarter and more effective sales effort is a greater top-line revenue enhancer than sales force sizing. 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 sales force size. Rather than augmenting your number of reps, consider improving performance through targeted Sales Training or adjusting Sales Compensation to greater incent your reps.
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.
W.W. Grainger, a maintenance, repair and operational supply company increased top-line revenue by working smarter. Specifically, they moved account management responsibility to a less expensive inside sales team allowing the more expensive sales reps to focus on new business.
2012 is right around the corner. Do you have the right resource planning strategy for sizing your sales force to stay competitive and increase market share?