article | June 9, 2012
When is the next new sales rep too many?
“As we keep adding sales staff, though, we are not sure how to determine how much is too much. Is there a way to calculate the point of diminishing returns to increasing the size of the sales force?”
Answering the question ‘when is the next new sales rep too many?’ requires some insight into the unique operating environment of the sales organization and its benchmark metrics. Some of the data points a company should be tracking include:
With these metrics in hand, you are ready to calculate the point of diminishing returns; the point where the gross contribution (margin) of each additional sales rep begins to taper off. See chart below.
There are several key points to consider when determining when to stop adding sales staff:
As you can see, Sales Force Sizing is a multi-dimensional exercise. If you want to learn more download our whitepaper on Sizing Best Practices.