If you grow your sales force too quickly it can be a huge problem. For starters, you may not have the expertise to manage it, and there may not be an established market or sales process in place for them to follow—leading to wasted time and money. It can also lead to frustration and disenchantment, which sooner or later morphs into high turnover.
On the flip side, if your sales force is too small you won't close all of the sales opportunities that could have been yours with the proper staffing. In these situations, your current sales force will feel overworked, underappreciated and under-compensated. Corners will be cut. Performance will suffer.
Have you thought about the size of your sales force lately? Is it too big or too small? How are you supposed to know?
The workload method
The workload method is a relatively simple way to determine the size of your company’s sales force:
Organize your potential customers into categories based on expected level of effort to manage them. Perhaps your company sells to consumers, small businesses and large businesses. The variance in effort required to close a sale for each type of customer warrants that each one be placed in its own category.
For each category, estimate the length of the sales cycle, amount of salesperson time, intensity and travel required to manage a potential customer throughout the entire sales cycle.
Based on these estimates, determine the aggregate salesperson time required for each category and across all categories.
Estimate the amount of time that each salesperson has available. Assume that all sales people will have an equal amount of time available (50 hours per week for example).
Divide the total amount of time required for all of your sales prospects by the amount of time available on average per sales person. The result is the number of sales people you should have in your sales force at a given point in time.
The workload method is relatively simple to calculate and manage, but has significant drawbacks. Assuming that all salespeople can or should handle an equal portion of the workload may not be realistic for your company. It’s also not the most productive way to allocate your sales team’s individual talents and abilities.
The sales potential method
The sales potential method builds on the workload method but adjusts for individual levels of effort and abilities.
Take the estimated number of sales people needed under the workforce method as a starting point.
Assume that this estimate is for a sales force that consists exclusively of “average sales people”. Consider each “average sales person” needed as a representative unit.
Rank your existing sales people as “below average,” “average” or “above average.” Estimate how much less a below average sales person can accomplish relative to an average one. Do the same for an above average sales person. For example, maybe a below average sales person is equivalent to 0.75 average sales people while an above average sales person is equivalent to 1.5 average sales people.
Using this ranking, determine the difference between your needed representative sales units and the actual units you have in your sales force. Adjust as needed.
This method offers a more realistic sales force estimate because it takes into account the individual abilities of each sales person.
Determining the proper size of your company’s sales force needs takes time and expertise. Start asking the question and set the goal of addressing this issue before the end of the quarter.