Salesforce and channel Submitted by

Group 7
management
Section B

Metric Construction Formula Considerations Purpose

Workload Hours required to Workload= {current a/c* avg. time to Prospect numbers To assess the
service clients and service an a/c} + {prospects*time spent may be debatable. number of
prospects trying to convert a prospect into an active Time spent trying to salespeople
a/c} convert prospects required to service
can vary by a territory, and to
territory, ensure balanced
salesperson, and workloads.
potential client.
Sales This comprises the Sales Potential= No. of possible Doesn’t assess the To determine sales
Potential number of prospects a/c*buying power likelihood of targets. Can also
Forecast and their buying converting help identify
power. “potential” territories worthy of
accounts. an allocation
Definitions of of limited sales
buying power are resources
more an art than a
science.
Sales Goal Individual sales Sales Goal = Salesperson’s share of prior- Setting individual To set targets for
projections may be year sales in district*forecasted sales for targets on the basis individual
based on a district of prior year sales salespeople and for
salesperson’s share can discourage territories.
of forecasted sales, optimal
on prior year sales performance, as
and a share of strong performance
increased district in one year leads to
projections, or on a more aggressive
management targets in the next.
designed weighting
system.
Sales Force Effectiveness Sales force effectiveness ratios Depends on factors To assess the
Effectiveness metrics analyze sales =Sales/contact with clients that also affect sales performance of a
in the context of =Sales/ potential a/c =Sales/ active a/c potential and salesperson or team
various criteria, =sales/ buying power workload.
including calls, =Expense/sales
contacts, potential
accounts, active
accounts, buying
power of territory,
and expenses.
Compensation Effectiveness Compensation= Depends on factors To assess the
metrics analyze sales Salary+{sales*commission %} that also affect sales performance of a
in the context of potential and salesperson or
various criteria, workload. team.
including calls,
contacts, potential
accounts, active
accounts, buying
power of territory,
and expenses.
Break-even Sales revenue, Break-even no. of employees= Margins may vary To determine the
number of multiplied by margin (sales*{margin(%)- across products, appropriate
employees net of commission, commission(%)}/{salary+expense+bonus} time, and personnel level for
 divided by cost per salespeople. Sales a projected sales
staff member are not independent volume.
of the number of
salespeople.
All Numeric ACV= total sales of outlets carrying Reflects sales of To assess the
Commodity distribution, brands/ total sales of all outlets “all commodities,” degree to which a
Volume weighted by but may not reflect brand or product
penetrated outlets’ sales of the relevant has access to retail
share of sales of all product or category traffic
product categories.
Product Numeric PCV= total category sales of outlets Strong indicator of To assess the
Category distribution, carrying brand/ total category sales of all share potential, but degree to which a
Volume weighted by outlets may miss brand or product
penetrated outlets’ opportunities to has access to
share of sales of the expand category established outlets
relevant product for its category
category
Category The ratio of a PCV CPR= PCV/ACV To assess whether a
Performance to ACV distribution brand’s distribution
Ratio or a particular
retailer is
performing above
or below average
for the category
Inventories Total amount of Inventory Turns= Product Revenues/ May be held at To calculate ability
product or brand average inventory different levels and to meet demand and
available for sale in valued in ways that determine channel
a channel. Inventories days= Days in year/ inventory may or may not investments.
turns reflect promotional
allowances and
discounts.
Markdowns Percentage discount Markdowns= Reduction in price of SKU/ For many products, To determine
from the regular Initial Price of SKU a certain percentage whether channel
selling price of markdowns are sales are being
expected. Too few made at planned
markdowns may margins
reflect
“underordering.” If
markdowns are too
high, the opposite
may be true.
Direct The adjusted gross DPP= Gross margins – Direct product Cost allocation is To identify
Product margin of products, costs often imprecise. profitable SKUs
Profitability less direct product Some products may and realistically
(DPP) cost be intended not to calculate their
generate profit but earnings.
to drive traffic.