Size of Sales Force

Session-6

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Determining the size of sales force
• Management’s second key decision on personal selling strategy is to
determine the size of sales force.
• Three approaches are used in estimating the size of sales force:
• Work load method
• Sales potential method
• Incremental method

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Work load method
• It is assumed that all salesperson should shoulder equal work loads
• Total work load involved in covering the company’s entire market is
estimated and then this is divided by the workload that an individual
salesperson should be able to handle.
• Six steps in applying the work load approach are as follows:

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1. Classify customers, both present and prospective, into sales volume
potential categories
1. Class A, Large 150 accounts
2. Class B, Medium 220
3. Class C, Small 510…..Total 880

2. Decide on length of time per sales call and desired call frequencies
on each class
1. Class A: 60 min./call * 52 calls/yr = 52 hrs/yr.
2. Class B: 30 min./call*24 calls/yr = 12 hrs/yr.
3. Class C: 15 min./call*12 calls/yr = 3 hrs/yr.

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3. Calculate the total work load involved in covering the entire mkt.
 Class A: 150 accounts* 52 hrs/yr. = 7800 hrs
 Class B: 220 accounts*12 hrs/yr. = 2640 hrs
 Class C: 510 accounts* 3 hrs/yr. = 1530 hrs
 Total = 11970 hrs

4. Determine the total work time available per salesperson

Suppose mgt. decides that salespeople should work 40 hrs per
week, 48 weeks per yr, then
40 hrs/week * 48 weeks = 1920 hrs/yr.

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5. Divide the total work time available per salesperson by task.
assume that mgt. specifies that sales personnel should apportion
their time as follows
Selling task 45 % 864 hrs
non selling task 30 % 576 hrs
Travelling 25 % 480 hrs
total 1920 hrs

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6. Calculate the total no. of salespeople needed.
11970hrs/864 hrs = 14 salespeople needed

• This approach is attractive to practicing sales executives

• Easy to understand and easy to apply.

• Disadvantage: it does not consider profit in calculations

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Sales potential method
 It assumes that performance of the set of activities contained in the job description represents
one sales personnel unit.

 If mgt. expects all salesperson to perform as specified in the job description, then the no. of
salesperson required will be equal to the unit of sales personnel required.

 No. of rupees of sales volume that each salesperson should produce is estimated.

 This amount is divided into forecasted sales volume– the company’s sales volume objective– and
allowance for sales force turnover which results in an estimate of the no. of salesperson required.

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• N = S/P *(1+T)
• N = no. of sales personnel units
• S = forecasted sales volume = Rs. 10,00,000
• P = estimated sales productivity of one sales personnel unit = Rs. 100,000
• T = allowance for rate of sales force turnover = 10%

• N= 11 sales personnel units.

• It is assumed that sales potentials are identical in all territories.

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Incremental Method
 Best approach to determine the sales force size.
 Net profits will increase when additional sales personnel are added if
the incremental sales revenues exceed the incremental costs
incurred.
 Most difficult to apply.
 For this method to be used, it is necessary for the company to first
develop a sales response function.
 Sales response function is a quantitative expression that describes
the relationship between the amount of personal-selling effort and
the resulting sales volume.

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• Sales volume must be sensitive to changes in no. of sales personnel.
• This method is not useful where personal selling is not the primary
means of marketing sales.

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Individualizing selling strategies to customers
• After the kind and size of sales force is determined, sales force
recruited, trained and assigned to the field, it is highly important for
each salesperson to individualize his or her dealings with each
customer.

• Their job is to influence the customer behavior so that both can be

benefited and contribute to the achievement of the company’s
personal selling objectives.

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