SIZE OF SALES FORCE:

• Sales organization structure helps in determining the size of sales force or people
required.
• It is a Complex decision because different territories have difference requirement of
sales force
• Competition, customer needs and demands and nature of customer impacts the size
of sales force.
• Sales force more then cost and profit's will increase and if sales force less than
required loss in sales and profits.
• Methods to decide optimum sales force are:
 Workload method
 Sales potential method
 Incremental method
 WORKLOAD METHOD
• Assumption is their that all salespeople have
equal workload.
• STEPS TO CALCULATE SALESFORCE SIZE:
 Classify prospective customers as per their
sales potential.
 Decide time required per sales call and
desired call frequencies for each class of
customer.
 Calculate total work load
 Decide the total work time available per
salesperson
 Decide total work time available by
different activities per sales person hour
  Calculate total number of sales person needed:
Advantages of workload method:
• Simple
• Conceptually strong
• Beneficial for all types of selling
situations
Disadvantages of workload method:
• Does not counts sales productivity
• Salesforce turnover will not be
known
 SALES POTENTIAL METHOD:
• In
  this method sales manager estimates the
productivity of the average salesperson with
average sales performance and helps in sales Advantages of sales potential
volume forecasting. method:
• Simple method to follow
• Used to decide sales force’s size
• Straight forward
• Formula used: (1+T) Disadvantages of sales potential
N= no. of sales force required method:
S= annual sales forecast • Conceptually weak
• Leadtime for recruitment and
P= estimated productivity of average salespeople
training for optimum
T= estimated percentage of annual salesforce productivity is not known
turnover
INCREMENTAL
METHOD:
• It is based on marginal analysis theory
of economics
• In this method net profits will increase
when additional salespeople are
added, if the incremental sales
revenues exceed the incremental
costs.
Advantages of Incremental method:
• conceptually accurate as it tells about
the relationships between sales, force
size, sales volume costs and profits.
Disadvantages of incremental method:
• Difficult to apply, as its needs historical
data
• Development of sales force response
function is required to know
relationship between salespersons
effort and sales volume results.
• New companies can not follow this