Professional Documents
Culture Documents
Deployment Decisions
How large should my sales force be?
How should I structure my territories? Do I need to realign?
Allocation Decisions
How much emphasis should each product or segment receive?
How often should my reps call on each account and prospect?
Evaluation Decisions
What sales volume should I expect from each salesperson?
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Topics we’ll cover today
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What is a sales response function?
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Typical Sales Response Functions
Account 0 1 2 3 4 5 6 5
A 20 200 205 208 213 217 220
B 10 30 50 68 80 90 95
C 0 5 40 45 50 55 55
D 0 100 250 300 340 375 400
E 0 5 10 15 20 25 25
F 200 220 230 240 245 250 260
G 0 10 20 30 30 40 45
H 0 50 110 150 180 200 215
Present Hours Allocated
Total Hours Allocated: 5+1+2+3+1+5+2+1=20
Salesof Present Allocation: 912
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Criteria for Planning Across
Accounts
Efficiency
Routing
Planned versus Unplanned Calls
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Estimating Sales Response Functions
Regression (econometrics)
need lots of observations
historical data, restricted range- firms don’t experiment
limited ability to extrapolate outside the range of data
hard to handle non-linearities
Experimentation
let’s see what happens when we don’t call at all on our large
accounts
Subjective Estimates (judgment)
somebody’s estimates are treated as data and fit to a model
Examples: CALLPLAN and Syntex
Blitzing
blanket an area for a short time frame to assess the
responsiveness of the territory 6
How do we get subjective estimates?
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Syntex- Immediate Realizations
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Syntex- How Accurate were the
Original Estimates?
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Syntex- Model Forecast vs. Base
Plan and Results
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Advantages of the “Incremental/
Sales Response” Approach
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Single/Generalist Sales Force
Advantages
economies of scale in administration and calling
sometimes better access to the customer
can serve more needs of the customer
avoid confusing the customer
one person is accountable to the customer
Disadvantages
human tendency to focus: cherry picking
one blockbuster product gets all the attention
difficult to develop expertise on all products
Tends to be best where effort is the principal determinant of sales.
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Specialized Sales Forces
Advantages
task focus- new product launch
product focus- high tech, complex products, customized
products/services
coherent role for sales person
Disadvantages
internal communications problematic
no big picture
becomes awkward quickly
Tends to be best where skill is the principal determinant of sales.
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Dividing the Sales Force
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Next time:
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