Sales Force Size Worksheet A manufacturing company has an annual sales forecast of $50 million. 1. Salespeople in the industry average approximately $2,000,000 sales revenue each. Calculate the sales force size using the breakdown sales approach 2. The company typical allocates 8% of revenue to the sales force to determine the sales force budget. The direct cost to support a sales person is $200,000 (salary, benefits, expenses). Calculate the sales force size using the percentage of sales approach. 3. A sales manager calculates the number of sales calls required to service all the accounts in the territory. Accounts are classified as A, B or C based on account size and growth potential. "A" accounts should be seen once per week, "B" accounts once per month, and "C" accounts once per quarter. There are 180 "A" accounts, 300 "B" accounts and 435 "C" accounts. On average, a sales person works 200 days per year and makes 3.5 sales calls per day. Calculate the sales force size using the workload approach 4. The company has a sales force of 22 and cost of the sales organization is $4.4 million. What is the expected increase in revenue and cost of adding 3 sales people? Exercise You have just been hired as the regional sales manager for Canada for a company called DEF. You have the budget to hire three salespeople and must design territories for each salesperson. Since DEF is new to Canada you don't have any historical data, however, marketing research has provided estimates for market potential and workload for each province in Canada. a) How would you assemble the provinces into three territories? b) What other factors would you consider in designing the territories? c) Sketch the organizational chart Workload (Sales Calls) 170 Province Maritimes Quebec 250 430 170 Market Potential $1,000,000 $1,600,000 $3,500,000 $1,000,000 $2,000,000 $2,800,000 $1,600,000 $500,000 $14,000,000 290 Ontario Manitoba Saskatchewan Alberta BC 400 320 110 YN&N 2140 Total BCIT. SCHOOL OF BUSINESS Org Chart - DEF Canada Territory Province Market Potential Workload (Sales Calls) Total A B Total C Total