Sales Force Effectiveness:

Increasing Profit through Sales Force Effectiveness

Many companies overlook their sales organizations as an area for profit improvement. Frequently cited reasons include:

• A reluctance to jeopardize the "revenue engine" especially when sales results meet or exceed forecasts
  
• Traditionally, the sales focus is on volume generation
  
• Sales costs are frequently expressed as a percentage of forecasted revenue

While a focus on the cost of sales is important, true leverage in sales force economics stems from identifying and correcting problems such as these:

• Improper size and deployment of the sales force
  
• Ineffective sales compensation programs
  
• Inefficiencies in sales time usage
  
• Ineffective pre-order support, on-site sales approach or post-sales follow-up
  
• Inappropriate skill level of field sales personnel
  
• Weak field management supervision
  
• Ineffective cost and activity controls

In our experience, few companies have all these problems. At the same time, all companies have opportunities to improve one or more of these factors. Fine-tuning a sales organization provides a positive shift in the ratio of sales costs to revenue. Even a small shift typically represents both a revenue increase and cost reduction with results dropping directly to the bottom line. At a minimum, undertaking such an effort is consistent with one's goals to reduce costs and to compete more cost effectively.