The fundamental equation of sales (part 1)

How much can you ask of one of your sales consultants / account managers? Where is the limit between reachable and unrealistic? How many units can your team REALLY sell? How do you know if the budgeted income for the next year is tangible?

Well, in my 10+ years sales experience I found out the hard way that sky is one of my favorite limits but not the most often occurring one. There is a limit in EVERYTHING. There is one saturation point in all aspects of your job. Oh, yes! Even if you are a fresh promoted Sales Manager, start thinking about limits: your limits, your consultants /account managers limits. And then, strive to reach these limits.

Here is one of the main equations you have to take into consideration when establishing limits:

X=T/(H*ARPU*N)

where:
T - Number of targeted units to sell for one of your consultants (Target)
H - Number of reached goals on 100 attempts (Hit Rate)

ARPU - The number of targeted units covered by an achieved objective - Average Rate Per Unit N - Number of salesmen in your department
X - Number of required actions for the dream 100% Target achievement

By evaluating the number of necessary actions for your target achievement you can estimate the outcome of the month.
What do I mean by that? I mean that the number of necessary actions could well be too much for your department. More hours needed than available, more people needed than available etc. Or on a contrary the next month could be a great step towards your promotion.

Reading my next posts you will find few case studies and then my solutions to each identified problem.

In the end, I would love to hear your opinion on this subject and dare you to speak up your mind. Do you know other ways of KNOWING if or how you will achieve your targets?

Please use the comments option below.