Page 57 - DMGT205_SALES_MANAGEMENT

Unit 4: Sales Strategy Formulation

Modified Formula Notes

If rate of turnover is 10%, then there is a modified formula for the number of sales persons.
N = S / P + T (S / P) = (S / P) (1+T)
For the above set of values
N = (100,000/10,000) (1 + 10/100) = 10 + 1 = 11 sales persons.

4.8.3 Work Load Method

This is the most complex method. According to this method, the assumption is that all sales
personnel will shoulder equal responsibilities. First the total work load is estimated and then it
is divided equally among all the sales people. There are six steps involved in applying the Work
load method.
Step 1
Customers should be classified into sales volume potential category A, B, C, etc. For example,
suppose there are 800 A/c's of the following type
A (Large Accounts) 100 in number
B (Medium Accounts) 200 in number

C (Small Accounts) 500 in number
Total Accounts = 800 in number
The break up of the accounts is done to facilitate planning, directing and control of the sales
force.
Step 2
Decide on the length of time per sales call and desired call frequency on each class of customers.
For example,
Class A = 60 min. × 52 calls/year = 52 hrs.
Class B = 30 min. × 24 calls/year = 12 hrs.

Class C = 15 min. × 12 calls/year = 3 hrs
Calling on A class customers would require one hour per customer and the call is to be made
every week. Therefore, for one A class customer 52 weeks will be required. Similarly, each B
class and C class customers would require 12 hrs and 3 hrs respectively per year.
Step 3
Calculate the total work load by multiplying the time taken by one customer into the no. of
customers
52 hrs × 100 = 5200 hrs
12 hrs × 200 = 2400 hrs

3 hrs × 500 = 1500 hrs
Total = 9100 hrs
Total work load as shown would be 9100 hrs for 800 A/c's of different types.

LOVELY PROFESSIONAL UNIVERSITY 51