Thomas knew that an average salesperson could make eight sales calls in one day and
worked roughly 200 days per year. Thomas also knew that, on average, a salesperson’s fully
loaded costs were $175,000 per year. To hire and train a salesperson tended to be expensive and
Thomas estimated that training and recruiting cost often equaled $50,000 in the first year. From
all this information, Thomas thought he should be able to determine the size of the sales force
required to meet the company’s 150% return on investment threshold. He knew that he had to
factor in carryover, and approximated 70% of first-year sales to carry over to second year and
70% of second-year sales to carry over to third year. Future sales would also need to be
discounted to get their present value. Thomas thought it would be appropriate to use the
industry’s average cost of capital (12%) for discounting sales. He also knew that he should
conduct multiple analysis, each analysis assuming a different time-horizon of maintaining the
sales force, because the training and recruiting costs would be a one-time investment rather than
an ongoing expense; however, given his time constraints for the meeting, he thought he would
calculate assuming that the sales force would be hired for only one year.
This
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Hi! I need tips and direction for solving salesforce sizing problems
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Hi Heba,
I think your question is missing the last part.
I would also encourage you to present your approach as well – this will help to provide better suggestions.
Best,
Francesco
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Hi Heba,
Could you either provide us the rest of the case or send a link to the material?
Thanks!
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Hello Heba, can you share plz:
- Full case
- Approach, so we can give feedback
Cheers,
Clara
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