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Sales capacity planning is a discipline in business that has the capability of adding percentage points of profit to EBITDA.

The company’s operational areas are well versed in capacity planning for manufacturing, production, and distribution. Much work has been done in this area through lean practices, performance, and capacity planning. There is a clear understanding of X activities will deliver Y output.

For sales organisations, it is considered that such an approach cannot be applied as there are so many variables related to selling. The goal is sales and the journey can alter on a daily basis. However, is that really true?

It is very common for a sales organisation to manage performance in a reactionary fashion, analysing and correcting performance problems are they arise. The sales managers respond to the issues believing that is how the sales team operates. The difference in the sales manager’s performance, being their response delay to identified problems. However, is the solution to the speed of response? The answer is no.

The solution lies in the ability of the company to ascertain capacity planning at the start of each year. The goal of capacity planning is to provide satisfactory activities to protect and grow customers in a cost-effective manner. To understand how much effort can be applied to new customers.

The three steps of Sales Capacity Planning can be transposed to the sales organisation those being:

  1. Determine Service Level Requirements The first step in the capacity planning process is to categorise the work that needs to be done and to quantify how that work gets done.
  2. Analyse Current Sales Capacity Next, the current capacity of the sales organisation must be analysed to determine how it is meeting the needs of the business.
  3. Planning for the future Finally, using forecasts of the future, determine business activity requirements. Implementing the required changes will ensure that sufficient capacity will be available to maintain customer levels, even as circumstances change in the future.

The process of planning provides a more rigorous analysis of the business capacity, its potential outputs, and importantly a clear line of what performance will deliver the desired outputs.

The process may seem a little clinical for some. However it will validate the workloads and ensure the expected outputs, sales goals, are achievable. It is a project that makes business sense.

A process applied many times over by Adele Crane for clients; it provides the platform for validating growth and establishment of sales goals.

The effect it can have on a business is significant. Read a case study where cash profit increase on the realignment of budgets/quota of $32,000,000 with an increased performance capacity of 34 percent, that in turn equated to a 2.2 percent increase in EBIT

To learn more about Sales Capacity Planning for sales organisations, please contact the office.

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