Sales capacity planning: Are you getting the most out of your sales team?

Heather McLean by Heather McLean on January 2, 2020
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It's a business death knell: "But we've always done it this way!"

Getting stuck in a rut is bad for business, especially when it comes to your sales team. Just because you've had five sales reps in a region for years doesn't mean it's the ideal number. That's why you need a sales capacity model.

If you haven't reviewed your sales territories recently, business activity may have drastically changed. And if your sales reps have too many accounts or leads to follow up with, you're probably missing out on sales. On the other hand, if things have slowed down, you may be able to save on expenses by reducing staffing levels.

In this blog, we're going to show you how to evaluate your sales capacity and productivity. Armed with data, you'll be able to confidently plan for the future of your team.

Crunch the numbers on sales capacity

How many sales meetings can a rep attend?

In this example, we'll use a sales region that contains five territories:

looking at accounts per territory to figure out how many sales calls a salesperson should be making

Let's start by looking at how many accounts each sales rep can reasonably maintain. If you want to follow along with your own data, download our Sales Rep Capacity Calculator below!

Sales Rep Capacity Calculator

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You should already have a good idea of the activity levels you expect from your sales reps each week. For the purpose of this example, your sales reps have a target of four appointments per day, which equals 20 appointments each week.  If they have 49 selling weeks per year, they can attend 980 appointments.

Formula for calculating a sales person's annual meeting capacity

Breakdown between new and existing business

In Territory 1 there are 44 accounts. If your sales reps need to meet each account at least once a month, Territory 1 will need 528 yearly appointments to cover existing accounts.

Existing business formula

That means your sales person can dedicate about 46% of their time to meeting new leads.

After doing the same calculations for the other territories, the breakdown is:

Territory 1 – 54% on existing accounts, 46% on new business

Territory 2 – 51% on existing accounts, 49% on new business

Territory 3 – 54% on existing accounts, 46% on new business

Territory 4 – 56% on existing accounts, 44% on new business

Territory 5 – 53% on existing accounts, 47% on new business

So the average sales rep's week looks like this:

Sales reps are averaging 11 appointments per week with existing accounts

Evaluate other sales capacity factors

This is a pretty good balance, but there's more you can look at in your analysis. For example, you may already know that your sales people close 20% of the leads they meet, but that it takes two meetings on average to get there. In Territory 1, that means that approximately 45 new sales could be closed. If your average sale is $5,000, that means you're looking at $225,000 in new revenue for Territory 1. Is that in line with the targets and is it enough to reach your annual goals? If not, you need to make changes that can help you get there. You can make these calculations with your own statistics using our Sales Rep Capacity Calculator.

You should also consider whether your sales reps are able to book enough meetings in a week to meet their goals. If your reps have time for nine new business meetings but are only booking three, the situation needs a closer look. Your reps may need more training, there could be barriers you haven't considered, or there may not be enough leads in the area to support that level of sales activity. If that's the case, you may need to look at reducing the number of reps in the area.

Sales Rep Capacity Calculator

Download your free Sales Rep Capacity Calculator

Download Now

Create scenarios based on your sales capacity numbers

You've done your research, and here's what you've found: each territory has capacity for nine new business appointments each week, but they're averaging three. You've spoken to the sales reps and managers, everyone has tried to get those numbers up, but it seems like there just aren't enough new leads in the territories for that level of activity.

Now you need to consider cutting one of the five territories and redistributing the workload. In order to eliminate one territory, the other four would each have to add about four new meetings per week: three existing customers, one new lead.

Sales reps are averaging 11 existing account and three new business appointments
After the re-organization, sales people should do 13 existing and 4 new business appointments.

Territories 1-4 have an average of six open meeting slots each week. Essentially, you can eliminate one sales territory without a negative impact on your current numbers.

Based on that analysis, we can use eSpatial's balancing feature to re-organize our sales region from five territories to four.

This re-distribution helps you save on costs and gives the sales reps more opportunity to meet their targets. After the re-organization, sales reps should have a weekly breakdown of 13 existing customer and four new business meetings.

If you want to evaluate the capacity of your own territories, download our Sales Rep Capacity Calculator and sign up for a free seven-day trial of eSpatial.


Heather McLean Written by

Heather McLean

Manager Heather is eSpatial's Customer Communications Manager. With a background in journalism and communications, she specializes in making technical topics more approachable. Her articles dig deep into how businesses can use mapping software to achieve their goals.

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