As vice president of sales for a rapidly growing company, you are grappling with

Question

As vice president of sales for a rapidly growing company, you are grappling with the question of expanding the size of your direct sales force (from its current level of 60 national salespeople). You are considering hiring from 5 to 10 additional personnel. How would you estimate the additional dollar cost of each additional salesperson? Based on your company’s past sales experience, how would you estimate the expected net revenue generated by an additional salesperson? (Be specific about the information you might use to derive this estimate.) How would you use these cost and revenue estimates to determine whether a sales force increase (or possibly a decrease) is warranted?

Explanation / Answer

when there is potential growth in the market and scope for increase the sales in the market, we can work on increasing the sales force. in the given example first i prefers to recruit 5 sales people. and each person will be assign some targets in given markets, once if they are able to reach the target next i may plan to recurit additional 5 people.

to evaluate this task the base is additional revenue generated by the people and the additional cost occurs to them. every one is treating as cost center and how much we are spending on him and how much revenue is he generating to the firm must be considered.

if the revenues are more than cost then the decision is applicable and benefited to the firm. if the costs are higher than revenues then i should think about other alternatives.

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