If you are managing a Field Sales or Outbound Sales organization, your most important resource and your biggest expense is people. Therefore, it’s critical to make sure that you have the right number and type of resource covering the right opportunities, in order to maximize your sales output. This is often called “sales capacity planning”.

Sales capacity planning is both an art and science. You will need to leverage data, historical trends, expected future trends and your gut feelings to come up with a solid capacity plan or estimate. I also recommend involving your partners in Marketing and Finance in this exercise.

Sales Capacity plans are often created in a Microsoft Excel format, which make them easy to update, maintain and consider different versions and assumptions.

To create a capacity plan, here are some of the elements you will need to consider:

- The Target Audience: Which customers you want to “cover” with a Sales FTE. This may include active customers, lapsed/lost customers, prospects or a combination. This should also include geographic, industry, company size, market, seasonal and other company specific considerations. Once completed, your target audience should be quantified into a specific number or numbers. Ex. 100,000 active customers, in the financial services vertical with between 1,000 and 5,000 employees in Texas

• Important: Your entire target audience may include 1 million customers however, your budget may not allow coverage for all. Therefore, you should prioritize or rank order the target customers from the most opportunity to the least amount of opportunity. This data will be important as you finalize your capacity plan.

- Your Sales Coverage Model: By which method, face to face, telephone or email, you want to reach or “cover” your customers. And, how often per year. There are some customers you may only want to reach out to once per year, while others require quarterly contact.

- The Expected Sales Productivity: There are only so many selling hours in a week, month and year. Estimate how many sales attempts your Reps can make in the given time frame and the expected results. Remember to remove expected training or meeting times AND to assume a less than 100% decision maker contact rate.

- Your Expense and Sales Budget: At this point is where the “art” comes in. You want to build a capacity plan that allows you to reach your sales target, while also meeting your expense budget. For this reason I recommend setting up the capacity model with flexible variables, i.e. a table or MS Excel chart where you can tweak up or down, specific numbers such as:

• Number of FTE
• All Productivity Metrics: Ex: calls, contact rate
• All Sales Metrics: Ex. Close rate, average deal size

By considering all of these variables you can look at capacity planning from both the bottom up and the top down, to ultimately hone in on the right number of sales resources best aligned with the right sales opportunity, to meet your business objectives.

This can be a somewhat complex exercise, so linking in your Finance and Marketing analytics team members will make your life much easier.

Good luck!