subject: Using Indicators For Sales Planning [print this page] Using Indicators For Sales Planning Using Indicators For Sales Planning
With the intensification of sales planning and sales control, diverse sales indicators are becoming increasingly important as planning instruments of management. Effective planning is a core subject on all good management courses. The results of a survey of 316 European sales managers testify to this.Economic data considered when planning sales include: Industrial indicators 41%Purchasing power indicators 39%Retail trade indicators 30%Number of inhabitants 28%Wholesale trade indicators 26%Manual worker indicators 20%Property market indicators 19%Health indicators 10%Transport indicators 6%Agricultural indicators 3%Tourism indicators 2%The basic premise is - the bigger a company's sales force, the more economic data is used to support sales planning.1. Industrial indicatorsThe following data serves as a basis for planning: number of companies (79%), turnover (51%), number of employees (34%), investments (21%). Any planning which is done on the basis of industrial indicators depends greatly on the size of the company. Companies with 51 or more salespeople, for example, use investment indicators more often than small or medium-sized companies (40% as opposed to 21%).2. Purchasing power indicatorsPurchasing power indicators based on the net income of the population in the sales area, are primarily used by companies dealing in consumer goods.3. Trade indicators70% of the sales managers interviewed direct their planning in accordance with the number of retail and wholesale companies; 60% base their planning on the regional distribution of turnover and 25% on the number of company employees.4. Population indicatorsIf population statistics are considered in sales planning, 93% of the sales managers consider the regional cross-section of the whole population, 14% distinguish between age categories and 9% distinguish between the size of community. Also used by larger consumer goods companies as criteria for sales planning are the size of individual households as well as the number of married couples and babies.5. Property market indicatorsThe sales managers mainly consult four indicators: property investment (67%), planning and building permission (65%), condition of property (30%), completion of property (28%). When it comes to property investment, larger companies in particular distinguish between the renovation of old buildings and new buildings.6. Agricultural indicatorsHere is a list of the main agricultural indicators: the number of agricultural companies (73%), the condition of farming equipment (64%), arable land (27%). Other criteria include timber, livestock, special crops.7. Health indicatorsThese are the main indicators for manufacturers of medication and medically-related machinery: the regional distribution of doctors (63%) and the number of hospitals (50%). Other statistics used in sales planning include the number of hospital beds (44%), the number of pharmacies and chemists (34%) and pharmacy turnover (19%).8. Transport indicatorsWhen making sales estimates, indicators such as the number of lorries (74%) and cars (60%) are taken into consideration. The registration of new vehicles (cars 53%, lorries 47%) plays a secondary role.9. Tourism indicatorsThe number of tourist industries is an important planning criterion (71%). Others aspects which are considered include the number of beds/rooms (43%), and the number of bed and breakfasts (29%).Indicators are not laid down for all eternity. In practice, it is a question of being flexible - When asked, 74% of the sales managers said that they take into consideration developments both within and outside the company and adapt their sales planning accordingly.As covered on management courses any changes in the following external criteria would force a modification in sales planning:Activities of competitorsDevelopments in clients' turnoverPrice trendsDevelopments in branch specific investmentsTechnological developmentsDevelopments in customer ordersLegal plansDevelopments in environmental protectionDevelopments in customers' stockDevelopments in consumer spendingSurprisingly enough, economically relevant statistics such as the development of interest rates, the exchange rate, unemployment or public debt are given little or no consideration.Finally, here are some in-house reasons for transforming sales planning:Introduction of new products Sales promotion measures Change of conditions Advertising measures Extension of capacityEffective planning has many benefits especially with increasingly focus on maximising the return from the sales side of an operation. You can develop your planning skills on good sales management courses.
