What are marketing and sales controls?

Discussion About Your Marketing and Sales Controls

After working on your marketing and sales strategy, it is important to establish measurements that focus on key controllable variables that reflect performance results in your marketing and sales efforts.

Philip Kotler provides us with a list of the most common performance metrics. They are average sales calls per week per salesperson, average dollar sales per contact per salesperson, average cost per sales call and/or per sales transaction, number of new accounts established per salesperson, number of lost accounts per salesperson, number of customer contacts per salesperson, and total selling costs. But these metrics are most relevant to larger, more established ventures.

For early stage ventures we recommend revenues per employee as a benchmark of efficiency. First, it demonstrates how your venture stands up to competitors and leaders in your space.

Some of the highest benchmarks are in the high-tech world, as shown by these examples of revenues per employee for 2002:
– Palm, $1,189,000
– Dell Computer, $874,000
– Cisco, $594,000
– Siebel Systems, $561,000
– Apple, $558,000
– Microsoft, $531,000
– IBM, $268,000

Second, and most importantly, this benchmark controls “employment creep,” or when head count grows faster than sales. Conversely, a steady rise in sales per employee is a sign of improving efficiency. But too great of an increase suggests that you may have an understaffed venture, and that you’ll need to keep an eye out for employee burnout. A static number signals inefficiencies that might otherwise go unnoticed. For example, “bureaucracy build-up” occurs through paperwork and meetings. Such inefficient systems can stall your venture pretty quickly.

The benchmark can also be used to compare and measure the productivity of one salesperson, or one sales team, against another. As a result, inefficient performers can get trimmed, and critical capital resources can get re-allocated and marshaled into activities where they will count the most. As John Dillon, CEO of Salesforce.com, says, “It’s like organizational Darwinism. It forces you to make a selection.”

SOURCE: Roadmap To Entrepreneurial Success