Sales Force Management and Sales Forecasting
What this domain tests
Sales force management and sales forecasting tests recruitment, training, motivation, compensation, evaluation, and forecasting methods. Numerical forecasting questions are common, so show the formula and the adjustment.
Core rules and concepts
- Management tasks are planning sales force size and territories, recruiting, selecting, training, motivating, compensating, supervising, and evaluating.
- Compensation may be straight salary, straight commission, or a combination; commission drives volume but can weaken service and teamwork.
- Quotas and key performance indicators (call rate, conversion, average order value, customer retention) guide evaluation.
- Qualitative forecasting includes executive opinion, Delphi method, sales force composite, and buyer intention surveys.
- Quantitative forecasting includes moving average, exponential smoothing, trend projection, and regression. Forecasts are estimates, not targets; forecast error should be measured.
Worked example
Three salespeople forecast 120, 150, and 130 units. The sales force composite is 400. The manager knows reps are optimistic and applies a 0.90 adjustment: 400 × 0.90 = 360 units. Reasoning: the composite uses field knowledge, but a documented bias correction improves accuracy. The 360 figure becomes the demand forecast; the target may be set higher after considering stretch and capacity.
Traps that cost marks
Do not treat a sales forecast as a sales target. Do not average forecasts without explaining why. Do not use commission-only pay for a consultative service without noting service risk. Do not ignore territory potential when setting quotas. Do not present a forecast without units and period.