Getting Started With Sales Capacity Planning
Planning pretty much always makes your life easier. The same can be said for planning and sales. That’s why sales capacity planning is such an important aspect of your business plan.
What is sales capacity planning?
Sales capacity planning is the planning process where you determine your company’s production capacity in regards to the demands and expectations associated with your product. Your capacity is the maximum output of work that your team is capable of producing in a specified time, such as a month or quarter. One of the key factors in this planning process is to plan your given output of work while keeping any obstacles such as product delay or quality control in mind.
How can you strategize with sales capacity planning?
Sales capacity planning can be broken down into four different strategies:
Lead strategy is the most aggressive of the four because you increase your work capacity with the anticipation that demand will increase. It’s an aggressive strategy because the end goal is to attract your competitor’s customers by showing them how your company is better. Lead strategy can be more difficult because your target customers are typically already with a company and product and you must convince them of your competition’s weakness and your advantages. Lead strategy can be more difficult and have higher stakes because you are planning and increasing capacity only for the anticipation of growth. Basing off anticipation can be harmful in scenarios that involve rapidly changing or unpredictable products.
Adjustment strategy is about being responsive and agile. making small adjustments based on your market demand. These changes include either increasing or reducing capacity in some way. In addition to adjusting your capacity based on market and customer demand, it can be adjusted due to product changes.
Match strategy is where you increase your capacity slowing to address any changes in demand. Match strategy is a pretty safe strategy because your workload changes with demand. Typically, this can help eliminate the risks associated with lead or lag strategies but your capacity isn’t set and is constantly changing.
Lag strategy is when your team or company is running at maximum capacity or even over capacity. This strategy is typically when demand is high or increasing. This strategy is typically safer than one such as lead strategy because the risk of over building is minimized. Lag strategy helps eliminate some excess work, but can lead to opportunity loss due to not meeting demand.
No matter what strategies you use, sales capacity planning is crucial. Without this planning, any differences between the capacity your company is working at and the demand of your customers will lead to inefficiencies and discrepancies. The capacity that you work at can be adjusted by making changes to your technique, using new materials, changing your hours worked, changing the number of workers you have, and more.
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