Using Indicators As Planning Instruments

 With the increase of sales planning control, planning instruments of management such as diverse sales indicators are becoming increasingly important. a core subject on all good management courses is effective planning. The results of a survey of 316 European sales managers testify to this.

Fiscal data considered when planning sales include:

The basic premise is - the bigger a company’s sales force, the more fiscal data is used to support sales planning.

1.     Industrial indicators

The 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. Investment indicators are more likely to be used by companies with 51 or more sales people, for example, far more than small or medium-sized companies (40% compared with 21%).

2.     Purchasing power indicators

Companies dealing in consumer goods, primarily use purchasing power indicators based on the net income of the population in the sales area.

3.     Trade indicators

70% 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 indicators

If population statistics are considered in sales planning, 9% distinguish between the size of community, 14% distinguish between age categories and 93% of the sales managers consider the regional cross-section of the whole population. Larger consumer goods companies also use the size of individual households and the number of married couples and babies as criteria for sales planning.

5.     Property market indicators

The sales managers mainly consult four indicators: completion of property (28%), planning, condition of property (30%), building permission (65%), and property investment (67%). When it comes to property investment, larger companies in particular distinguish between the renovations of old buildings and new buildings.

6.     Agricultural indicators

Here is a list of the main agricultural indicators: Arable land (27%), the condition of farming equipment (64%), the number of agricultural companies (73%).  Other criteria include livestock, timber, and special crops.

7.    Health indicators

These are the main indicators for manufacturers of medication and medically related machinery: the number of hospitals (50%) and the regional distribution of doctors (63%). 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 indicators

When 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 indicators

The 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 - 74% of the sales managers asked bear in mind developments both within and outside the company and modify their sales planning accordingly.

As covered on management courses any changes in the following external criteria would force a modification in sales planning:

Technological developments
Developments in customer orders
Legal plans
Developments in environmental protection
Activities of competitors
Developments in clients’ turnover
Price trends
Developments in branch    specific investments
Developments in customers’ stock
Developments in consumer spending

Surprisingly 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 internal reasons for modifying sales planning:

Change of conditions
Advertising measures
Extension of capacity
Introduction of new products
Sales promotion measures

Effective planning has many benefits especially with increasingly focus on maximising the return from the sales side of an operation. Good sales management courses can help develop your planning skills.
 

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