Avis bu


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With Salesforce CRM, managers can truly own the sales process, with total visibility into all information
about prospects and customers, all in one place. They can see the status of their pipeline, deals in progress,
projected revenues, and the performance of their reps. They can also stay on top of emerging trends—and
move quickly to take advantage or avoid mistakes. With this information,
they can easily identify which deals need help, which reps are doing well,
who needs coaching, and what it all means to the bottom line.

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Avis bu

  1. 1. 1Sales Budgets
  2. 2. 2Sales Budget• Why a Sales Budget?
  3. 3. 3Benefits of Budgetinga) Improved Planning:Action to be taken is described inquantitative terms.
  4. 4. 4Benefits of Budgetinga) Improved Planning:Action to be taken is described in quantitative terms.b) Better coordination & communication:All departments have budgets which give future course ofaction – interaction between departments.Eg. Increased Sales Increased ProductionIncreased Finance Increased MIS /HR
  5. 5. 5Benefits of Budgetingc) Control & performance evaluation Control &performance evaluation:Budgets outline objectives and responsibilities soperformance evaluation and control is easy. Eg.Expense monitoring,d) Psychological benefits:Instills profit orientation / expense control / culturein organization
  6. 6. 6Types of Budgetsa) Sales Budget
  7. 7. 7Types of Budgetsa) Sales Budget Detailed Plan showing the Expected Sales for aFuture Period …. Developed based on expected revenue (S-forecast) Gives sales by geographically location / productservice / sales people & customers First part of Master Budget; Usually forms thebasis for other operational budgets like finance &production.
  8. 8. 8Types of Budgetsb) Selling – Expense Budget Salaries / Commissions Traveling / Entertainment Training (new products)
  9. 9. 9Types of Budgetsb) Selling – Expense Budget Salaries / Commissions Traveling / Entertainment Training (new products)c) Administrative Budget & Profit Budget, Rent,Electricity, Office Furniture, StationeryGP = sales revenue – sales expenses
  10. 10. 10Methods of Budgeting for Sales Forcea) Affordability Method:Management develops SB depending onability to spend on sales function;usually fall short of sales dept’srequirementsb) Percentage of Sales Method:Multiply sales revenue by a given %;Sales revenue = Past revenue / forecastedfigure / weighted average of bothc) Competitive Parity:Based on budgeted figure of competitors orindustry average; competitor comparable insize and revenue is chosen
  11. 11. 11Types of Budgetsd) Objective & Task:a), b), c) do not take cognizance oforganization’s objective in developingbudget. Identify objective with employees Identify tasks for achieving objective Expenditure required Form budgete) Return Oriented Method:ROI, ROA, ROTA, ROAM (AssetsManagement)
  12. 12. 12Successful Budgeting
  13. 13. 13Successful Budgeting• Involvement & Support of Top ManagementSupport Budgeting & ensure all-roundparticipation; should not be viewed as a pressuretactic but as an effective tool for performance;ii. Flexibility in BudgetingShould be adjustable to fast changingenvironmental conditions
  14. 14. 14How to develop a Sales Budget
  15. 15. 15How to develop a Sales Budget1. Review and AnalysisCollection of past data and study of variancesbetween projected and actual2. Identifying market opportunity and problems3. Sales forecasting4. Communication of Sales goals & objectivesInvolvement of sales people is essential for mutualagreement
  16. 16. 16How to develop a Sales Budget5. Allocation of resourcesSelecting salespeople, tools of sales, financialresources6. Preparing the budgetBalance between sales force capability andmarket opportunities7. Approval for the budget
  17. 17. 17Sales Forecasts
  18. 18. 18• Market Potential Vs Sales Potential
  19. 19. 19Sales Forecasts1. Market Potential: Maximum possiblesales opportunities in part. mkt. segment,over a future period, assuring application ofappropriate marketing methods.2. Sales Potential: maximum possible salesopportunity for specific company in part.Mkt. segment over future period.MP : Total IndustrySP : Part. Co.
  20. 20. 20Sales Forecasts3. Sales Forecast: In Re/Units, how much ofa company’s product can be sold over afuture period, under a given marketingprogram on assumed set of external factors.
  21. 21. 21Market Potential Analysisi. Market identificationii. Ability to buyiii. Willingness to buySources of Data:a) Secondary: Environment Analysisb) Primary: Customers spending patterns,preferences
  22. 22. 22Why is SP different from SF?
  23. 23. 23Why is SP different from SF?i. Inadequate Production Capacityii. Inadequate Distributioniii. Inadequate Financesiv. Profit Orientation: Profitable Sales vs. PossibleSales
  24. 24. 24Analyzing Market Potentiali. Top down: Top mgmt. assesses market onbasis of macro environmental dataii. Bottom up: Micro enviro. factors of marketlike customer, products, ability to buy etc.are analyzed by lower management
  25. 25. 25Sales Forecasting Methodi. Qualitative Forecastsa) Judgment Methodsb) Counting Methods
  26. 26. 26Judgment Methods1. Delphi Technique: Systematic Method forobtaining consensus from a group ofexperts.2. Nominal Group Technique: Experts fromdiverse backgrounds3. Jury of Executive Opinion: Opinions ofexecutives at top level, based onexperience & utilization – Lacks scientificvalidity senior most opinion prevails.
  27. 27. 27Counting Methods1. User Expectations: Usually for industrialproducts by directly getting data fromcustomers.2. Sales Force Composite: Estimate ofexpected sales from every salesperson; canover/under estimate, lack broaderperspective.3. Market Tests: Limited area consumeracceptance.
  28. 28. 28Quantitative Forecasts1. Time Series Analysis: Estimation of futuretrends based on past performance; LongTerm ForecastsSales = T (long term variations × C(cyclical variations) × S (Seasonalchanges) × I (Irregular changes inenvironment)
  29. 29. 29Quantitative Forecasts2. Moving Average: Sales forecasts on salesof previous period: assumes environmentalirregularities in past will be there inpresent.nSales.......SalesSalesSales(Sales nt2t1tt1t−−−++++=
  30. 30. 30Quantitative Forecasts3. Exponential Smoothing Refines (2) – Moreweightage to sales in recent periods vis-à-vis older periods.
  31. 31. 31Quantitative Forecasts4. Regression & Correlation (Multiple Regression)Correlation: Degree of relationship between sales &other variables.Regression: Identify factor that influence sales & predictschanges in one variable due to changes in other. Most popular & widely used method Identifies relationship between sales and otherindependent factors on which sales is dependant.
  32. 32. 32Which method to use?a) Accuracy:Quantitative better than qualitative,short term: exponential method is accurate;more than six months: exponentialsmoothing and moving averagesmore than one year: regressionb) Costsc) Data availabilityd) Software availability: models andapplications for forecasting need differenttypes of datae) Companies experience in forecasting
  33. 33. 33Forecasting is effective if it is:
  34. 34. 34Forecasting is effective if it is:a) Accurateb) Cost effectivec) Comprehensibled) Timelye) Flexiblef) Plausible: Has to be done with sincerity henceno manipulation of figures under pressure can beallowed; Top Management has to be willing toface accurate estimates even if they are not rosy.g) Durable: By using quantitative techniques,combining forecasting techniques; usingsoftware.