7 - Controlling the overall selling effort

Summary

The dynamic management and sales force size control at Syntex Laboratories

A few years ago, Syntex Laboratories implemented a decision support system to estimate the optimal size of the sales force they should use (Lodish, Curtis, Ness, and Simpson 1988). Managers at different hierarchical levels estimated the sales market sensitivities to selling effort for various product lines and market segments. The sales force resources (reflected by mentions of a product or details) were optimally allocated to products and market segments. The objective was to allocate salespeople's time to those calls and mentions that were the most profitable to the firm. The final solution was provided as a list of the average number of mentions of each product that should be made to clients in every market segment.

The total time resources (and consequently, the required number of salespeople and the size of the sales force) were gradually increased until net profits started declining. As a result, it was possible to estimate the optimal sales force size and the optimal allocation of the resources simultaneously.

The procedure led to an increase in the size of the sales force from 433 to over 700, which was much larger than had been anticipated by management. The Syntex managers, however, had developed such confidence in the procedure that had been followed during the decision-making process, that they decided to accept those conclusions and dramatically increased their sales force.