TITLE

Bringing Science to Sales

AUTHOR(S)
Lukes, Tim; Stanley, Jennifer
PUB. DATE
September 2004
SOURCE
Marketing Management;Sep/Oct2004, Vol. 13 Issue 5, p36
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
This article discusses return on sales investment (ROSI) in optimizing sales resources of a business organization. ROSI is an internal benchmarking method to help companies prioritize and assign sales resources against customers and products. Expanding beyond traditional return on investment measures, which focus primarily on revenues and standard cost allocations, ROSI seeks to include more intangible variables, such as a salesperson's time or the conversion rate for obtaining a new customer. Using this data to compile detailed analyses, such as average conversion rates across segments or average sale sizes of different products, sales executives will gain a well-rounded picture of the true economic return on their sales investments. When used correctly, this approach can help executives identify specific performance improvements by more effectively valuing the trade-offs among programs for allocating sales resources. Because ROSI is grounded in this economic understanding of returns, it is broadly applicable across industries and different sales approaches. Organizations that have developed insights based on ROSI into their customer base and sales operations have reaped significant revenue and margin improvements. For example, ROSI analyses helped one high-tech services company increase new sales by 60 percent with no incremental resource investments. This and other experiences strongly suggest that understanding the expected returns for different forms of sales investments is a powerful addition to an executive's toolkit. INSET: ROSI on the job.
ACCESSION #
14370960

 

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