A System of Sales Analysis Using Internal Company Records

Abstract

out sales costs getting out of hand? It is a well known and accepted fact that the application of sales effort is subject to the economic law of diminishing returns. If the fact is recognized, it becomes apparent that additional sales effort is in many cases not so efficient as better directed and coordinated sales effort. Basically, the objective of any sales analysis is to provide information which will assist the salesmanager in better directing and coordinating the sales activity. In any scientific analysis, the basic approach is that it is necessary to understand the parts which comprise the whole in order to understand the whole. This same principle can be applied to sales analysis. In order to understand the sales problem of any company, it is first necessary to divide the problem into parts. If even a relatively small number of these parts can be improved, it will be reflected in the efficiency of the total sales effort. The objective of this paper is to present a method of segregating these various factors or parts and analyzing them. The methodology described will not solve the problems; it will only set out the parts so that they can be compared with some standard or norm. The tools that are used for this segregation are somewhat analogous to the tools used by the accountant and financial analyst in reaching conclusions as to the relative profitability of a business enterprise. In this case, however, it will entail the analysis of the relative efficiency of various aspects of the company's marketing organization. Analysis of this type will draw certain seemingly mathematical conclusions in the form of ratios and other indices.