Nuts and Bolts of Sales Management: How to Build a High-Velocity Sales Organization by Treace John R

Author:Treace, John R.
Language: eng
Format: epub
Publisher: Emerald Book Co.
Published: 2011-08-31T16:00:00+00:00

The officer in charge must set the example and ensure that all of the departments’ employees stay within the constraints of the expense budget. To facilitate compliance it is necessary to have a timely expense reporting system that all department heads review on a routine basis. If you have a weekly business review with your direct reports, consider covering each person’s spending levels in relation to his or her budget. In some situations, it may be necessary to monitor individual expense reports and promptly act upon any exception. Send a strong message to your team that overspending will not be tolerated.

Sometimes you will be faced with exceptions, situations where for practical reasons you need to spend over budget in one area of the business. When this happens, a strong manager will find another place to cut expenses so that the overall sales department budget is not exceeded.

WHAT IS LEVERAGING?

Leveraging is an important process in that it forces us to become more efficient. Simply put, it means getting more done with less—for example, producing more sales at less expense represented as a percent of overall sales. However, there is a point where leveraging is not feasible. There is a zero-sum game point at which expenses cannot be reduced. In situations where sales compensation is straight commission and there is no ability to reduce the commission rate due to contracts or other reasons, it is difficult to leverage the commission expense line. But it is possible to leverage expenses in other areas. As a company gets larger with higher annual revenues, for example, it is usually possible to keep meeting expenses as a percent of sales from increasing year over year.

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