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.

1. 1
Sales Budgets

2. 2
Sales Budget
• Why a Sales Budget?

3. 3
Benefits of Budgeting
a) Improved Planning:
Action to be taken is described in
quantitative terms.

4. 4
Benefits of Budgeting
a) Improved Planning:
Action to be taken is described in quantitative terms.
b) Better coordination & communication:
All departments have budgets which give future course of
action – interaction between departments.
Eg. Increased Sales Increased Production
Increased Finance Increased MIS /
HR

5. 5
Benefits of Budgeting
c) Control & performance evaluation Control &
performance evaluation:
Budgets outline objectives and responsibilities so
performance evaluation and control is easy. Eg.
Expense monitoring,
d) Psychological benefits:
Instills profit orientation / expense control / culture
in organization

6. 6
Types of Budgets
a) Sales Budget

7. 7
Types of Budgets
a) Sales Budget
 Detailed Plan showing the Expected Sales for a
Future Period ….
 Developed based on expected revenue (S-
forecast)
 Gives sales by geographically location / product
service / sales people & customers
 First part of Master Budget; Usually forms the
basis for other operational budgets like finance &
production.

8. 8
Types of Budgets
b) Selling – Expense Budget
 Salaries / Commissions
 Traveling / Entertainment
 Training (new products)

9. 9
Types of Budgets
b) Selling – Expense Budget
 Salaries / Commissions
 Traveling / Entertainment
 Training (new products)
c) Administrative Budget & Profit Budget, Rent,
Electricity, Office Furniture, Stationery
GP = sales revenue – sales expenses

10. 10
Methods of Budgeting for Sales Force
a) Affordability Method:
Management develops SB depending on
ability to spend on sales function;
usually fall short of sales dept’s
requirements
b) Percentage of Sales Method:
Multiply sales revenue by a given %;
Sales revenue = Past revenue / forecasted
figure / weighted average of both
c) Competitive Parity:
Based on budgeted figure of competitors or
industry average; competitor comparable in
size and revenue is chosen

11. 11
Types of Budgets
d) Objective & Task:
a), b), c) do not take cognizance of
organization’s objective in developing
budget.
 Identify objective with employees
 Identify tasks for achieving objective
 Expenditure required
 Form budget
e) Return Oriented Method:
ROI, ROA, ROTA, ROAM (Assets
Management)

12. 12
Successful Budgeting

13. 13
Successful Budgeting
• Involvement & Support of Top Management
Support Budgeting & ensure all-round
participation; should not be viewed as a pressure
tactic but as an effective tool for performance;
ii. Flexibility in Budgeting
Should be adjustable to fast changing
environmental conditions

14. 14
How to develop a Sales Budget

15. 15
How to develop a Sales Budget
1. Review and Analysis
Collection of past data and study of variances
between projected and actual
2. Identifying market opportunity and problems
3. Sales forecasting
4. Communication of Sales goals & objectives
Involvement of sales people is essential for mutual
agreement

16. 16
How to develop a Sales Budget
5. Allocation of resources
Selecting salespeople, tools of sales, financial
resources
6. Preparing the budget
Balance between sales force capability and
market opportunities
7. Approval for the budget

17. 17
Sales Forecasts

18. 18
• Market Potential Vs Sales Potential

19. 19
Sales Forecasts
1. Market Potential: Maximum possible
sales opportunities in part. mkt. segment,
over a future period, assuring application of
appropriate marketing methods.
2. Sales Potential: maximum possible sales
opportunity for specific company in part.
Mkt. segment over future period.
MP : Total Industry
SP : Part. Co.

20. 20
Sales Forecasts
3. Sales Forecast: In Re/Units, how much of
a company’s product can be sold over a
future period, under a given marketing
program on assumed set of external factors.

21. 21
Market Potential Analysis
i. Market identification
ii. Ability to buy
iii. Willingness to buy
Sources of Data:
a) Secondary: Environment Analysis
b) Primary: Customers spending patterns,
preferences

22. 22
Why is SP different from SF?

23. 23
Why is SP different from SF?
i. Inadequate Production Capacity
ii. Inadequate Distribution
iii. Inadequate Finances
iv. Profit Orientation: Profitable Sales vs. Possible
Sales

24. 24
Analyzing Market Potential
i. Top down: Top mgmt. assesses market on
basis of macro environmental data
ii. Bottom up: Micro enviro. factors of market
like customer, products, ability to buy etc.
are analyzed by lower management

25. 25
Sales Forecasting Method
i. Qualitative Forecasts
a) Judgment Methods
b) Counting Methods

26. 26
Judgment Methods
1. Delphi Technique: Systematic Method for
obtaining consensus from a group of
experts.
2. Nominal Group Technique: Experts from
diverse backgrounds
3. Jury of Executive Opinion: Opinions of
executives at top level, based on
experience & utilization – Lacks scientific
validity senior most opinion prevails.

27. 27
Counting Methods
1. User Expectations: Usually for industrial
products by directly getting data from
customers.
2. Sales Force Composite: Estimate of
expected sales from every salesperson; can
over/under estimate, lack broader
perspective.
3. Market Tests: Limited area consumer
acceptance.

28. 28
Quantitative Forecasts
1. Time Series Analysis: Estimation of future
trends based on past performance; Long
Term Forecasts
Sales = T (long term variations × C
(cyclical variations) × S (Seasonal
changes) × I (Irregular changes in
environment)

29. 29
Quantitative Forecasts
2. Moving Average: Sales forecasts on sales
of previous period: assumes environmental
irregularities in past will be there in
present.
n
Sales.......SalesSalesSales(
Sales nt2t1tt
1t
−−−
+
+++
=

30. 30
Quantitative Forecasts
3. Exponential Smoothing Refines (2) – More
weightage to sales in recent periods vis-à-
vis older periods.

31. 31
Quantitative Forecasts
4. Regression & Correlation (Multiple Regression)
Correlation: Degree of relationship between sales &
other variables.
Regression: Identify factor that influence sales & predicts
changes in one variable due to changes in other.
 Most popular & widely used method
 Identifies relationship between sales and other
independent factors on which sales is dependant.

32. 32
Which method to use?
a) Accuracy:
Quantitative better than qualitative,
short term: exponential method is accurate;
more than six months: exponential
smoothing and moving averages
more than one year: regression
b) Costs
c) Data availability
d) Software availability: models and
applications for forecasting need different
types of data
e) Companies experience in forecasting

33. 33
Forecasting is effective if it is:

34. 34
Forecasting is effective if it is:
a) Accurate
b) Cost effective
c) Comprehensible
d) Timely
e) Flexible
f) Plausible: Has to be done with sincerity hence
no manipulation of figures under pressure can be
allowed; Top Management has to be willing to
face accurate estimates even if they are not rosy.
g) Durable: By using quantitative techniques,
combining forecasting techniques; using
software.