Salesperson's True Potential vs. Salespersons Profitability Index

Typically sales organizations measure only past sales performance and hence rely on historical metric. Sales people who brought in the most sales were considered ‘stars'. However, such direct measure was neither an accurate gauge of a sales person's present worth nor a good indicator of his or her potential. By developing a forward looking approach to forecast a salesperson's future value and linking sales performance with the types of training and incentives each salesperson has received, it is possible to optimize salesforce investments, boost revenue and profit and derive greater business value. Salesperson's profitability index (SPI) developed in this paper provides basis for internal benchmarking and helps sales organizations in measuring future value of salesperson. SPI is dependent on future value of sales people and salesforce investment. This research provides insights on how sales organization can incorporate SPI metric in salesforce investment and performance management to boost salesforce productivity and enhance competitive advantages