Calculation Questions, Answered
Sales Compensation with Commission Bonus = Salary ($) + [Sales ($) * Commission (%)] This formula determines how much a salesperson will earn in a business or marketing job. It considers their salary, which is the fixed amount they get paid each year, and adds to it their commission bonus. The commission bonus is based …
Effective Labor Rate = Labor Sales ($) / Hours Sold/Billed (#) The effective labor rate is a way for businesses to figure out how much money they make from the work their employees do. It’s calculated by dividing the total amount of money made from selling labor by the number of hours that were worked …
Weighted Share of Sales Allotment = (Salesperson’s Share of Prior-Year Sales in District (%) * Assigned Weighting (%)) + (Territory’s Share of Sales Potential in District (%) * (1 – Assigned Weighting (%))) The Weighted Share of Sales Allotment is a way for businesses to determine how much each salesperson should be responsible for selling …
Sales Goal = Salesperson’s Prior-Year Sales ($) + (Forecasted Sales Increase for District ($) * Territory’s Share of Sales Potential in District (%)) This formula helps businesses and marketers determine how much they need to sell to meet their goals. It considers a salesperson’s past sales, the predicted increase in sales for the region, and …
Sales Potential = Number of Possible Accounts (#) * Buying Power ($) This formula helps businesses determine how much money they can make by selling their product or service. By multiplying these two numbers together, we can find out the total sales potential – in other words, how much money the business could potentially earn …
Sales Force Territory Workload = [Current Accounts (#) * Average Time to Service an Active Account (#)]+[Prospects (#) * Time Spent Trying to Convert a Prospect into an Active Account (#)] This formula helps businesses figure out how busy their salespeople will be. It considers the current customers and how long it takes to serve …
Average Retention Cost = Retention Spending ($) / Number of Customers Retained (#) This formula helps businesses determine how much money they spend to keep their customers. To find the average retention cost, you divide the amount of money spent on keeping customers by the number of customers that are still with the company. This …
Break-Even Acquisition Rate = Acquisition Spending / (Initial Margin + CLV) * 100 The Break-Even Acquisition Rate is a way for businesses to figure out how many customers they need to make a profit. It looks at how much money they spend on getting new customers (like advertising and promotions) compared to the amount of …
Prospect Lifetime Value = Acquisition Rate (%) * [Initial Margin ($) + CLV ($)] – Acquisition Spending ($) This equation is used in business or marketing to determine a potential customer’s value over their lifetime. It considers how likely it is for the company to get new customers and how much money they spend on …
Customer Lifetime Value = Margin ($) * (Retention Rate (%) / (1 + Discount Rate (%) – Retention Rate (%)) Customer Lifetime Value is a way to determine how much money a company makes from one customer over their entire relationship. It considers how much profit the company gets per sale, how likely the customer …