Module04sales deployment.ppt

8/13/2019 Module04sales deployment.ppt

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Sales Organization Structure&

Sales Force Deployment

Module Four


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Sales Organization Structure


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Sales Force Specialization Continuum

SpecialistsCertain selling

activities for certain

products for certaincustomers

GeneralistsAll selling activities

and all products to

all customers

Some specialization

of selling activities,

products, and/or

customers


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Flat Sales Organization

Span of Control

ManagementLev

els

National

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

Span of Control vs. Management Levels


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TallSales Organization

National Sales

Manager

Span of Control

M

anagement

Levels

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

District

Sales

Manager

Regional Sales

Manager

Regional Sales

Manager

Span of Control vs. Management Levels


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National Sales Manager

Regional Sales Managers

District Sales Managers

Sales Training Manager


Salespeople

Staff Position

Line Position

Line vs. StaffPositions


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Organizational

Structure

Environmental

Characteristics

Task

Performance

Performance

Objective

SpecializationDynamic

sales

environment

Nonroutine Adaptiveness

CentralizationRelatively stable

sales environment Repetitive Effectiveness

Selling-Situation Factors Organizational OptionsSelling Situations


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GeographicSales OrganizationNational Sales Manager

Zone Sales Managers (4) Zone Sales Managers (4)

District Sales Managers (20)

Salespeople (100) Salespeople (100)


Eastern Region Sales Manager Western Region Sales Manager



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ProductSales OrganizationNational Sales Manager

Office Equipment Sales Manager Office Supplies Sales Manager


Salespeople (100) Salespeople (100)



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MarketSales OrganizationNational Sales Manager

Zone Sales Managers (4)District Sales Managers (25)

Salespeople (150)


Commercial Accounts

Sales Manager Government AccountsSales ManagerSales Training

Manager

Salespeople (50)


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FunctionalSales OrganizationNational Sales Manager

Field Sales Manager Telemarketing Sales ManagerRegional Sales Managers (4)

Salespeople (160)Salespeople (40)

District Sales Managers (2)District Sales Managers (16)


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Develop Major Account Salesforce

Assign Major Accounts to

Sales Managers

Assign Major Accounts to Salespeople

along with Other Accounts

Sales Organization StructuresMajor Accounts Options


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Comparison ofSales Organization StructuresOrganizational

Structure Advantages Disadvantages

Geographic

Low Cost

No geographic duplicationNo customer duplication

Fewer management levels

Limited specializationLack of management

control over product or

customer emphasis

Product

Salespeople become expertsin product attr. & applications

Management control over

selling effort

High cost

Geographic duplication

Customer duplication


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Comparison ofSales Organization Structures

Market

Salespeople develop

better understanding ofunique customer needs

Management control over

selling allocated to different

markets

High cost


FunctionalEfficiency in performing

selling activities


Customer duplication

Need for coordination

Organizational

Structure Advantages Disadvantages


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HybridSales Organization StructureNational Sales Manager

Major Accounts

Sales Manager Regular AccountsSales Manager Office EquipmentSales Manager Office SuppliesSales Manager

Field Sales

Manager TelemarketingSales Manager

Commercial Accounts

Sales Manager Government AccountsSales Manager

Western

Sales Manager EasternSales Manager


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1. How much selling effortis needed to cover accounts and

prospects adequately so that sales and profit objectives will

be achieved?

2. How many salespeopleare required to provide the desired

amount of selling effort?

3. How should territories be designed to ensure proper

coverageof accounts and to provide each salesperson with areasonable opportunity for success?

Sales Force deployment decisions can be viewed as

providing answers to three interrelated questions.


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Interrelatedness ofSales Force Deployment Decisions

How much selling effort is needed to cover

accounts and prospects adequately so that sales

and profit objectives will be achieved?

How many salespeople are required to provide the

desired amount of selling effort?

How should territories be designed andsalespeople assigned to territories to ensure

proper coverage of accounts and to provide each

salesperson with a reasonable opportunity for

success?

Allocation of

Selling Effort

Sales Force

Size

Territory

Design


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Single Factor

Models

Easy to Develop and Use

Difficult to Develop and Use

LowAnalyticalRigor

HighAnalyticalRigor

Portfolio

Models

Decision

Models

Allocation of Selling EffortAnalytical Approaches


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Allocation of Selling Effort:Single Factor Models

Accounts classified into categories based onone factor, such as volume potential

All accounts in the same category areassigned the same number of sales calls

Effort allocation decisions are based on theanalysis of only onefactor and differencesamong accounts in the same category are notconsidered in assigning sales call coverage


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Allocation of Selling EffortPortfolio Models Accounts are grouped by specific

criteria to determine their value to the

firm ie.

Account (Growth) Opportunity - an accountsneed for and ability to purchase the firms

products

Competitive (Advantage) Position - thestrength of the relationship between the firm

and an account


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Allocation of Selling Effort:Decision Models

Simple Basic Concept - to allocate sales

calls to accounts that promise the highest

sales return from the sales calls

Optimal number of calls in terms of sales

or profit maximization


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Sales Force SizeKey Considerations Sales Volume Growth

Anticipated increases

Sales Productivity

The ratio of sales to selling costs

Sales Force Turnover Should be anticipated


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Sales Force Size: Analytical Tools

Salesforce size = Forecasted sales / Average sales / person

The Breakdown Approach

Is used to determine the number of salespeople needed

to generate a forecasted level of sales.

It is weak conceptually.

The concept underlying the calculations is that sales

determine the number of salespeople needed

putting the cart before the horse.


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Sales Force Size: Analytical ToolsThe Workload Approach

Determines how much selling effort is needed to

adequately cover the firms market.

Then the number of salespeople required to provide thisamount of selling effort is calculated.

This approach relatively simple to develop and is sound

conceptually.

Number of salespeople =Total selling effort needed

Average selling effort per

salesperson


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Sales Force Size: Analytical ToolsThe Incremental Approach

Its basic concept is to compare the marginal profits and

marginal costs associated with each incremental

salesperson.

The major advantage of this approach is that it quantifies

the important relationships between salesforce

size, sales, and costs.

However, the incremental method is difficult to develop,

and it cannot be used for new sales forces wherehistorical data and accurate judgments are not

possible.


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Designing TerritoriesTerritories consist of whatever specific accounts are

assigned to a specific salesperson. The territorycan be viewed as the work unit for a salesperson.

Territory Considerations Trading areas

Present effort

Recommended effort


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DESIGNING TERRITORIES

EXTREMELY RARE

Most often territories evolve

with market development & volume,And are revised / adjusted

on an ongoing basis.


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DESIGN GOALS

EQUALITY OF SALES

WORKLOAD

GROWTH POTENTIAL


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SIX DESIGN STEPS

1. Select a control element for territoryboundaries / size.

2. Determine location & potential of customers.

3. Determine basic territories4. Assign sales people to territories.

5. Establish territorial coverage plans for sales

reps.

6. Monitor sales & cost of sales on an ongoing

basis.


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STEP ONE

TERRITORIAL SIZE (miles covered)

Boundaries (usually political or geographical):

BASED ON: REGION (WESTERN CANADA)

PROVINCE (BC)

CITY / COUNTRY (PRINCE GEORGE / VANDERHOOF,

QUESNEL, ETC.)


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STEP THREE

TO DETERMINE BASIC TERRITORIES USE

EITHER:

BUILD UP METHOD:

Establish individual performance parameters

(workload capacity: # of calls per day x # of days),

frequency / miles, account types a, b or c, length

of call.

Draw out individual territory boundaries

Adjust as needed


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STEP FOUR

Assigning sales people to territories

Need to match personality of the SR tothe personality of the territory

(ie. miles, account type, culture, etc.) Can be a management tool

Beginner territories

Penal territories Plum territories

Territory adjustment need is ongoing


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STEP FIVE

Territory coverage The plan of how the territory is to be

serviced

Call sequence / frequency, routing

Sales management should only do theinitial set up

Assigned rep should submit modificationswith as their territory knowledge develops.

Managements role is to set performancestandards e.G. Calls per day, etc.

Need to factor in account merchandising,prospecting.


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STEP SIX

Monitor sales

Cost of sales on an ongoing basis.


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Sales Organization Structure

&


A dynamic management undertaking

that must be constantly

assessed and fine tuned

to ensure the ideal balance

between profitability

and the development of

continued sales growth.

Documents

Module04sales deployment.ppt