Organizing the Sales Effort

8/4/2019 Organizing the Sales Effort

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Organizing the

Sales Effort



4-2

Organize Around Custome rs

Å Historical

Å Product-ce nt e re d

Å Expe rtise in fe ature s and f unctions

Å Today

Å Custome r-ce nt e re d

Å

Expe rtise in busine ss issue sÅ Sale s re source s deploye d to provide

be st se rvice to be st custome rs

Source: HR Chally Group (2007), The Chally World Class Excellence Research Report:The Route to the Summit. Dayton, OH: HR Chally Group.



4-3

Å Ide ntify purpose s of sale s organizationÅ Unde rstand diff e re nt h orizontal organizational structure s of a sale s force.

Å Outline major issue s in ke y account and t e am se lling.

Å Discuss ke y ve rtical structure issue s in

sale s organizations.Å Ide ntify important issue s in starting a new sale s force from the ground up.



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Purpose s of Sale s Organization

Å Divide and arrange activitie s so the firm can be ne fit from spe cialization of labor

Å Provide for stability and continuity in firms se lling e fforts

Å Provide for coordination of activitie s

assigne d to sale s force and to departme nts in the firm



4-5

Division and Spe cialization of Labor

Å Incre ase productivity -spe cialists can be come

proficie nt at assigne d tasksÅ Divide require d se lling activitie s to gain maximum

be ne fits within the sale s force



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Å Line organization

Å Ve rtical

Å Chain of command runs from chie f sale s exe cutive down through le ve ls of subordinat e s

Å Each subordinat e re sponsible to one pe rson



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Å Line and staff organizationÅ Ve rtical (most common)

Å Se ve ral sale s manage me nt activitie s assigne d to separat e spe cialists

VP Sales

Director of

Sales Training

Director of Distributor

Relations

Director of

Sales Promotion



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Stability and Continuity

Å Organize activitie s without re gard to tale nts of curre nt

e mployee sÅ Pe ople can be traine d to fill

positions

Å Same activitie s will be carrie d

out e ve n if de signat e d individuals re ce ive promotions or le ave



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Sale s Organization Structure

Å Horizontal divide s se lling activitie s among sale s force

Å Ve rtical assigns authority for spe cific sale s manage me nt activitie s



Horizontal Structure Options

Outside Age nts

Company Sale s Force

Ge ographic

Co-Marke ting

Product

Natl Ke y Accounts

Marke t/Custome r Type

Te am Se llingSe lling

Function

Se llingCe nt e rs

MatrixOrganizations

OR

Te le marke ting

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4-11

Outsourcing the Sale s Force

Å Type s of age ntsÅ Manufacture rs repre se ntative s

Å Se ll part of the out put of the ir principalsÅ Take ne ithe r owne rship nor physical posse ssion

of goodsÅ Cove r spe cific t e rritory and spe cialize in limit e d range of comple me ntary products

Å Se lling age ntsÅ Do not take title or posse ssion of the goods the y se ll

Å Compe nsat e d by commissionsÅ Broad authority to modify price s and t e rms of sale

Å Active ly shape manufacture rs promotional and sale s programs



4-12

4.1

Six Cs of finding the

right rep

Source: Dan Hanover, ´Independents Day,µ Sales & Marketing Management, April 2000,

pp. 65²68.

1. Compatible line s

2. Compatible t e rritorie s

3. Compatible custome rs

4. Cre dibility of the rep

5. Capabilitie s

6. Cre dits



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Outsourcing Conside rations

Å Economic Crit e ria

Å Control

Å Transactions costs

Å Strat e gic Flexibility



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Ge ographic Organization

Å Simple st and most common me thod

Å Individual sale spe ople assigne d to separat e ge ographic t e rritorie s

Å Re sponsible for pe rforming all activitie s ne ce ssary to se ll all products



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Å Doe s not provide be ne fits

associat e d with spe cialization of labor

Ge ographic Organization

Å Lowe st costs

Å Trave l time and expe nse s

minimize d

Å Sale s administration

and ove rhe ad costs kept low



4-164.3

Ge ographic sale s organization



4-17

Å Duplication of e ffort

Product Organization

Å Sale spe ople mast e r e ff e ctive se lling

me thods for single or re lat e d products

Å Close r alignme nt of sale s and production

Å Sale s manage me nt controls allocation of

se lling e ffort across the line

Separate sales force for each product (or category) inthe line



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4.4

Sale s force organize d by product type



4-19

Å Possible highe r se lling and

administrative costsÅ Duplication of e ffort

Custome r Type /Marke t Organization

Å Be tt e r unde rstanding of custome r nee ds

Å Incre ase d familiarity with ce rtain busine sse s

Å Incre ase d control ove r allocation of se lling e ffort

Natural extension of marketing concept and strategy

of market segmentation



4-20

4.5

Sale s force organize d by custome r type



4-21

Å Custome r ob je ctions to switch to maint e nance sale spe rson

Å Fee lings of rivalry

be t wee n the sale s force

Se lling Function Organization

Å Skills matche d to sale s function

Å De ve lopme ntal sale spe ople oft e n a succe ssful alt e rnative

Salespeople specialize in performing different selling

functions ± e.g. prospecting and developing new

accounts versus maintaining and servicing existing

customers



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Te le marke ting

Å Form of organization by se lling function

Å

Qualifying pot e ntial new accountsÅ Se rvicing existing accounts quickly

Å Seeking repe at purchase s from existing accounts that cannot be

cove re d e fficie ntly in pe rsonÅ Providing quick communication of newsworthy de ve lopme nts



4-23

4.2 Database Capabilitie s and Te le marke ting

Source: KenSpralling, ́ Centex Houses Ranks Highest in Customer Satisfaction in 10

major: U.S. Markets, According to Independent Study,µ www.investors.com , September 14, 2005; Alicia Orr, ́ Predicting a Need,µ Target Marketing, February 2001, pp. 62²64.

Database Database AnalysisSoft ware

Te le marke tingCustomize d

Dire ct Mail

Colle cts/provide s information

Formulat e s prospe cting solutions matche s home owne rs against othe r data to qualify custome rs, pre dict

int e re st; ge ne rat e s prospe ct unive rse

Prequalifie s prospe cts, can transf e r to sale spe rson to close sale

Follows-up with prospe cts not re ady to buy, provide s re sponse ve hicle s (web addre ss, toll-free #)



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National and Ke y Accounts

Å Separat e corporat e division/sale s force

Å De live r high-le ve l custome r se rvice

to attract and maintain large and important custome rsÅ Ke y account sale s exe cs

Å Busine ss manage rs capable of managing ke y accounts

Å Customize products and se rvice sÅ Plan and imple me nt ke y account

busine ss plans



4-25

Te am Se lling

Å Int e grat e s functional spe cialists with custome r re lationshipspe cialists

Å ID t e am structure that mee ts custome r nee ds

Å Be ne fits

Å Custome r que stions answe re d fast e rÅ Custome rs can spe ak dire ctly with de sire d spe cialist



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Othe r Te am Se lling Structure s

Å Se lling ce nt e r brings toge the r individuals from around the organization to he lp sale spe rson

Å Matrix organization e mploys dire ct-reporting sale spe ople who support int e rnal consultants with spe cialize d expe rtise

Å Multi le ve l se lling sale s t e am

consists of pe rsonne l from various manage rial le ve ls who call on the ir count e rparts in the buying organization



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Co-Marke ting Alliance s

Å De ve lop marke ting and sale s programs to se ll int e grat e d

syst e ms dire ctly to the ultimat e custome r



4-28

Logistical Alliance s and Comput e rize d Orde ring

Å Custome r point of view -

Å Conve nie nt

Å Flexible Å Le ss time consuming

Å How will comput e rize d re orde r

syst e ms change the role of the sale s force?



Ve rtical Structure Issue s

Span of Control

Manage rial Le ve ls

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4-30

Å Re duce d one -to-one communication

due to large r #of subordinat e s

Å Manage me nts may be le ss

e ff e ctive , ne gating cost savings

Large r Span of Control

Å Gre at e r control/ re sponsive ne ss

due to f ewe r manage me nt laye rs

Å Lowe r admin

costs



4-31

Span of Control

Å Re duce span of control whe n:

Å Sale s task is complex

Å Profit impact of e ach sale spe rsons pe rformance is high

Å Sale spe ople are we ll paid and

prof e ssionalÅ Also, at highe r le ve ls in the organization



4-32

Manage rial De cision Le ve ls

Å How much, whe re should the manage rial authority lie?

Å Hiring, firing, e valuation



Manage rial De cision Le ve ls

Importance of decision = Managerial decision level

Sales force pay = Managerial decision level

Complex selling tasks = Managerial decision level

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4-34

Manage rial Se lling Re sponsibilitie s

Å Manage rs oft e n active in sale s to ke y accounts

Å

Organizations value the ir se lling skills

Å Manage rs value commissions, contact with marke t place

Å Drawback some manage rs ne gle ct manage rial re sponsibilitie s



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4.6

4.6

Line and staff sales organization

Documents

Organizing the Sales Effort