Unit 2-

Sales force organization

Sales force job Analysis and Description
Sales force recruitment and selection
Sales force training- Design and training methods
GD-1 and GD-2
( Case study)

Managing sales information and sales forecasting

Designing sales territories and sales quotas
Sales budgeting
Routing and scheduling of sales force
GD-3 and GD-4( Case study)

Organising sales department and link with other functional areas

Sales force motivation and compensation plan
Evaluating Sales performance
 Sales organisation
• Group of individuals with sales function
orientation for achieving quantitative and
qualitative goals.
• Execute sales plan and business goals.
• Have clear structure, roles and responsibilities.
• To achieve:
– Higher sales
– Increased market share
– Improved customer loyalty
 Factors influencing structure
• Products and services related factors
– Large and flat a lower level e.g. FMCG
• Organisation related factors
– Big organisation with resources
– Small organisation with limited financial recourses
– Management with centralised policy
– Management with de-centralised policy
• Marketing mix related factors
– Type of distribution channels: Own showroom vs Channel partner
– Price policy- FMCG Vs Automobile
• External factors:
– Past history
– Competition
Structural change in sales organisation
From top down command and
control-driven
Information processing
Compartmentalized knowledge
Functions retain power
Functions own skills
Dominant function leads
Narrow result focus (sub-
optimization)
Rewards are within chimneys
(functions)
Slow/bureaucratic
To horizontal and customer-driven
Knowledge creation
Shared knowledge
Core process team has the power
Core competencies supply skills
Leader represents team
Broad process focus (optimization)
Rewards are based on the overall
performance of the organization
Quick/empowered
 Type of saleforce organisation and
roles
• Line organisation
• Design by geographic territory
• Design by management function
• Design by product
• Design by customer
• Combined organisational design
Line organisation

President / Owner

VP (Sales)

Five sales people

Design by territory
 Design by management function
VP
(Marketing)

Staff Function Line Function

Advt / Sales Promotion Manager,

Sales Manager
Mgr Marketing Research

20 Salespeople
 Design by Product
President
(Marketing)

Product Manager (A)

Manager Manager Manager

(Sales) (Training) (Promotion)

Product Manager (B)

Manager Manager Manager

(Sales) (Training) (Promotion)
 Design by consumer
President
(Marketing)

Vice President
(Marketing)

Sales Manager Sales Manager

Sales Manager
Wholesalers Retail Sales
Industrial Relations

Sales People Sales People

Sales People
 Design by customer

Consumer
market Institutional
market Corporate
market

National Direct-to- Direct

Distributors home marketing Distributors Bundling Gifting

Regional
Distributors Consumer

Retailers

Consumers
 Sales organization
Key Account Sales( Mainly in B2B)
 Focus on CRM
 Classification based on ustomer profitability and value
analysis
 The few accounts give incremental returns
 National accounts- Geographically spread office across
nation

Sales process automation

 EDI – Electronic Data Exchange
 Emerging Sales organisation
 Agency and distribution selling

 Shared sales force

 Telemarketing

 TQM and team-based selling

 Forming-Ice breaking
 Storming-Role decision
 Norming-Final role and action plan
 Performing- Action on field
 Challenges: Motivation and recognition
 Major factors-Effective sales force
• Effective salesforce require:
– Careful selection: Balance in Job Description(JD)
and Manpower selected.
– Right aptitude and mind-set
– Careful planning
– Attention and guidance
– Training
– Motivation
 Salesforce Recruitment and Selection
Involves 4 stages:
• Human recourse planning process
• Recruitment stage
• Identification and Selection for best fit
• Orientation/Induction of employee
Challenge for Salesperson selection
• Criterion and characteristic of sales
person.
• Functional competencies
• Behavioural competencies

Performance= Ability X Motivation

 Number of Sales Person
• Factors
 Territories vary in their demand structure for
prospecting
 Product mix demands
 Levels and types of prospecting
 Nature of the customer segments

• Three method: to decide the number of sales

persons
Size of the Salesforce- Nos of Salesperson

–Affordability method (based on sales

budget)
• Cost and current sales level
–Workload method
• Frequency and number of sales call
–Incremental method
 Workload method

• Data about customer base & Classification:

• Type of customers( Based on Sales Potential)
• Nos of existing customer
• Nos of potential customers
• Total Nos of frequency of Sales Calls( Number of
Meetings with the customer)
• Length of one Call: Meeting time in customer call
(Number of (Number of (Ideal (Length
existing X Potential X frequency of X
of a call)
customers) customers) calls)
Number of sales people =
Ideal selling time available for a salesperson
 Example – Workload Method
Based on Sales potential there are following
customers:
1. Class A:500; (Direct Sales Team)-> 36 Calls/Yr & 60min/call
2. Class B:1000; (Direct Sales Team)->12 Calls/Yr & 30min/call
3. ClassC:2000; (Telemarketing Team)

Step 1: Calculate time require for each type of customer per year
Step 2: Calculate total workload to cover entire market
Step 3: Calculate time available for the sales person
Step 4: Calculate the total Nos of Salespersons needed
 Calculation- Workload Method
1. Class A:500; (Direct Sales Team)-> 36 Calls/Yr & 60min/call
2. Class B:1000; (Direct Sales Team)->12 Calls/Yr & 30min/call

Step 1: Calculate time require for each type of customer per year

• Class A:60 min/call x 36 calls/year= 2160 mins/year =36hrs/ year

• Class B:30 min/call x 12 calls/year= 360 mins/year =6hrs/ year

Step 2: Calculate total workload to cover entire market

• Class A: 36hrs/ year x 500= 18000 hrs/ year
• Class A: 6hrs/ year x 1000= 6000 hrs/ year
Total hours required = 24000 hrs/year
 Calculation- Workload Method
Step 3: Calculate time available for the sales person
1. Available time per week = 8 hrs/day x 5 days= 40 hrs/week
2. After holidays available weeks = 45 weeks/Yr
3. Total Time Available in Year= 45 weeks/Yr X 40 hrs/week= 1800 hrs/Yr
4. The above 1800 hrs is for (Selling +Non Selling Activities)
– Selling Activities = 40%
– Non Selling Activities =30%
– Travelling =30%
Selling time available= 40% X 1800 =720 hrs/Yr

Step 4: Calculate the total Nos of Salespersons needed

Nos of Salespersons needed= Time require to cover entire market/
Selling time available per salesperson
=24000/720 = 33.3 = 33 salesperson require

Weakness: It assume that all sales person work with equal efficiency. It also ignore the
revenue and profit from the customer as well as cost to serve the customer
 Sales Potential Method
1. Estimation of productivity of average sales person
2. Average performance and Forecast sales volume
3. Salesforce turnover(attrition) i.e. Resignation,
Retirement, Promotion
N= S/P (1+T)
N= Number of salespersons required( Size of Salesforce)
S= Annual Sales forecast for the company
P= Estimated productivity of average sales person
T= Estimated % of annual salesforce turnover(attrition)
Q: If the firm’s sales forecast is Rs. 50 crore for next year, the annual sales volume
productivity for average sales person is Rs 2 crore, and anticipated annual sales force
turnover is 20% . Calculated the number of salespersons required?
 Assumptions: Sales Potential method
• Does not include lead time require for hiring
and training sales persons
• Sales person’s productivity and potentials are
identical in all territories.
 Incremental Method
Based on the Marginal- Analysis theory of
economics.
– With additional salespersons, Profit will increase
– Additional revenue and Profit increase till additional
revenue from salesperson exceed the cost of
additional salesperson.
Q:ABC company Ltd. sales volume varies with salespeople working in
the market and currently sales volume is Rs 120,0000. The cost of
goods sold is 60% of sales. The salespersons receive a salary of Rs
120,000 per year and commission of 6% on their sales volume. Also
each salesperson gets travel an food allowance of Rs 6000 per month.
At present company has 30 sales persons and Sales Manager wants to
decide whether to add or not to add more sales people
 Calculation- Incremental method
No of Sales Cost of Gross Salaries Commiss Travel and Profit
sales Volume Goods Margin (E) ions ( F) Food Contribution
person (B) (C ) (D)=B-C Allowance (H)=
(A) D-(E+F+G)
31 1200000 720000 480000 120000 72000 72000 216000
 Learning Objectives
• Discuss the hiring and planning process

• Understand the recruitment, selection, and socialization processes

• Explain the concepts of job description and man specifications

• Know the sources and methods of recruitment

• Examine the methods of interview and apply these techniques in

different situations
 Roles of Sales Manager

• Performs sales management +HR management !

• Recruits, selects, trains, motivates, leads, controls, and
compensates sales teams
• Selection and recruitment of efficient sales people is always a
process of building competitive advantage for an organization
 Hiring process
Strategic position
Turnover/Attrition analysis Job qualification

Establish hiring Decide on the number of Job description

objectives salespeople to hire
Organizational
Identify best sources of recruitment characteristics
• Internal source of recruitment Company image
• External source of recruitment climate
Styles of supervision,
Generate database of compensation, and
candidates motivation plan of the
company

Evaluate candidates Salesperson’s

desirable
Select and induce candidates characteristics
to accept position

Socialize
 Planning for recruitment
1. Strategic position analysis

2. Turnover/ Attrition

3. Job analysis
 Gathering and organization of information

 Concerning the tasks, duties and responsibilities of a

specific job

4. Task inventory analysis and KSA matrix

 Job qualification

 Job description
 Challenges in Sales force recruitment

• Personality types matching to job profiles

• One of the measures that the organization looks in an

employee is:

– The ability to perform by an employee= Ability x

Motivation

– Level of motivation
 Sources of recruitment
• Internal sources
 Existing employees

 Lateral and upward moves

 Interns and cooperative students

 Employee referral programes

• External sources
 Industry sources

 Educational institutions and campus

 Recruitments

 Employment exchanges

 Placement consultants
 Social media….Way forward
• If you’re not building social media into your
recruiting efforts at this point, you’re not really
recruiting on par with the industry standard.
1. It’s the good way to reach job seekers.
2. Transparency goes both ways.
3. It’s part of a cultural shift.
4. It’s not the “good-old-boy” network anymore.
1. 73% of recruiters planned to invest more in social
recruiting.
 Challenges
• One of the biggest problems of hiring young
people in India is that many of them don’t want
to do the ground work, says Ronald C. Sequeira,
executive director of human resources at drug
company GlaxoSmithKline Pharmaceuticals Ltd.
• “People who come from a business school or are
chartered accountants they all want to
straightaway go into fancy jobs,” says Mr.
Sequeira.
 Challenges
• it’s important for young people to do entry-
level jobs early in their careers.
“When you (reach) the apex of your function to
make strategy, you need to know how things
work at the operating level,” . If you don’t
know then “That remains a challenge.”
 Sales force recruitment
Selection procedure
 Inviting application forms  Personality
 Personal interviews  Aptitude and skills
 Reference checks  Determination of terms of service
 Physical examinations  Appointment
 Psychological tests  Initial orientation
 Intelligence
 Socialization Process
• Process of orienting a new salesperson to the sales
organization, territory, or division in which he or she will be
working.

• Three stages of Socialization

Anticipatory stage

Encounter stage

Settling in
 Sales force training- Design and training
methods
Objectives:
• Improves the performance of the salespeople.
• Increase productivity and efficiency.
• To adapt in the changing market conditions
Challenges:
• Will the training program be effective in solving a problem?
• Will the investment in it be justified?
• Cost of program +Cost of analysing and evaluating
• Will it produce the desired or intended results?
 Outcome……
• Functional competency: Improves performance in the current job
and prepared for an intended job responsibility in the future.

• Leadership: Helps employees in personal growth and prevents

human obsolescence.

• Behavioural competency: Helps to bring behavioral change and

motivate them to contribute towards long term goal of
organisation.
 Training Process and Level of analysis
• The success of the training program depends
on the ability, skill, and motivation of the sales
trainer
The Training Process Levels of Analysis
Training need assessment Organizational level analysis

Design and conduct of a training Task level analysis

program

Individual level analysis

Evaluation of a training
program
 Training Needs
 Identification of specific problems
 Anticipating impending and future problems
 Management requests
 Interviewing and observing the personnel on
the job
 Performance appraisal
 Questionnaire survey
 Checklist
 Attitude survey
 Interpersonal skill test
 Sales Territory and objectives
• As per Maynard and Davis- “It’s a basic unit of
sales planning and control.”
• As per cranfield- “ A geographical area
containing the present and potential
customers who can be effectively and
economically served by single sales person,
branch, dealer or distributor.
 Objectives
 To match the selling efforts with selling
opportunities- Better Market Coverage
 Better sales planning and effective operational
control- Control Selling Expenses &
Contribute to salespersons morale
 To Assist in Evaluating Salesperson-
Salespersons evaluation
 To Aid in the coordination of personal selling
and advertising efforts- Better Coordination
 Sales Territory
• Its group of present and potential customers assigned at a
given point of time to :
– Individual salesperson,
– Group of sales person,
– A branch,
– A distributor,
– A delaer,
– Marketing organization
“Help to give direction to the process of sales planning
and control”
Profitable sales territory:
Has a number of potential customers that are willing to
buy the category of products sold under the firm’s brand
name.
 Designing a Sales Territory
• Factors:
– Size of organization
– Level of competition
– Number and quality level of the products in
portfoilio.
– Type and Quality of customer services
– Quality of sale person
– Transportation, communication and distribution.
 Designing a Sales Territory
• Basis- Charts, Maps and topographical
data.GIS(Geographical information system)
• GIS+ Transportation, communication and retail
outlets spread.
• Outcome: Probable purchase level, Purchasing
parity, Transpiration route.
• Geographical Control Units(GCU):
– For setting up geographical boundaries.
– Homogeneous and reasonable size with clear
boundry.
– E.g. Country , State, District, Block
Designing a Sales Territory
Selection of basic Geographic Control Unit(GCU)
Homogeneous trade area Reasonable size(Major/ minor)

Criterion for allocation

Current customers/Potential customers/Geographic size

Starting Point
Trading Area/District Headquarter/State capital

Territory Shapes
Wedge/Circle/Cloverleaf

Combine control units adjacent to starting point

Allocation criterion and work load analysis

 Criterion for GCU
• Initial boundaries:
– Customer Potential- Existing+ Potential
– Traveling + Call Norms
– Market growth rate
– Sales expense
• Work Load Analysis:
– Sales efforts
– Work require to cover each territory
– Account Analysis- Competition, Number of products,
Prestige of accounts, Level of buying influence
– Build up Method: Equalize the workload of sales person.
Based on Nos. of accounts, Nos. of calls, Duration of call,
Estimated time of travel
– Break-down method: Equalize the sales potential of
territories based on Potential sales volume and Productivity
 Starting Point
• Location point
– Trading Area- City or District head quarter.
– In case of B2B Selling / Large account- Starting
point is Location of account
– Central geographical location- State capital
– Sales Person’s home
• Control Units adjacent to starting Point
– Combine GCU
– Process of allocation and tentative sales territories
Routing, Scheduling and Time management
• Routing:
– Reduction in travel time and cost.
– Improve the territorial coverage.
– Critical in FMCG, Driver-cum-Sales person
– Routing Plan: Straight Line, Circular, Clover leaf
• Scheduling:
– Planning a sales person’s specific time of visits to
customers.
– Allocation of time based on activity( Admin tasks, Service
calls, Waiting/travelling , Telephone selling, Meeting time)
• Time Management Tools:
– Smartphone, SFA’s(Sales force Automation)
– Real-time Visit reports, customer orders, Inventories,
delivery status, Updated customer information before call
Strategic planning matrix
 New territories
• Assign the territories to the individual sales force.

• Suitable salespeople appointed for each territory and

the exact responsibilities are assigned.

• New salespersons appointed in areas closer to their

place of stay.

• Experienced salespeople are assigned remote

territories with a higher potential for growth and

sales realization.