Organizing the Modern Sales Force

Sales & Distribution Management Marketing 3345

Importance of Sales Organization Decisions

Organizing the activities and management of the sales force forms a major part of strategic sales planning Managers are becoming more proactive in restructuring A strong corporate vision and effective strategic market planning are closely linked with how the organization is structured and how it interacts with its customers

Purposes of Sales Organization

Activities should be divided and arranged in such a way the firm can benefit from the specialization of labor. The organizational structures should provide for stability and continuity in the firms selling efforts.
The structure should provide for the coordination of activities assigned to different persons in the sales force and different departments in the firm.

Division and Specialization of Labor

Increase productivity - each specialist can concentrate efforts and become more proficient at the assigned task Divide required selling activities to gain maximum benefits of specialization within the sales force Line organization - vertical organization, chain of command runs from the chief sales executive down through levels of subordinates

Selling Agent Decision and Product Life Cycle

Disengagement Decision

Re-engagement Decision

Manufacturer Re-employs Rep firm to lower fixed sales costs

Decline

Introduction

Outsourcing the Sales Force

Manufacturers

Representatives

intermediaries who sell part of the output of their principals. Take neither ownership nor physical possession of the goods they sell. Cover a specific territory and specialize in a limited range of complementary products.

Outsourcing the Sales Force

Selling

Agents

Intermediaries who do not take title or possession of the goods they sell Compensated by commissions from their principals Have broad authority by their principals to modify prices and terms of sale Actively shape the manufacturers promotional and sales programs

Considerations for Outsourcing: Break-even

Common Bases for Structuring the Sales Effort

Geographic

organization Product organization Organization by customer type or markets Organization by selling function

Geographic Organization

Product Organization

Organizing by Customer Type or Markets

Role of Telemarketing

Prospecting for and qualifying potential new accounts Servicing existing accounts quickly when unexpected problems arise Seeking repeat purchases from existing accounts that cannot be covered efficiently in person Gaining quicker communication of newsworthy developments

Doing the Math on Account Management

Field Rep

Telemarketing 25 1624 6500 1.2 $15 $117,000

Sales calls per day Sales calls per quarter Sales calls per year Salespeople required Cost per sales call Cost per year

5 325 1300 6.5 $250 $1,998,750

EVOLUTION OF SELLING METHODS - OLD

Stage in Selling Process
Prospect/ Qualify
Face-toFace Selling (FTF)

Present/ Close

Service/ Reorder

Large

FTF

FTF

Account Size

Medium

FTF

FTF

FTF

Small

FTF

FTF

TM

EVOLUTION OF SELLING METHODS - NEW

Stage in Selling Process
Prospect/ Qualify
National Account Management (NAM)

Present/ Close

Service/ Reorder

Large

NAM

NAM

Account Size

Medium

Telemarketing (TM)

FTF

FTF & TM

Small

TM

TM

TM

National and Key Accounts

Organizational

approach to deliver customer service necessary to attract and maintain large and important customers.

Sales

execs must be able to . . .

be business managers capable of managing key accounts customize products and services plan and implement key account business plans

Team Selling
Team

selling integrates functional specialists with customer relationship specialists. Benefits include:

Questions answered faster People with similar interests speak directly with one another

Alternative Organizations

Multi level selling sales team consists of personnel from various managerial levels who call on their counterparts in the buying organization Co-Marketing Alliances develop marketing and sales programs to sell integrated systems directly to the ultimate customer

Logistical Alliances and Computerized Ordering

From

the customer point of view, computerized ordering is

Convenient, Flexible and Less time consuming

How

will computerized reorder systems change the role of the sales force?

Vertical Structure of Sales Organizations

Key questions: How many levels of sales managers should there be?

How many people should each manager supervise? (span of control)

Building Blocks for New Sales Force Startup

Start with a strategy Appoint an expansion team Leverage existing strengths Go to the press Avoid compensation snafus Provide support

Sales managers assigned to create a new sales force should employ best practices