Slides Organizing the Salesforce

7/29/2019 Slides Organizing the Salesforce

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Sales Management: Shaping Future Sales Leaders

Organization of theOrganization of the

Sales ForceSales Force


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Organization of The Sales Force

Basic Management Function of ArrangingBasic Management Function of ArrangingThe Firms Sales ActivitiesThe Firms Sales Activities


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Tasks of The Sales Organization

1.Maintenance of order in achieving sales forcegoals/objectives

2.Assignment of specific tasks and responsibilities

3.Integration and coordination with other elementsof the firm


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How a Firms Goals Affect the Designof Its Sales Force

Organization of sales force is driven by strategic goals

Organizational sales structures serve a number ofpurposes that include

1.Serving buyers effectively in ways they want tobe

served

2.Operating efficiently and effectively asmeasured by

cost and customer satisfaction


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The Size of the Sales Force

BreakdownBreakdownMethodMethod

-- Divide forecasted sales revenue by averagesales dollars per salesperson


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The Size of the Sales Force

WorkloadWorkloadMethodMethod

1.Compute total sales call workload

2.Determine amount of work performed byeach rep

3.Factor in additional work responsibilities


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Workload Method


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DevelopingA Sales Organization


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Developing A Sales Organization

1.Formal & informal organization

2.Horizontal & vertical

3.Centralized & decentralized

4.The line and staff components ofthe organization

5.The size of the company


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Formal and informal organizations -Formal and informal organizations - every firm has aformal & an informal organization.

The formal organization is a creation of management

Informal organization is developed from the socialrelationships existing with in the formal organizationstructure.

CEOCEO

NSMNSM

RSMRSM

ASMASM

SalespersonSalesperson


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Informal organization

Communication pattern formed from the socialrelationship existing with in the formal organization

Salesperson ASM RSM NSM CEO

Manager Marketing distribution Manager NSM Manager AccountsManager Marketing distribution Manager NSM Manager Accounts


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Vertical Sales Organization

Several level of management, all reportingupward to the next level

CEO

NS

RSM

ASM

FS

SR


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Horizontal Sales Organization

Number of management level is small and number ofmanager at particular level is large

Chief Sales ExecutiveDistrict Sales Manager District Sales Manager District Sales ManagerDistrict Sales Manager District Sales Manager District Sales ManagerDistrict Sales ManagerDistrict Sales Manager

Karachi Multan Lahore IslamabadKarachi Multan Lahore Islamabad


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CentralizedCentralized

Responsibility and authority are concentrated at

higher level of management

DecentralizedDecentralized -Delegated to lower levels ofmanagement

- Structure is ineffective unless the assignment ofdecision making to lower levels of sales

management is accompanied by a completeauthority to carry out the decision.

A classic mistake?A classic mistake?

Result?Result?Failure to achieve the objectiveFailure to achieve the objective

Destroy/depress the moral of personnel involvedDestroy/depress the moral of personnel involved


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Line and Staff Marketing OrganizationLine and Staff Marketing Organization

Line function is a primary organizational activityLine function is a primary organizational activity

Staff function is a supporting organizational activity.Staff function is a supporting organizational activity.

In a marketing organization selling function is the lineIn a marketing organization selling function is the linecomponent.component.

Advertising, marketing research, sales training, andAdvertising, marketing research, sales training, and

distributor relations are considered as staff rolesdistributor relations are considered as staff roles


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Line Marketing OrganizationLine Marketing Organization

Vice President for sales

General Sales

Manager

Regional Sales

Manager N

Regional Sales

Manager C

Regional Sales

Manager S


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Line and Staff Marketing OrganizationLine and Staff Marketing Organization

Vice President for Marketing

General Sales Manager

Regional Sales

Manager N

Regional Sales

Manager C

Regional Sales

Manager S

------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Sales TrainingSales AnalystSales PlanningDistribution

Manager

Marketing

Research Advertising


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Best way to design a sales structure is toBest way to design a sales structure is to

Determine sales activities that must be performed toreach goals

Create sales structure that affords highest levels ofservice to buyers at lowest overall cost

Select, train and manage reps and managers tobecome experts in their assigned duties

Basic Types of Sales Organization


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Sales StructuresSales Structures

GEOGRAPHIC SPECILIZATION

CUSTOMER SPCIALIZATION

PRODUCT SPECIALIZATION


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Geographic Specialization

Sales organization in which selling personnel aregiven the responsibility for

direct selling activities in a givengeographical area

Territories are treated as separate profit center forpurpose of

analysis and evaluation

Is the most commonly used method

Simplicity explains its popularity among salesexecutives

Offers the advantages of adaptability and improvedcoverage


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Geographic-Based Structure


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Customer and product specialization approaches areCustomer and product specialization approaches aremore complex and should only be used if their specificmore complex and should only be used if their specific

features are critical for firms sales effortsfeatures are critical for firms sales efforts


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Customer Specialization Sales organization in which selling personnel are

organized by particular customer orindustry

The companys customer may require specialized

knowledge of their industry

Sales force is to focus on customers need andbuild the best possible relationship

Office equipment manufacturers have sales specialist

who deal only with educationalinstitution

Pharmaceutical companies have sales specialistsfor specific customers


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Customer SpecializationCustomer Specialization By type of IndustryBy type of Industry


Sales Manager

ElectronicsMkt

Sales Manager

Military Mkt

Sales Manager

Computer Mkt


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Customer SpecializationCustomer Specialization By Distribution ChannelBy Distribution Channel


Sales Manager

Exports

Domestic

Sales Manager


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Customer SpecializationCustomer Specialization By General type of CustomersBy General type of Customers


Sales Manager

Institutions

Sales Manager

Small Business

Sales Manager

Major Accounts


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Customer Specialization - Disadvantages Territories typically overlap.

May be two, three or more sales representatives of thecompany covering the same geographical area, but

serving different clients, which results inoften higher selling costs.

Lack of flexibility as specialists can not be redeployedin times of industry downturn

To avoid unwanted costs, customer specialization should

be used only if is required by the specializedbuyer need


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Product Specialization

Sales organization in which selling personnelconcentrate their efforts on particular product

lines, brands or individual items

The entire field force is divided by productgroupings (Pharmaceutical companies)

Product sales specialists are used when productscomplexity limits other options

High tech companies must have productspecialists who understand the

specialized needs of thecustomer and can use their detailed productknowledge to identify and develop specificapplications


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Product SpecializationProduct Specialization


Sales Manager

Product C

Sales Manager

Product B

Sales Manager

Product A


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Product Specialization - DisadvantagesProduct Specialization - Disadvantages

Territories typically overlap.

Two or more sales reps from the same company will call

on the same customer Expensive duplication of sales efforts


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Indirect Sales Channels

Independent sales representatives or agencies used by aIndependent sales representatives or agencies used by acompany in place of its own field sales forcecompany in place of its own field sales force

- Dealers, Agents, Brokers- Dealers, Agents, Brokers

Independent reps are an effective, low cost way to openIndependent reps are an effective, low cost way to openup new marketsup new markets

- Established contacts in local market area- Established contacts in local market area

- In depth territory knowledge- In depth territory knowledge

- Long term customer relationship- Long term customer relationship

- Community goodwill, company cant acquire on its own- Community goodwill, company cant acquire on its own


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Indirect Sales Channels

Independent sales representatives or agencies used by aIndependent sales representatives or agencies used by acompany in place of its own field sales forcecompany in place of its own field sales force

- Dealers, Agents, Brokers- Dealers, Agents, Brokers

Mostly, IBM sold its total product range (computers toMostly, IBM sold its total product range (computers totypewriters) through their own field forcetypewriters) through their own field force

Minicomputers and microcomputers withMinicomputers and microcomputers with smaller profitsmaller profitwere sold through indirect sales channelswere sold through indirect sales channels

Most suitable for small companies with limited resourcesMost suitable for small companies with limited resources


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Relations With Other Departments

Key Concern of Sales ManagerKey Concern of Sales Manager

Relation with other departmentsRelation with other departments

As per marketing concept, all business activities should beAs per marketing concept, all business activities should becoordinated to satisfy customer needcoordinated to satisfy customer need

Sales department is the key link, so coordinating the sales effort withSales department is the key link, so coordinating the sales effort withother departments is absolutely essentialother departments is absolutely essential


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Relations With Other Departments

Two types of departments sales MUST have goodTwo types of departments sales MUST have goodworking relationshipworking relationship

One, connected with marketing activities, advertising, marketingOne, connected with marketing activities, advertising, marketingresearch, sales promotion, product managementresearch, sales promotion, product management

Second, those with non marketing functions such as HR,Second, those with non marketing functions such as HR,manufacturing and financemanufacturing and finance

Top management is responsible for coordinating the activity of all theTop management is responsible for coordinating the activity of all thedepartments with in a companydepartments with in a company

A thorough understanding of other departments functions, and howA thorough understanding of other departments functions, and how

these relates to the sales efforts, is requiredthese relates to the sales efforts, is required Coordination may be achieved through policies, writtenCoordination may be achieved through policies, written

communications, meetings and similar formal management activitiescommunications, meetings and similar formal management activities

Successful coordination between departments often informalSuccessful coordination between departments often informalcommunications as wellcommunications as well


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Relations With Other

Relation with other marketing functionRelation with other marketing function

Marketing mixMarketing mix

Combination of the various techniques used to satisfy customersCombination of the various techniques used to satisfy customersneeds and to stimulate salesneeds and to stimulate sales

Coordination between various elements of the marketing mix isCoordination between various elements of the marketing mix isessentialessential

Most companies try to achieve this by requiring the heads of allMost companies try to achieve this by requiring the heads of allmarketing , including sales to report to a top marketing executivemarketing , including sales to report to a top marketing executive

Special organizational structure such as product management areSpecial organizational structure such as product management are

also used to coordinate sales with other marketing functionsalso used to coordinate sales with other marketing functions


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Relation with other marketing functionRelation with other marketing function

AdvertisingAdvertising

Relation between sales and advertising are of special concernRelation between sales and advertising are of special concern

Both form of promotion have the same purpose to inform the publicBoth form of promotion have the same purpose to inform the publicand persuade people to buyand persuade people to buy

Sales manager must aware of the advertising departments plansSales manager must aware of the advertising departments plansand activity, so that sales activity can be complementedand activity, so that sales activity can be complemented

Advertising A good source of sales leadAdvertising A good source of sales lead

Salespeople can provide feedback on advertisingSalespeople can provide feedback on advertising

Advertising department can assist salespeople by developing salesAdvertising department can assist salespeople by developing salesaid.aid.


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Relation with Non marketing DepartmentsRelation with Non marketing Departments

Research and DevelopmentResearch and Development

Most companies have R&D departmentMost companies have R&D department

May be a separate staff department or responsibility may beMay be a separate staff department or responsibility may beassigned to production or marketingassigned to production or marketing

Primary responsibility or function is to perform basic research andPrimary responsibility or function is to perform basic research andengineering activity needed to develop new products and improveengineering activity needed to develop new products and improveexistingexisting

Sales department can assist R&D efforts in two primary waysSales department can assist R&D efforts in two primary ways1. Salespeople are excellent sources of new product and product1. Salespeople are excellent sources of new product and productmodificationmodification

2.Salespeople have valuable insight into whether or not a new2.Salespeople have valuable insight into whether or not a newproduct will meet customer needproduct will meet customer need


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Relation with Non marketing DepartmentsRelation with Non marketing Departments

Research and DevelopmentResearch and Development

Relationship is crucial in high-tech firmsRelationship is crucial in high-tech firms

Field sales managers find themselves dealing with many tasksField sales managers find themselves dealing with many tasks Issues, as how headquarter staff should interact with field salesIssues, as how headquarter staff should interact with field sales

management, final customers and whether sales people should bemanagement, final customers and whether sales people should betrained on each product technology?trained on each product technology?

To solve these problems, high-tech companies have developedTo solve these problems, high-tech companies have developed

account control concept authority and responsibility for handlingaccount control concept authority and responsibility for handlingeach account rests with field sales managementeach account rests with field sales management

Product specialist accompany salespeople when specific productProduct specialist accompany salespeople when specific productknowledge is neededknowledge is needed


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Relation with productionRelation with production

Function is to prepare the product for saleFunction is to prepare the product for sale

Production departments concerns are minimizing cost throughProduction departments concerns are minimizing cost throughstandardization, long & continuous production run, long productionstandardization, long & continuous production run, long production

lead timelead time Sales executive want many types of products, frequent productSales executive want many types of products, frequent product

changes, customers special order & short production lead timechanges, customers special order & short production lead time

Best way isBest way is JOINT PLANNING


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Relations with HRRelations with HR

Responsible for the people, or human resourcesResponsible for the people, or human resources

The unique aspects of managing people who sell often lead toThe unique aspects of managing people who sell often lead toconflict s between sales and human resource managerconflict s between sales and human resource manager

HR do not understand the problems involved in managing peopleHR do not understand the problems involved in managing peoplewho are located away from the home office.who are located away from the home office.

Sales managers/departments themselves handle the more complexSales managers/departments themselves handle the more complextasks of selecting , training, developing & evaluating their owntasks of selecting , training, developing & evaluating their ownpersonnel.personnel.

However, sales manager often need to consult HR for guidance forHowever, sales manager often need to consult HR for guidance forrapidly changing issues, health and safety. A sales manager wouldrapidly changing issues, health and safety. A sales manager wouldbe unwise not to take advice from expertbe unwise not to take advice from expert


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Relation with Finance Three major areasRelation with Finance Three major areas

Budgeting

- Sales department provides short and long range sales estimates as- Sales department provides short and long range sales estimates asthe basis of financial planning & budgetingthe basis of financial planning & budgeting

Cost control

- Accounting specialist can assist sales managers in their efforts to- Accounting specialist can assist sales managers in their efforts tocontrol costs, by providing data for selling cost analysiscontrol costs, by providing data for selling cost analysis

Credit

- Credit plans are major concerns for sales as well as finance. Sales- Credit plans are major concerns for sales as well as finance. Salesexecutive should have input into establishing credit policies. Salesexecutive should have input into establishing credit policies. Salespeople can also provide current credit status informationpeople can also provide current credit status information


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Major Trends in Sales Organizations

Changing Trend

Traditional forms of sales organization have changed their approachTraditional forms of sales organization have changed their approach

In search of new and better ways to serve their marketsIn search of new and better ways to serve their markets

For Consumer goods & service companies, the new approachesFor Consumer goods & service companies, the new approaches

involve product manager form of organizationinvolve product manager form of organization

Industrial manufacturer are looking closely at strategies that will helpIndustrial manufacturer are looking closely at strategies that will helpthem adapt to change buying behavior and develop more specializedthem adapt to change buying behavior and develop more specializedsales forcesales force

For many companies, the major challenge is change from aFor many companies, the major challenge is change from a

Product To Customer Driven OrientationProduct To Customer Driven Orientation


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Telemarketing - Use of telecommunication technology in personalUse of telecommunication technology in personalsellingselling

Direct Marketing

An emerging form of promotion and distribution that combinesAn emerging form of promotion and distribution that combineselement of advertising and personal sellingelement of advertising and personal selling

Approach that bypasses intermediaries to deliver goods and servicesApproach that bypasses intermediaries to deliver goods and servicesdirectly from seller to buyerdirectly from seller to buyer

Greatest strength of direct marketing is its ability to deliver individualGreatest strength of direct marketing is its ability to deliver individualselling message to specific prospects or customers with affordableselling message to specific prospects or customers with affordablecost.cost.

Development/maintenance of customer data base is the keyDevelopment/maintenance of customer data base is the key


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Telemarketing Job Types

1. Account manager -1. Account manager - Accounts responsibility, Post sales service,Accounts responsibility, Post sales service,Order taking, Problem solvingOrder taking, Problem solving

2. Prospector -2. Prospector - ProspectingProspecting

3. Backup -3. Backup - Field sales supportField sales support

4. Customer relation specialist -4. Customer relation specialist - information transfer, complaints,information transfer, complaints,conducting research, promotion inquiries, customer serviceconducting research, promotion inquiries, customer service

Inbound Telemarketing- Potential customer contacts the selling companyPotential customer contacts the selling company

Outbound Telemarketing- Selling companies contact the prospect and cus- Selling companies contact the prospect and customerstomers


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National Account Management

A special sales force is dedicated to obtaining & maintaining majorA special sales force is dedicated to obtaining & maintaining majoraccounts ( 50 to 70% sales)accounts ( 50 to 70% sales)

A customer that involves several people in the buying process beforeA customer that involves several people in the buying process before

a sales takes placea sales takes place A customer that purchases in significant volume, both in dollar andA customer that purchases in significant volume, both in dollar and

as a %age of suppliers total salesas a %age of suppliers total sales

A customer that desires a long term cooperative working relationshipA customer that desires a long term cooperative working relationshipwith company or supplierwith company or supplier

A customer that expects specialized attention and servicesA customer that expects specialized attention and services


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THANKSTHANKS

Documents

Slides Organizing the Salesforce