5 organizing and staffing the salesforce

7/25/2019 5 Organizing and Staffing the Salesforce

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Organizing andStafng the

SalesorceDr Mallika Srivastava


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A sales organisation assists the salesmanager to carry out needed tasksefciently and eectively to achieveresults

The basic concepts o the salesorganisation are: Degree o centralisation Degree o specialisation Line or stapositions

Market orientation ective co!ordination Span o control

Concepts o SalesOrganisation


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"roduct and services!related actors #rgani$ation!related %actors Marketing Mi&!related actors

&ternal %actors

Factors InuencingStructure


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Sales organisations are generally classi'edinto our basic types:

Line #rganisation

Line and sta organisation

%unctional organisation

(ori$ontal organisation

Basic Types o SalesOrganisations


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LineOrganisation

)haracteristics: All managers have line authority to direct andcontrol subordinates* +sed in small 'rms , departments

Advantages:Simple organisation- clear authority- .uick decisions-lo/ cost

Disadvantages: 0o support to line managers rom subordinates/ho have specialised kno/ledge , skills* Less time or planning ,analysis

HeadMarketingSalesManager

Area SalesManager1

Area SalesManager3

Area SalesManager2

Area SalesManager4

salespeoplesalespe

oples

alespeoples

alespeople


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Line and StaOrganisation

)haracteristics: Specialist sta managers are available or senior

marketing , sales managers* Sta managers1 role is to assist , advise

line managers* +sed in medium and large si$e organisations

Advantages:2etter marketing decisions- superior sales perormance

Disadvantages: (igh cost and coordination- slo/er decision making-

con3ict may arise i sta managers1 role is not clear

H

ead-Marketing

Marketing ResearchManager

S

ales Manager

PromotionalManager

C

ustomer ServiceManager

Area SalesManager-1

Area SalesManager-1

Area SalesManager-1

Salespeople Salespeople Salespeople


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FunctionalOrganisation

)haracteristics:ach unctional specialist has line responsibility over

salespeople* +sed by a large 'rm /ith many products , market

segments- minimising line authority to unctional managers

Advantages: 4uali'ed specialists guide salesorce- simple to

administer

Disadvantage: conusion due to more managers giving orders to

salesorce

Head-Marketing


PromotionalManager

Customer ServiceManager

Sales Manager

Area Sales Manager 4

Salespeople


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)haracteristics:5emoves management levels 6 departmentalboundaries* &cept planning team- all others are members ocross!unctional teams* +sed by 'rms having partneringrelationships /ith customers*

Advantages: 5eduction in supervision- unnecessary tasks- 6cost7 8mproved efciency and customer responses*

HorizontalOrganisation

esearch ! "esignTea#$Custo#er esearch%roduct & Ser'ice"esign

%lanning Tea#$Strategic %lanning(ccounts) FinanceH) (d#inistrationChie OperationOfcer

Operations Tea#$%roduction &Operations*uality (ssuranceSyste#s

+ngineering

Custo#er SupportTea#$Inor#ationSer'iceTraining

Custo#erSatisaction Tea#$Sales ! ,ar-eting%ricing) %ro#otionChannels) Logistics


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0eeded to increase eectiveness o

salesorce Done by e&panding basic sales

organisation

2asis o specialisation 9eography

Type o product

Market

)ombination o above )riteria or selection ;= nature and number oproducts- ;?= abilities o sales orce- ;@=

selling costs*

Specialisation .ithin SalesOrganisation


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eograp cSpecialisation

)haracteristics:salespeople- assigned geographic areas- are responsible

or all selling activities to all customers /ithin assigned areas* 2ranch

sales managers adust marketing plan to local needs

Advantages:2etter market coverage and customer service- more controlover salesorce- .uick response to local conditions 6 competition

Disadvantages: Limited specialisation o marketing tasks* (ence- it is

combined /ith product , market sales organisation

Head-Marketing


!eneral SalesManager Promotion

ManagerCustomer ServiceManager

"ranch SalesManager-1




Salespeople Salespeople Salespeople Salespeople

% d


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%roductSpecialisation

+sed /hen the company has many products and , or brands

T/o types o product specialisation

;&=* Sales organisation /ith product specialised salesorce

;y=* Sales organisation /ith product managers as sta specialists

Head-Marketing


!eneralSales Manager

Sales #rainingManager

PromotionManager

Area Sales Managers $Product !roup %A&

Area Sales Managers $Product !roup %"&

Salespeople $Product !r' %A&

Salespeople $Product !r' %"&

(ig' %)& Sales *rganisation +ith product specialised sales,orce


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Fig0 1y2 Sales Organisation .ith %roduct ,anagers asSta Specialists

8n 'g* B&1: )haracteristics:Salespeople in each product group sell only theproducts in that group

Advantage:ach product gets specialised attention rom the salesorce

Disadvantage: Sometimes- more salespeople contact the same customer-

resulting in customer dissatisaction and higher cost8n 'g* By1: )haracteristics: ach product manager plans and implementsmarketing plan- or a product group

Advantage: )orrects the problem o duplication calls on a customer bysalespeople

Disadvantage:Lack o product specialisation by salespeople

Head-Marketing

Marketing Research

Manager

Promotion

Manager

Product Manager

Product !r' %"&

Product Manager

Product !r' %A&

!eneral

Sales ManagerArea SalesManagers

Salespeople

Product Specialisation Continued.

ar e


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ar eSpecialisation

)haracteristics:Desirable /hen customers are classi'ed by type-

user industry- or channel* Salespeople carry out all activities or all

products only or speci'c customer groups

Advantages:Meets needs o speci'c customer groups- implements

customer!centred philosophy o the company

Disadvantages:9eographic duplication- high cost

!eneral SalesManager

Sales Manager-/nternational-Markets

Sales Manager-Commercial

Sales Manager-Consumer Markets

Sales Manager-!overnment

Area Sales Mgrs/nternational

Sales 0)ecutives

Area Sales Manager-Commercial

Salespeople

Area Sales Manager-!overnment

Salespeople

Area Sales Mgrs-Consumer Markets

Salespeople


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Co#3ination SalesOrganisation

)haracteristics: Many 'rms use some combination o

specialisation organisations- called hybrid or combination

sales organisation- /ith a vie/ to minimise disadvantages

and ma&imise advantageso specialisation organisations

%igure above sho/s combination o geographic and market

specialisations

irector $ Sales Marketing

!eneral ManagerSales - orth

!eneral ManagerSales - 0ast

!eneral ManagerSales - South

!eneral ManagerSales - est

Regional Sales

Mgr' $ !ovt'

Regional Sales

Mgr' - ealers

Regional Sales

Mgr' - Commercial

Salespeople Salespeople Salespeople

, t , 4 & 5


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Also called house- global- or nationalaccounts , customers*

They have high sales 6 pro't potential*They may e&pect superior service- lo/

prices- strategic relationship*

(o/ to manage key accountsC#bective:Sole , preerred supplier

Strategy Appoint key account managerTeam selling and superior service Strategic collaborative relationship

)reate a special sales organisation

,anage#ent o ,a4or & 5ey(ccounts


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Agency and distribution selling Shared selling %orceTelemarketing

Total .uality Management ;T4M= and Teambased selling

+#erging Organizational"esigns


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(o/ many salespeople needed ;orsalesorce si$e= to achieve a 'rm1s salesand pro't obectives is a key decision

Methods availableto decide optimum

salesorcesi$eare as ollo/s: orkload

Sales potential ;or breakdo/n=

8ncremental

Size o theSalesorce


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Assumption:All salespeople have e.ual /orkload Steps involvedto calculate salesorce si$e are:

= Decide time per sales call and call re.uencies oreach class o customers

?= )alculate total market /orkload E ;= inhours

@= Decide total /ork time available per salesperson

F= Divide total /ork time available by dierentactivities per salesperson in hours

G= )alculate total number o salespeople needed

6or-load,ethod

)5(

)3(

nsalespersoperavailabletimesellingtotal

workloadmarkettotal=


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6or-load ,ethod 7Continued8 Advantages: simple method- conceptually sound- used

or all types o selling situations

Disadvantages:0eglects sales productivity 6 salesorceturnover

Sales %otential & Brea-do.n ,ethod The ormulaused is: - /here

0E0umber o salespeople needed- or salesorce si$e

SEAnnual sales orecast or the company in value ;5s*Million=

"Estimated productivity o the average salesperson insales ;5s* Million=

TEstimated percentage o annual salesorce turnover Advantages:Simple and straight or/ard Disadvantages: )onceptually /eak7 lead time needed

or a ne/ salesperson to reach average productivity

)1( TP

SN +=


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8t is based on marginal analysis theory oeconomics

2asic concept: 0et pro'ts /ill increase /hen

additional salespeople are added- i the incrementalsales revenues e&ceed the incremental costs Merit: )onceptually accurate- as it .uanti'es

relationships bet/een salesorce si$e- sales- costs-pro'ts

Demerit:)an not be used i historical data on salesand costs are not available

Incre#ental,ethod

Salesorce


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8t is one o the most challenging and

important responsibilities,activities o salesmanagement

Salesorce Stafng "rocess includes ollo/ing

stages:

"lanning

5ecruiting

Selecting

(iringSociali$ation

SalesorceStafng


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Determination o characteristics thatdierentiate candidates

Measuring these characteristics

valuation o the motivation level o thecandidates Aculturi$ation

Challenges in Sales Force Selection


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8t consists o three steps:

stablish responsibility or stafng process

Decide number o salespeople needed

#utline the type o salespeople needed stablish responsibility or stafng process

)ompany management decides responsibilitiesor various stages , activities o stafng process

9enerally in a medium , large si$e company-middle and senior levels (*5* and salesmanagersare responsible

"roper coordination needed bet/een sales-marketing- and (5 e&ecutives

%lanningStage

%lanning Stage 7Continued8


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Steps ollo/ed by each territory sales manager to

plan re.uirement o sales people:= Addnumber o promotions- retirements- transersout- terminations- resignations e&pected rom

e&isting salespeople

?= Subtracte&pected transers into the territory ande&isting salesorce

@= Make a total o ne/ salespersons needed

Territory sales managers submit their re.uirementsto national , general sales manager- /ho calculatesthe total number o ne/ salespersons to be hired

%lanning Stage 7Continued8"ecide the nu#3er o salespeopleneeded

Outline Type o Salespeople


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The steps involvedin the process are:

)onducting a ob analysis

"reparing a ob description

Developing ob .uali'cations , speci'cations

Conducting a 9o3 (nalysis

8t is done by a person rom sales , (* 5*department- or a consultant* 8t consists o t/otasks:

;= Determine duties and responsibilitieso thesalesperson* #btain inormation rom salesmanagers- customers- etc*

Outline Type o Salespeople:eeded

%reparing a 9o3


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8t is a /ritten documentdeveloped rom the

ob analysisThe detailed ob description is a useul tool

or recruiting- selecting- training-

compensating- and evaluating salespeople

Some o the points it generally coversare:

Hob title- reporting relationship- types o

products , services sold- types o customers-

duties and responsibilities- location andgeographic area to be covered

%reparing a 9o3"escription


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These are generally based on ob description

Hob speci'cations , .uali'cations includeeducation- sales e&perience- skills- and

personality traits

Many studies done- but no generally accepted ob

.uali'cations or selecting salespeople- due tomany types o sales obs

Some methods used or developing ob

speci'cations are as under:

Study ob description*+seul or a ne/ company

Analyse personal histories o salespersons

Ask customers

"e'eloping 9o3 *uali;cations &Speci;cations

ecruiting


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5ecruiting include activities to get individuals/ho

/ill apply or the ob

The general purpose o recruitment is to get

enough .uali'ed candidates- to enable company

select the right persons

(*5* and sales managers must update inormationon government employment regulations

5ecruiting stage , process includes ollo/ing

activities:

%inding the sources o sales recruits valuating and selecting recruiting sources

)ontacting candidates through the selected

source

ecruitingSalesorce

Fi di th S S l


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Finding the Sources o Salesecruits

%or identiying prospective candidates- 'rms use

internal and e&ternal sources* They include:

Internal Sources External Sources

Employee referral

programmesCurrent employees

Promotions and transfers

Advertisements in

newspapers and journals /magazines

The Internet (job sites

Edu!ational institutions

Employment agen!ies

"ob fairs

#ther !ompanies

+'aluating and selecting ecruiting


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5ecruiting sources are evaluated based on thedatabasebuilt over number o years

valuating actorsare:

"erormance rating o salespeople- ater > years/orking

"ercentage o salespeople retained- ater >

years /orkingTotal cost o recruiting

Selectingmost eective source o recruiting atleast cost

%or a ne/ company- selection depends on cost )ontacting candidates through the selected

source is done by (* 5* department

+'aluating and selecting ecruitingSources

Selecting


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Selection process consists o seven maor

selection steps , tools )ompanies dier in using selection tools-

depending on e&penditure budget and timeavailable

Maor selection tools , stepsare: Screening resumes

Application blank

8nitial intervie/

8ntensive intervie/Testing

5eerence check

"hysical e&amination

SelectingSalesorce


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Screening esu#es 8t is done /hen the company receives many resumes

This step , tool not re.uired- i somebody else likeemployment agency does initial screening 8nitial screening o resumes are done by comparing

/ith ob speci'cations

(pplication Blan- idely used- it is a methodical /ay o collecting

relevant inormation rom the applicant Advantages o using application blank ;also called

Iormal application ormJ= are:

;= +seul or asking .uestion during intervie/sessions

Inter'ie


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idely usedselection tool A good predictoro the candidate1s perormance 8nitial intervie/s are used or screening

candidates 8ntensive intervie/sare conducted to get indepth

vie/ o candidates 8ntervie/ structure , type o intervie/s: Structured , patterned , guided intervie/s

+nstructured , non!directed , inormalintervie/s

Semi!structured intervie/s2ehaviour and perormance based intervie/s

Stress intervie/s "urpose is to decide a candidate1s 'tness or a

ob

Inter'ie.s

Testin


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Many 'rms use tests as a selection tool 9"69- 82M "urpose o testing: To 'nd /hether applicants have

traits , characteristics that lead to success in sales ob Type o selection tests:

Aptitude tests measure ability or selling andlearning

8ntelligence tests 'nd out mental intelligence orintelligence .uotient ;84=

8nterest tests 'nd out level o interest in a salescareer

Kno/ledge tests measure kno/ledge o products-

markets- etc "ersonality tests 'nd out attitude or traits like

empathy- sel!con'dence Tests must have reliability and validity

Tests should be one o the selection toolsand not theonly tool

Testing


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eerence Chec-s They are importantdue to possibilities o resume rauds

and alse personal inormation

They are done by letters , e!mails- telephones- orpersonal visits

8nstead o candidate1s reerences- previous employers ,customersto be included or reerence checks

%hysical +


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Hiring Stage Ater completing selection process- a list o candidates

to be hired is made 8n hiring stage- t/o activitiesare perormed:

;= "ersuading the applicant to accept it

Socialisation Stage

8t is the process through /hich ne/ salespeople learnvalues- norms- attitudes- and behaviour o people/orking in the 'rm

Socialisation processstarts beore the ne/ salespersonaccepts the ob oer and continues until the person is

assimilated into the company culture Assimilationis the second stage o socialisation process )ompanies have this process- in order to retain ne/

salespeople

5 organizing and staffing the salesforce

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