organizing the modern sales force

8/2/2019 Organizing the Modern Sales Force

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Organizing the ModernSales Force

Sales & Distribution

Management

Marketing 3345


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Importance of Sales OrganizationDecisions

Organizing the activities and management of thesales 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 theorganization is structured and how it interactswith its customers


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Purposes of Sales Organization

Activities should be divided and arranged insuch a way the firm can benefit from thespecialization of labor.

The organizational structures should provide forstability and continuity in the firms selling efforts.

The structure should provide for the coordinationof activities assigned to different persons in thesales force and different departments in the firm.


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Division and Specialization ofLabor

Increase productivity - each specialist canconcentrate efforts and become more proficientat the assigned task

Divide required selling activities to gainmaximum benefits of specialization within thesales force

Line organization - vertical organization, chain ofcommand runs from the chief sales executivedown through levels of subordinates


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Manufacturer

Re-employs

Rep firm to

lower fixed

sales costs

Re-engagement

Decision

Disengagement

Decision

Introduction

Decline

Selling Agent Decision and

Product Life Cycle


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Outsourcing the Sales Force

Manufacturers Representatives

intermediaries who sell part of the output oftheir principals.

Take neither ownership nor physicalpossession of the goods they sell.

Cover a specific territory and specialize in a

limited range of complementary products.


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Selling Agents

Intermediaries who do not take title orpossession of the goods they sell

Compensated by commissions from theirprincipals

Have broad authority by their principals to

modify prices and terms of sale Actively shape the manufacturers

promotional and sales programs

Outsourcing the Sales Force


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Considerations for Outsourcing:Break-even


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Common Bases for Structuring theSales Effort

Geographic organization

Product organizationOrganization by customer type or markets

Organization by selling function


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Geographic Organization


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Product Organization


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Organizing by Customer Type orMarkets


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Role of Telemarketing

Prospecting for and qualifying potential newaccounts

Servicing existing accounts quickly when

unexpected problems arise Seeking repeat purchases from existing

accounts that cannot be covered efficiently inperson

Gaining quicker communication of newsworthydevelopments


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Field Rep Telemarketing

Sales calls per day 5 25

Sales calls per quarter 325 1624

Sales calls per year 1300 6500

Salespeople required 6.5 1.2

Cost per sales call $250 $15

Cost per year $1,998,750 $117,000

Doing the Math on Account Management


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Face-to-

Face

Selling(FTF)

FTF FTF

FTF

FTF FTF

FTF FTF

TM

Large

Medium

Small

Account

Size

Prospect/ Present/ Service/

Qualify Close Reorder

Stage in Selling Process

EVOLUTION OF SELLING METHODS - OLD


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Large

Medium

Small

Account

Size

Prospect/ Present/ Service/

Qualify Close Reorder

Stage in Selling Process

EVOLUTION OF SELLING METHODS - NEW

National

Account

Management

(NAM)

NAM NAM

Telemar-

keting

(TM)

TM TM

FTF

FTF

&

TM

TM


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National and Key Accounts

Organizational approach to delivercustomer service necessary to attract andmaintain 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


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Team Selling

Team selling integrates functionalspecialists with customer relationshipspecialists.

Benefits include:

Questions answered faster

People with similar interests speak directly

with one another


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Alternative Organizations

Multi level sellingsales team consists ofpersonnel from various managerial levels whocall on their counterparts in the buyingorganization

Co-Marketing Alliances develop marketing andsales programs to sell integrated systems

directly to the ultimate customer


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Logistical Alliances andComputerized Ordering

From the customer point of view,computerized ordering is

Convenient,

Flexible and

Less time consuming

How will computerized reorder systemschange the role of the sales force?


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Vertical Structure of SalesOrganizations

Key questions:

How many levels of sales managers shouldthere be?

How many people should each managersupervise? (span of control)


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Building Blocks for New SalesForce 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 newsales force should employ best practices

organizing the modern sales force

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