Customer

Customer Offering Step 1

Segmentation
Sales Strategy
Sales Process

Step 2
Go To Market
Sales and Marketing Channels Strategy

Sales Force Structure Sales Force Size

Step 3
Sales Force
Design
Assignment of Responsibilities
Designing the Sales Force
 Sales Force Structure
 Sales Force Size
 Sales Force Deployment
Organisation Design Concepts
 Line Staff Relationships
 Span of Control
 Organisational Levels-Flat vs Tall
Basic types of Sales Organisation
Structures
 Line Organisation
 Line and Staff Organisation
 Functional Organisation
 Committee Organisation
Line Organisation

Sales Manager

Assistant Sales Assistant Sales Assistant Sales

Manager- Manager- Manager-
Territory 1 Territory 2 Territory 3

Sales Sales Sales

Personnel Personnel Personnel
Line Staff Organisation

Sales Manager

Training
Manager
Assistant Sales Assistant Sales
Manager- Manager-
Territory 1 Territory 2
Sales
Promotion
Manager
Sales Sales
Personnel Personnel
Distributive
Relations
Manager
Functional Organisation

Mktg.Research
HR Manager Sales Manager
Manager

Assistant Sales Assistant Sales Assistant Sales

Manager- Manager- Manager-
Territory 1 Territory 2 Territory 3

Sales Sales Sales

Personnel Personnel Personnel
Simple Matrix Organisation
Sales Manager

Product
Manager –
Group 1

Territory
Product
Manager
Manager –
Group 2

Product
Manager –
Group 3
Complex Matrix Organisation
Manager
Manager
Dealer Sales
Institutional Sales

Industrial Products
Group

Institutional Sales
Office Automation Group
Group

Media Products Group

Dealer Sales Group

Air Conditioning
Group

Consumer Product
Group

Consumer Electronics
Group
Schemes for dividing line
authority
 Geographic Grouping
 Product Grouping
 Industry Grouping
 Channel Grouping
Geographic Grouping
General
Manager
(Sales)

Sales Manager Sales Manager Sales Manager

(West) (South) (North)

Sales Sales Sales

Personnel Personnel Personnel
Product Grouping
General
Manager
(Sales)

Sales Manager Sales Manager Sales Manager

(Office (Air (Consumer
Automation) Conditioning) Electronics)

Sales Sales Sales

Personnel Personnel Personnel
Industry Grouping
General
Manager
(Sales)

Sales Manager Sales Manager Sales Manager

(Engineering (Chemical (Service
Industry) Industry) Industry)

Sales Sales Sales

Personnel Personnel Personnel
Channel Grouping
General
Manager
(Sales)

Sales Manager Sales Manager Sales Manager

(Direct Sales) (Retail Sales) (Online Sales)

Sales Sales Sales

Personnel Personnel Personnel
Activity Grouping
General
Manager
(Sales)

Sales Manager
Sales Manager Sales Manager
(Lead
(Pre-Sales) (Sales)
Generation)

Sales Sales Sales

Personnel Personnel Personnel
Why set up a Sales Organisation
 Permit Development of Specialists
 Assure that all necessary activities are
performed
 Achieve Coordination and Balance
 Define Authority
Setting up a Sales Organisation
 Defining Objectives
 Determination of activities and their
volume of performance
Objectives
 Sales Revenues
 Profitability
 Lead Generation
 Pre Approach
 New Customers
 New Product Launch
 On Going Support
 Customer Satisfaction
 Learning and Innovation
Activities
 Response to RFP
 Estimation and Pricing
 Field Sales Calls
 Tele Sales Calls
 Help Desk Function
 Pre Sales Support
 Post Sales Support
Setting up a Sales Organisation
 Grouping activities into positions
 Assignment of personnel to positions
 Provision for co-ordination and control
Sales Force Structure
 How to Divide up Sales Activities among
different types of Sales People
 How to Co-Ordinate and Control
Activities to meet the firm’s Goals
Sales Force Structure
Roles and Specialisation
 Type of Customer Each Sales Person
will Call On
 Should one Salesperson Call on All
Types of Customers
 Should Different Salespersons Call on
Different Types of Customers?
Sales Force Structure
Roles and Specialisation
 Product and Service Portfolio Each
Salesperson will Sell
 Should One Salesperson Sell All
Products?
 Should Different Salespersons Sell
Different Products?
Sales Force Structure
Roles and Specialisation
 Activities Each Salesperson will Perform
 Should one Salesperson Perform All
Activities Needed To Execute the Sale
 Should Different Salespersons Be
Involved at Different Stages of the Sale
Sales Force Structure
Co-Ordination and Control
 How Different Sales Roles will Interface
 Should There Be A Sequential Handing
Over?

Lead Post
Qualification Sales
Generation Sales
Sales Force Structure
Co-Ordination and Control
 Should Sales Teams/ Task Forces Be
Formed?
 Formal Organisation or Loose Organic
Structure

Lead Post
Qualification Sales
Generation Sales
Sales Manager’s Role
 Strategic
 Operational
 Tactical
Reporting Relationships
 Direct/ Indirect Reporting Relationships
 Simple and Matrix Structures
 Span of Control
 Managers manage Multiple or Single
type of Sales People
Importance of Sales Force
Structure
Customer Perspective
 How many Sales People the Customer
Meets
 How Knowledgeable they are about their
products
 How Capable are they to offer solutions
to customer needs
Importance of Sales Force
Structure
Company Perspective
 How Effectively Sales Force Generates
Revenues
 How Efficiently Sales Force Manages
Costs
 How Adaptable it is to Evolving
Situations
 Whether it is Flexible to Change Quickly
Influence on Other Decisions
 Sales Job Descriptions
 Hiring Profile of Sales Management
Positions
 Sales Person Training Needs
 Performance Evaluation Systems
 Career Paths
 Compensation Plans
Drivers of Sales Force
Specialisation
Product Line Complexity
 Narrow Uncomplicated Product Line
 Identical Market Segments
 Sales People can be Generalists
 Line Authority can be Divided
Geographically
Drivers of Sales Force
Specialisation
Product Line Complexity
 Diverse Complex Product Line
 Specalisation by Product
Drivers of Sales Force
Specialisation
 Customer Centric Specialisation
 Large, Medium, Small
 Transactional, Consultative, Enterprise
 End User, Value Added Reseller, Distributor,
Retailer
 Product is Mission Critical, Anciliary
 Specialisation by Customer
Drivers of Sales Force
Specialisation
 Industry Centric Specialisation
 Product Specifications vary by Industry
 Product Usage varies by Industry
 Criticality of Product varies by Industry
 Complexity of application varies by Industry
 Industry Specialisation
Drivers of Sales Force
Specialisation
Activity Diversity
 Activity Centric Specialisation
 Lead Generation
 Lead Qualification
 Networking
 Tele Selling
 Web Selling
 Personal Selling
 Support/ Solution Development
 Post Sales
 Routine Administration
Drivers of Sales Force
Specialisation
Salesperson Bandwidth
 Skills
 Knowledge
 Capacity to Perform
 Available Time
Drivers of Sales Force
Specialisation
Company Orientation
 Strategy
 Culture
 Flexibility
 Goals and Aspirations
 Resources
Drivers of Sales Force
Specialisation
Narrow Product Range

Homogeneous
Customers

Simple Processes

Within Sales Person

Bandwidth

Generalist Sales
Force
Drivers of Sales Force
Specialisation
Wide Product Range

Diverse Customers

Complex Processes

Exceeds Sales Person

Bandwidth

Specialist Sales
Force
Hybrid Structures
 Generalists
 Support Staff
 Specialists

Product Specialist

Support Staff
for Routine Generalist Sales Force Industry Specialist
Work

Activity Specialist
Specialisation Options

Several Products of High Complexity

Product Specialisation

Can be used in variety of Industries

Specialisation Options

Several Products that collectively offer

Solutions in different ways to different Industry Specialisation
Industries
Specialisation Options

A Few Simple Products that have similar

applications in several industries but buying Buying Process Based
processes are widely different across Specialisation
customers
Bandwidth
Amount of Information that can be Carried
through a Communication Channel such
as Phone Line, Cable, Fibre or Satellite
Connection
Sales Person Bandwidth
How much a Salesperson can Understand
and How many Activities a Salesperson
can Effectively Perform
When a Salesperson’s Bandwidth is
Exceeded
He Drops Products/ Activities/ Customers
which are difficult to handle
Leading to Underperformance
Recognising Bandwidth Problems
 Customers Complain that Salespeople
do not understand their business
 Customers demand Knowledgeable
Sales People
 Sales People Complain they are
Overloaded, Lack Critical Knowledge
and Support
 Sales People give priority to Simpler
Products, Easier To Handle Customers,
Less Complex Activities
Resolving Bandwidth Problems
 Break up Tasks
 Assign people with right Aptitude and
Capabilities to each Task
 Offer Training, Exposure
 Divide and Conquer
Specialisation comes at the cost of Efficiency
Tradeoff Between Effectiveness
and Efficiency
Generalist Sales Specialist Sales Specialist Sales
Force of 100 Sales Force of 30 Sales Force of 70 Sales
People for Product People for Product People for Product
Groups A & B Group A Group B

Sales Territory
Sales Territory
Size
Size
Sales Territory
Size
Matching Strategy to Structure
Strategy and Objectives
Make it Easy for Customers to
Do Business with You
Cross Sell across Product
Lines
Provide Bundled Offerings
Structure
Single Point of Contact
Single Salesperson per
Account
Expertise in Customer End
Applications
Matching Strategy to Structure

Strategy and Objectives Structure

Offer Customer Centric

Solutions as part of Value
Addition

Offer Superior Value-added Industry Specialist

Services Customer Specialist

Drive Revenue Growth

Matching Strategy to Structure

Strategy and Objectives Structure

Offer Product Centric Solutions

Product Specialist
as part of Value Addition
Matching Strategy to Structure

Strategy and Objectives Structure

Highest Operational Efficiency

Organise Sales Force
Geographically

Develop Well Rounded

Lowest Operating Costs Generalists

Assign Low Cost Support

Teams to perform
supplementary functions
Best Coverage
Matching Strategy to Structure

Strategy and Objectives Structure

Launch New Product

Aggressively
Establish ‘Hunter Sales Force’ for
New Business Development
Protect Coverage of Existing
Products Create Launch Team with fresh
recruitment

Maintain Strength in Existing

Achieve Growth through
Sales Teams
New Product Introductions
Matching Strategy to Structure

Strategy and Objectives Structure

Protect Business with Existing

Key Customers
Establish Key Account Teams
Grow Business With Existing
Key Customers Assign Product and Industry
Specialist people to Key
Account Sales Teams
Be Responsive to Rapidly
Evolving Key Customer Needs
Specialisation at Microsoft (2002)
Objective: Higher Revenues
Strategy: Introduction of New Verticals
 Retail
 Healthcare
 Automotive
 High Tech Manufacturing
 Oil and Gas
 Media and Entertainment
 Professional Service
Specialisation at Microsoft (2002)
Objective: Higher Revenues
Strategy: Introduction of New Verticals
 Financial Services
 Telecommunications
 State and Local Governments
 Federal Government
 Education
Specialisation at IBM (2004)
Objective: Higher Revenues
Strategy: 12 Industry Verticals including
 Financial Services
 Retail
 Manufacturing
Reorganisation at SAP and AOL
Objective: Lower Costs
 Industry Specialisation discontinued
 Geographical Territories Created
 More Efficient Coverage
 Generalist Sales Force
Reorganisation at HP
Objective: Operational Efficiency
 Salespeople spent 30-50 % of time on
Configuring and Quoting
 Configuration Support Specialists Created
 Specialist Team developed configuration,
estimated costs, prepared proposals based
on Sales Person advise
 Improved Customer Facing Time for Sales
People
Resource Allocation through
Sales Force Specialisation
 Assigning Resources to a Product,
Customer or Activity ensures Allocation
of Selling Effort
Resource Allocation through
Sales Force Specialisation
Other Ways of Ensuring Selling Focus
 Management Directives
 Training
 Incentives
 Compensation Plans
Sales Force Structure at P&G
 P&G has created Dedicated Teams for Key
Customers
 A 300 Strong Sales Force Serves Walmart
at Bentonville, Arkansas
 Team Comprises of people from
 Sales
 Marketing
 Distribution
 Supply Chain Management
 IT
 Finance
Customer Specialisation
Advantages
 Expertise in Industry Matters
 Knowledge of Industry Best Practices
 Experience of Product Utilisation and
Application
 Knowledge of Product Track Record
within Industry
 Ease of Understanding Customer Needs
 Credibility of Customer Testimonials
Customer Specialisation
Disadvantages
 Industry Segment Declines
 Customer Downsizes
 Customer Switches to Competitor
 Reduced Focus on the Brand and
Product
 Reduced focus on New Market
Development
Product Specialisation
Advantages
 Product Market can be Strengthened
 Brand is Strengthened
 Expertise in the Product useful for
Complex Products
 Better Co-ordination with Product
Centric Functions like Production,
Service, R&D and Marketing
Product Specialisation
Disadvantages
 Customers visited by Multiple Sales
Persons
 Synergy across Products not Utilised
 Efficiency Suffers
 Duplication of Effort
 Lack of Customer Focus
 May cause Customer Confusion
 If the Product is Withdrawn, Sales Force
becomes Redundant
Activity Specialisation
Advantages
 Sharper Focus on Critical Activities
 Specialisation improves Effectiveness
as well as Efficiency
Activity Specialisation
Disadvantages
 Interface Areas may Suffer
 Handing Over Issues need to be
Resolved
 Lower Calliber of ‘Support Staff’ could
impact overall Results
 Specialised Processes may be Sub
Optimally executed
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Customer Complaint that Sales Persons

Product Specialist
do not have enough Product Knowledge
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Sales People Do not Understand Finer

Technical Specialist
Technical Points of the Product
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Sales People Do not Understand the

Application Engineers
Use of the Product at the Customer End
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Industry Knowledge is Needed to Sell

Market Specialist
Effectively
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Large Accounts Require Special

Key Account Managers
Attention
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Small Accounts getting too much Less Experienced Generalists

attention Tele Sales People
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Too many Mid Size Accounts Mid Size Specialist Group

Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Service Consultant
Poor Customer Retention
Retention Specialist
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Customers are Switching to Competitors Win Back Specialist

Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

New Customer Acquisition

Too Few New Customers
Specialist
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Not Enough Qualified Leads Lead Generation Team

Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Sales People spend Too Much Time

Sales Assistants
Doing Administrative Work
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

Sales People spend too much time Interactive Web Site,

providing routine information Customer Helpline
Effectiveness Enhancement
Roles
Sales Force Symptom New Sales Role Needed

New Product Launch requires Intensive Launch Strike Force drawn

Sales Effort for a Short Duration from Existing Functions
Effectiveness AND Efficiency
 Specialist Sales Person Could Cost
Less, Yet
 Specialised Roles Could lead to Greater
Effectiveness
Sales Roles that Increase Efficiency
 Generalist Sales People
 Sales Assistants
 Customer Service People
 Telesales
 Part Time Sales People
 Independent Sales People
Sales Roles Increase Efficiency
 Telemarketer Contacts 25-30 Customers a
Day
 Field Sales Person makes 5-6 Calls a Day
 Telesales Personnel cost less than Field
Sales People and travel costs are not
involved
Telesales Roles
Pre Sales Sales Post Sales

Providing Non
Prospecting Making Sales Technical Support Post
Sales

Maintaining / Nurturing
Providing Technical
Generating Leads Relationships during
Support Post Sales
the Sales Process

Maintaining
Qualifying Leads Getting Repeat Orders Relationships Post
Sales
Part Time Sales People
 Students
 People Caring for their Families
 Employed People Looking for a Second
Source of Income
 Retired People
Part Time Staff- Downsides
 Unavailable when needed
 Turnover
 Increase Span of Control
 Need Same Facilities as Regular Staff
 Complexity in Service Conditions
 Less Committed
 No Long Term Stake in the Company
Independent Sales People
 Free Lancers
 Manufacturer’s Representatives
 Independent Selling Organisations
 Contract Sales Force
 Distributors
 Agent Organisations
 Brokerage Firms
Independent Sales People
Advantages
 Contacts with Customers
 Familiarity with Geography/ Local
Customers
 Complementary Portfolio of Products
 Travel Time/ Costs apportioned over
several products
 Quick Way to achieve Geographic
Spread
Independent Sales People
Disadvantages
 Loss of Control over Quality of Sales People
 Loss of Control over Quality of Effort
 Loss of Control over Prioritisation
 Loss of Control over Customer Relationship
 Risk of ISO introducing a Competitor
 Risk of ISO becoming a Competitor
 ISO may have low stake in the Customer
Relationship