Part III

SALES FORCE ACTIVITIES

Chapter 6:

Sales Force
Organization
Sales Force Organization: Impact

Structure

Compensation
Sales
Management Performance
Role Evaluation
Recruiting/ Training
Selection Program

Figure 6-1: Decisions Affected by Sales Force Organization

 Sales Force Organization: Topics

Strategic
Sales Force
Account Telemarketing Independent Emerging
Specialization
Management Agents Issues
Strategic Account Programs:
Survey Results

49% Today
45% In Five Years

24%
20%
18% 17% 16%
11%

Customer Generalist Product Functional

Lines

Figure 6-2: How Sales Forces are Organized

Sales Force Organization: Generalist
National Sales
Manager

Central Regional Eastern Regional Western Regional

Sales Manager Sales Manager Sales Manager

Northeast District Mid-Atlantic District Southern District

Sales Manager Sales Manager Sales Manager

Connecticut New Jersey Pennsy- North South

Rhode Island Maine
lvania Carolina Carolina

District of
Vermont New York Delaware Georgia Alabama
Columbia

Massachus
New York Virginia Maryland Mississippi Florida
etts

Figure 6-3: Geographical Sales Organization

Sales Force Organization:
Product Specialists
National Sales
Manager

Eastern Regional
Sales Manager

Northeast District Mid-Atlantic District Southern District

Sales Manager Sales Manager Sales Manager

Printer Server Minicomputer Programmable Copier Large

Equipment Salesperson Salesperson Calculator Salesperson Computer
Salesperson Salesperson Salesperson

Figure 6-4: Product Specialized Sales Force

Product Specialist Organization:
Analysis
 Advantages
 Allows focusing of sales effort
 Expertise developed in limited
number of products

 Disadvantages
 More expensive to operate
 May result in duplication of sales calls to clients
Sales Force Organization:
Customer Specialists
National Sales
Manager

National Accounts Eastern Regional Manager of

Manager Sales Manager Export Sales

Northeast District Mid-Atlantic District Southern District

Sales Manager Sales Manager Sales Manager

Salesperson Salesperson for Salesperson for Salesperson for

For Educational Retail Customers Government Bank Customers
Institutions Agencies

Salesperson for Salesperson for

Manufacturers Wholesale
Customers

Figure 6-5: Customer Specialized Sales Force

Customer Specialist Organization:
Analysis
 Advantages
 Consistent with market driven strategy
 Salespeople become customer experts
 Customer segments receive appropriate
resources

 Disadvantages
 May conflict with marketing organization
 Product expertise may be lacking
 More expensive
Sales Force Organization:
Functional Specialists

Division
Marketing Manager

Industry Systems Administrative

Sales Manager Manager Manager

Market
Account Executives System Reps Administrative
(Salespeople) (Technical Support)
(Training & Installation)

Figure 6-6: Functional Specialization

Organizational
Advantages Disadvantages
Structure

Generalist •Low cost •Limited product line knowledge

•No geographic overlap •Limited customer knowledge
(Geographic) •No customer overlap •Lack of management control over
product or customer emphasis

Product •Product knowledge •Low geographic efficiency

•Control over product emphasis •Customer duplication
•Geographic duplication

Customer •Deeper customer knowledge •High cost

•Control over customer emphasis •Less product knowledge
•More geographic duplication
•Difficult coordination with product
managers

Functional •Effectiveness in performing •Coordination

selling activities •Geographic duplication
•Customer duplication

Figure 6-7: Comparing Sales Organization Structures

Strategic Accounts:
What is Different about Strategic Accounts?

Previous New Strategic

Approach Account
Bsiness Plan 3 – 6 2 – 3 years
Duration months

Structure of Tactical Strategic business

Business Plan promotional plan focused on
program growth and
profitability
Personnel Sales reps and Senior management
Involvement purchasing agents from both companies

Figure 6-8 : Changes in Joint Account Planning

Strategic Accounts:
Alternative Organization Models
 Existing Sales Force
 Low risk; little change
 Management Sell National Accounts
 Keeps management close to customer
 Separate Sales Force
 More aggressive; more expensive; alternative to
sales management for promotion for sales staff
 Sales Teams
 Use when selling process is complex
 Field Rep Telemarketing
Sales calls per day 5 25
Sales calls per quarter 325 1,624
Sales calls per year 1,300 6,500
Salespeople required 6.5 1.2
Cost per sales call $250 $15
Cost per year $1,998,750 $117,000

Table 6-1: Doing the Math on Account Management

Sales Force Organization:
Scope of Telemarketing
Activity Description
Customer Service Companies provide customers provide
customers with a number they can call if
they have questions.

Prospecting and Firms are taking a proactive approach to

prospecting by having telemarketers call
Lead Qualification prospects or qualify them for face-to-face
selling.

Account Selling secondary product lines or service

small customers by phone, thereby freeing
Management their salespeople to concentrate on larger
customers and strategic product lines.

Promotion Support that

Develop newspaper and magazine ads
feature either a local or an 800
number to get additional product
information or place an order.

Figure 6-9: The Scope of Telemarketing Activities

Sales Force Organization:
Telemarketing Advantages and Challenges

Advantages
 Low cost per sales call
 Profitably serve small to medium customers
 Speed/time saving of telephone ordering

Challenges
 Acceptance by field salespeople
 Management
 Role of the Internet
Sales Force Organization:
Economic Analysis of Sales Agents

Independent
Total
Agents
Selling
Costs
Own Sales Force

Break-Even Sales

Sales Volume

Figure 6-10: Total Costs of Independent Agents vs. Own Sales Force
Sales Force Organization:
Market Conditions Favoring Sales Agents
 The market is fragmented  The products are easily
and customers are difficult to understood commodities that
find or understand. have been around for a long
 Buying is decentralized. time.
 The selling cycle is short and
 Local knowledge and local
distribution is important. orders are typically small.
 It is not necessary to tightly
 The company is selling only a
control the selling effort.
few products.
 There is a good potential
 Ongoing support activities
are not important and the
sales agency who has
significant marketing company does not need
customer information.
expertise in the industry.
 The company is not well
known and has little equity in
the market.

Figure 6-11: Market Factors Favoring the Use of Sales Agents

 Customer Awareness

Brand Awareness

Brand Consideration
Marketing
Brand Preference

Handoff
Purchase Intent

Purchase
Sales
Customer Loyalty

Customer Advocacy

Figure 6-12: The Marketing-Sales Handoff

Sales Force Organization:
Key Account Sales Teams at Ericsson
Country President

V.P. Business Operations

Key Account Team

Director of Director Global Accounts

Sales Director
Operations Product Support Director

Account Product Account

Project Managers
Managers Managers Managers

Account Technical Support Account

Coordinators Engineers Coordinators

Figure 6-13: Sales Team Organization at Ericsson