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Sales Organization
4/14/12 Atish Atish Kamble Kamble

Definition
A sales organization defines duties, roles, rights, and responsibilities of sales people engaged in selling activities meant for the effective execution of the sales function.
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Sales Organization Concepts

Specialization The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can
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Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy.

Sales Force Specialization Continuum

Generalist Specialist
Some specialization of selling activities, products, and/or customers
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All selling activities and all products to all customers

Certain selling activities for certain products for certain customers

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Span of Control v/s. Management Levels

Flat Sales Organization Nationa l Sales Manage r District District Sales Sales Manag Manag er Span of er
Control

Management Levels

District Sales Manag er

District Sales Manag er

District Sales Manag er

Span of Control vs. Management Levels

Tall Sales Organization

Management Levels

National Sales Manager Regional Sales ManagerDistrict District

Sales Manager Sales Manager

District Sales Manager

Regional Sales Manager District

Sales Manager

District Sales Manager

District Sales Manager

Span of 4/14/12 Control

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Line vs. Staff Positions

National Sales Manager Sales Training Manager Regional Sales Managers Sales Training Manager District Sales Managers Staff Position Line Position

Salespeople
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Geographic Sales Organization

National Sales Manager

Sales Training Manager

Eastern Region Sales Manager Zone Sales Managers (4) District Sales Managers (20) Salespeople (100) Western Region Sales Manager Zone Sales Managers (4) District Sales Managers (20) Salespeople (100)

Product Sales Organization

National Sales Manager

Office Equipment Sales Manager District Sales Managers (10) Salespeople (100)

Office Supplies Sales Manager District Sales Managers (10) Salespeople (100)

Market Sales Organization

National Sales Manager

Commercial Accounts Sales Sales Manager Training Manager Sales Managers Zone (4) District Sales Managers (25) Salespeople (150)

Government Accounts Sales Manager District Sales Managers (5) Salespeople (50)

Functional Sales Organization

National Sales Manager

Field Sales Manager Regional Sales Managers (4) District Sales Managers (16) Salespeople (160)

Telemarketing Sales Manager District Sales Managers (2) Salespeople (40)

Comparison of Sales Organization Structures

Organizational Advantages Structure Geographic
Low Cost No geographic duplication No customer duplication Fewer management levels

Disadvantages

Limited specialization Lack of management control over product or customer emphasis

Product

Salespeople become experts in product & applications Management control over selling effort

High cost Geographic duplication Customer duplication

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Organizational Advantages Structure

Disadvantages

Market

Salespeople develop better understanding of unique customer needs Management control over selling allocated to different markets

High cost Geographic duplication

Functional

Efficiency in performing selling activities

Geographic duplication Customer duplication Need for coordination

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Salesforce Deployment

Sales Force deployment decisions can be viewed as providing answers to three interrelated questions. How much selling effort is needed How many salespeople are required How should territories be designed

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Interrelatedness of Sales Force Deployment Decisions

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Sales Force Size: Key Considerations

Sales Productivity - the ratio of sales generated to selling effort used

In early stages, the addition of salespeople increases sales considerably

more than the selling costs. As salespeople continue to be added, sales increases tend to decline until a point is reached when the costs to add a salesperson are more than the revenues that salesperson can generate.

Sales force Turnover

Is very costly Should be anticipated

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Sales Force Size: Analytical Tools

The Breakdown Approach is used to determine the number of salespeople needed to generate a forecasted level of sales. This approach is easy to develop. However, it is weak conceptually. The concept underlying the calculations is that sales determine the number of salespeople neededputting the cart before the horse.

Salesforce size = Forecasted sales / Average sales per person

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Sales Force Size: Analytical Tools

The Workload Approach determines how much selling effort is needed to adequately cover the firms market. Then the number of salespeople required to provide this amount of selling effort is calculated. This approach relatively simple to develop and is sound conceptually.
Number of salespeople = Total selling effort needed Average selling effort per salesperson
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Sales Organization Development

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Sales Organization Development - Defined

Sales organization development is a long range effort to achieve

and maintain continuous profitable sales growth performance: Through a problem solving and process improvement systematic approach

Through a collaborative management of team and organizational culture

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With the assistance of a sales organization development specialist

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When Sales Organization Development Is Needed?

requirements are present in all sales organizations whether they are in an:

Continuous sales organization development

Expanding / growing
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Consolidating
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Sales Organization Development Roles

usually involves:
Interdepartmental groups Internal Senior 4/14/12

Effective sales organization development

of employees

organization development leader

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management

Some typical situations that provide pressure for sales organization development Technological breakthroughs -Requiring new thinking, processes & methods to remain competitive &
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Pressures for Sales Organization Development

External changes
-Economic fluctuations

Internal changes

-Energy crisis -Environmental regulations -Increased global competition -Product, market & industry gyrations

-Worker concerns -Morale problems -Change in leadership position -Computer system

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Keys to Sales Organization Development

The keys to effectively utilizing the energies of individuals within the sales organization is to leverage off the following cycle

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Cont

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Cont

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Goals of Sales Organization Development

Sales organization development is being increasingly relied on to stimulate:
Productivity Profitability Employee Morale 4/14/12
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Strategy Of Sales Organization Development

The strategy of sales organizational development is to integrate the ongoing activities of A sales organization:

To facilitate sales organization development learning Examine present ways work is done & develop & evaluate more effective alternatives.

Develop a joint action plan to help sales organization members change critical behaviors & more effectively plan for the future.
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Cont
Facilitate organizational development in A manner that:

Reduces conflict

Increases collaboration & trust

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Real Change vs Cosmetic Change

Cosmetic change in an organization is the development of A new strategy using the same people and processes that have not effectively addressed change in the past.
Real change involves behavior change -Learned through hands on experience -Supported by technical systems change -A change in values and work culture Atish Kamble

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Thank you

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Atish Kamble