Sales Organisation & Structure

m

Divide and coordinate activities so that
the group can accomplish objectives
better than if acting as individuals.
Specialization of Labor
Stability and Continuity
Coordination and Integration
Goals Structure

Concentrate: Become more proficient at
one thing.
Assign tasks according to ability.
Line/Staff organization is most common.

×ou can organize around activities, not

around individuals.
The organization survives the individuals

within it.

Activities of the sales force must be
integrated with customer needs and
concerns.
Selling activities must be coordinated
with other departments: production, product
development, logistics, finance.
Selling tasks among specialists must be
coordinated.

Geography: States/Regions, Downtown/Suburban
Product Type: ×ard Equipment vs. Power Tools
Customer Type: Industrial/Consumer,

Hospitals/Schools, Wholesalers/Retailers
Selling Function: Prospecting, presenting,

servicing

Which is right for you?

Ôanufacturers Representative
Pure Commission; No Ownership
Advantages:
Established Contacts
Familiarity with Technology
Fixed costs spread over several manufacturers
Strictly variable cost to manufacturer (No cost unless they
sell.)
Selling Agent
Acts as sole sales agent of the manufacturer, rather
than just in one geographic area or product.
Broader authority.

Substantial Transaction-Specific
Investments: Lock-in (e.g. Showroom)
Agency Theory: Agent looks out for self
first and foremost
Alignment of interests
Altruism
Hiring own sales people limits flexibility
d
Simplest and most common form
Each salesperson handles all sales
functions in the territory.
Advantages:
Cheaper: travel, management
One point of contact for customer
Disadvantages:
No division/specialization of labor
Salespeople focus on products/customers
that benefits themselves.
m
used primarily by firms with large and diverse
product lines, and firms with highly technical
products.
Advantages:
Familiarity with technology and applications
Can lead to closer coordination with production
Better control: can allocate across company lines.
Disadvantages:
Duplication of effort higher selling costs
Need more coordination
Ôultiple contact people for customers

Advantages:
Better understanding of customers¶ needs
Can be trained to sell to particular customers (e.g.
Hospitals vs. Schools)
Can gain insight into product applications,
innovations, new products
Ôanagers can vary sales force size to market
Disadvantages:
Higher selling expenses
Large customers can have multiple sales contacts

Acquiring new customers (development
specialists) vs. maintaining and servicing
existing customers
Telemarketing: Inside/Outside Sales
Prospecting/Qualifying: turn leads over
Servicing problems quickly: hotlines
Seeking repeat sales: especially small & remote
customers
Quicker communication on noteworthy
developments
Targeted advertising, direct mail, toll-free lines,
web pages

Salesperson must be a business manager:

Be able to customize products/services
Knowledgeable about strategic objectives
Can build and implement a business plan
Rule of Thumb: 10% of customers can lead to

50% of sales

Ôajor account management has dual goals:
Ôaking sales
Developing long term relationships with major
customers
Larger share of customer leads to larger profit.
But:
Ôajor accounts often need detailed and
sophisticated treatment.
Need more experienced, expert salespeople with
greater authority. Commission may lead to conflict.

Assign key accounts to top sales
executives
Create separate corporate division
Create separate sales force

Smaller firms don¶t have resources for
separate division or sales forces.
They have relatively few major accounts
Salesperson must be high enough in the
organization to make/influence decisions.
Takes time from managerial
responsibilities.

When few customers account for a large
percentage of sales: can coordinate
manufacturing, logistics, marketing and
sales.
But there is often a duplication of efforts

and added sales expenses.

Treat major account executives like:
Regional sales managers
District managers
Vice presidents
(See Ex 5-7 on pg. 112)
Advantages:
Know customer better, can service better
Often viewed as promotion, can assign best people
Disadvantages:
Duplication of effort
Expense

Response to more complex relationship
with customer: Stronger knowledge,
better service
Get different expertise from multiple
organizational functions
High costs: time and personnel
Complicated: coordination, motivation,
compensation

!

Teams call on corresponding
management levels at the customer¶s
office.
VP to VP
Engineer to Engineer
Technician to Technician

Teams from multiple organizations work
together to sell complex products or
systems.
Capitalize on each member¶s

competencies (technical knowledge, sales
force)

Direct and often automatic reordering
Easier for customer
Creates structurally tied relationship
Frees sales force up to sell to new
customers, or new products to existing
customers.
d

Same basic issues:
Own sales force vs. agent
If own people, what structure?
Decision factors more complicated due to

distance, customs, legal/political
considerations.
D

Should Sales be integrated within the
Ôarketing Department as it seems to be
in over ¾ of companies responding to
survey?
Should it be a separate unit as it is in
about 20% of the responding companies?
D

Number of Ôanagement Levels vs. Span
of Control
How many levels to have?
How many people should each manager
supervise?
Fewer levels
Facilitates communication
Lowers administrative costs
Lowers quality: less effectiveness and
productivity
D

Reduce span of control if:
Sales task is complex
Profit impact of each salesperson¶s
performance is high
Salespeople are well paid and professional
D

Where should authority reside?
Hiring, Firing, Evaluation
Selling and Ôanagerial Responsibilities?
Ôost spend about 1/3 of time on selling
They want commission rewards
usually needed on key accounts, especially for their
sales ability
Should Sales Ôanager control sales-related
activities?
Installation, maintenance, order processing,
delivery
usually not credit: conflict and awkward
D

Technology may change sales
management issues as much as it has
sales person issues. Cell phones,
computers, etc.
Staff Support vs. Outsourcing
Specialized knowledge
Ôost common: recruiting, training, sales
analysis (Research?)

Sales Organisation & Structure

Uploaded by

Copyright:

Available Formats

Sales Organisation & Structure

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sales Organisation & Structure

Uploaded by

Copyright:

Available Formats

m

Assign tasks according to ability.

Line/Staff organization is most common.

×ou can organize around activities, not

The organization survives the individuals

Product Type: ×ard Equipment vs. Power Tools

Customer Type: Industrial/Consumer,

Selling Function: Prospecting, presenting,

Which is right for you?

Salesperson must be a business manager:

Rule of Thumb: 10% of customers can lead to

Create separate corporate division

Create separate sales force

But there is often a duplication of efforts

Capitalize on each member¶s

Decision factors more complicated due to

You might also like

Sales Organisation & Structure

Uploaded by

Copyright:

Available Formats

Sales Organisation & Structure

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sales Organisation & Structure

Uploaded by

Copyright:

Available Formats

m 

 Assign tasks according to ability.

 Line/Staff organization is most common.

 ×ou can organize around activities, not

 The organization survives the individuals

 Product Type: ×ard Equipment vs. Power Tools

 Customer Type: Industrial/Consumer,

 Selling Function: Prospecting, presenting,

Which is right for you?

 Salesperson must be a business manager:

Rule of Thumb: 10% of customers can lead to

 Create separate corporate division

 Create separate sales force

 But there is often a duplication of efforts

 Capitalize on each member¶s

 Decision factors more complicated due to

You might also like

m

Assign tasks according to ability.

Line/Staff organization is most common.

×ou can organize around activities, not

The organization survives the individuals

Product Type: ×ard Equipment vs. Power Tools

Customer Type: Industrial/Consumer,

Selling Function: Prospecting, presenting,

Salesperson must be a business manager:

Create separate corporate division

Create separate sales force

But there is often a duplication of efforts

Capitalize on each member¶s

Decision factors more complicated due to