Part III SALES FORCE ACTIVITIES Chapter 6: Sales Force Organization.

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Part III Part III SALES FORCE ACTIVITIES SALES FORCE ACTIVITIES Chapter 6: Sales Force Organization

Transcript of Part III SALES FORCE ACTIVITIES Chapter 6: Sales Force Organization.

Part IIIPart III

SALES FORCE SALES FORCE ACTIVITIESACTIVITIES

Part IIIPart III

SALES FORCE SALES FORCE ACTIVITIESACTIVITIES

Chapter 6:

Sales Force Organization

Figure 6-1: Decisions Affected by Sales Force OrganizationFigure 6-1: Decisions Affected by Sales Force Organization

Structure

Performance Evaluation

Compensation

TrainingProgram

Recruiting/Selection

SalesManagement

Role

Sales Force Organization: Sales Force Organization: ImpactImpact

Sales Force Organization: Sales Force Organization: TopicsTopics

Sales ForceSales Force

SpecializatioSpecializationn

Strategic Strategic

AccountAccount

ManagementManagement

TelemarketinTelemarketingg

IndependentIndependent

AgentsAgentsEmergingEmerging

IssuesIssues

Strategic Account Programs:Strategic Account Programs:Survey ResultsSurvey Results

18%18%

49%49%

20%20%

11%11%

45%45%

24%24%

17%17% 16%16%

TodayIn Five Years

Customer Generalist Product Lines

Functional

Figure 6-2: How Sales Forces are OrganizedFigure 6-2: How Sales Forces are Organized

Figure 6-3: Geographical Sales OrganizationFigure 6-3: Geographical Sales Organization

Eastern RegionalSales Manager

Sales Force Organization: Sales Force Organization: GeneralistGeneralist

MassachuMassachusettssetts

VermontVermont New YorkNew York

New YorkNew York

MaineMaineNew New

JerseyJersey

DelawareDelaware

VirginiaVirginia

ConnecticutConnecticutRhode Rhode IslandIsland

Pennsy-Pennsy-lvanialvania

District of District of ColumbiaColumbia

MarylandMaryland

North North CarolinaCarolina

GeorgiaGeorgia

MississipMississippipi

South South CarolinaCarolina

AlabamaAlabama

FloridaFlorida

National SalesManager

Western RegionalSales Manager

Central RegionalSales Manager

Northeast District Northeast District Sales ManagerSales Manager

Mid-Atlantic Mid-Atlantic District Sales District Sales

ManagerManager

Southern District Southern District Sales ManagerSales Manager

Figure 6-4: Product Specialized Sales Figure 6-4: Product Specialized Sales ForceForce

Sales Force Organization: Sales Force Organization: Product SpecialistsProduct Specialists

Eastern RegionalSales Manager

National SalesManager

Northeast District Northeast District Sales ManagerSales Manager

Southern District Southern District Sales ManagerSales Manager

PrinterPrinterEquipmentEquipmentSalespersoSalesperso

nn

Server Server SalespersoSalesperso

nn

MinicomputMinicomputer er

SalespersonSalesperson

ProgrammabProgrammablele

CalculatorCalculatorSalespersonSalesperson

CopierCopierSalespersoSalesperso

nn

Large Large ComputerComputer

SalespersonSalesperson

Mid-Atlantic Mid-Atlantic District Sales District Sales

ManagerManager

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

Product Specialist Product Specialist Organization: Organization: AnalysisAnalysis

Figure 6-5: Customer Specialized Sales Figure 6-5: Customer Specialized Sales ForceForce

Sales Force Organization: Sales Force Organization: Customer SpecialistsCustomer Specialists

Eastern RegionalSales Manager

National SalesManager

Northeast District Northeast District Sales ManagerSales Manager

Southern District Southern District Sales ManagerSales Manager

SalespersonSalespersonFor For

Educational Educational InstitutionsInstitutions

Salesperson Salesperson for for

ManufacturersManufacturers

Salesperson Salesperson for Retail for Retail

CustomersCustomers

Salesperson Salesperson for for

Government Government AgenciesAgencies

Salesperson Salesperson for Bank for Bank

CustomersCustomers

Mid-Atlantic Mid-Atlantic District Sales District Sales

ManagerManager

National AccountsManager

Manager ofExport Sales

Salesperson Salesperson for Wholesale for Wholesale

CustomersCustomers

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

Customer Specialist Customer Specialist Organization: Organization: AnalysisAnalysis

Figure 6-6: Functional Figure 6-6: Functional SpecializationSpecialization

Sales Force Organization: Sales Force Organization: Functional SpecialistsFunctional Specialists

DivisionMarketing Manager

SystemsManager

IndustrySales Manager

AdministrativeManager

System RepsSystem Reps(Technical Support)(Technical Support)

Account Account ExecutivesExecutives (Salespeople)(Salespeople)

MarketMarketAdministrativeAdministrative

(Training & Installation)(Training & Installation)

Figure 6-7: Comparing Sales Organization StructuresFigure 6-7: Comparing Sales Organization Structures

Organizational Structure

Advantages Disadvantages

Generalist (Geographic)

•Low cost•No geographic overlap•No customer overlap

•Limited product line knowledge•Limited customer knowledge•Lack of management control over product or customer emphasis

Product •Product knowledge•Control over product emphasis

•Low geographic efficiency•Customer duplication•Geographic duplication

Customer •Deeper customer knowledge•Control over customer emphasis

•High cost•Less product knowledge•More geographic duplication•Difficult coordination with product managers

Functional •Effectiveness in performing selling activities

•Coordination•Geographic duplication•Customer duplication

Figure 6-8 : Changes in Joint Account Figure 6-8 : Changes in Joint Account PlanningPlanning

Strategic Accounts:Strategic Accounts:What is Different about Strategic What is Different about Strategic Accounts?Accounts?

PreviousPreviousApproachApproach

New Strategic New Strategic AccountAccount

Bsiness Plan Duration

3 – 6 months

2 – 3 years

Structure of Business

Plan

Tactical promotional program

Strategic businessplan focused on

growth and profitability

Personnel Involvement

Sales reps and purchasing

agents

Senior management from both companies

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

Strategic Accounts:Strategic Accounts:Alternative Organization ModelsAlternative Organization Models

Table 6-1: Doing the Math on Account Management

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

ActivityActivity DescriptionDescription

Customer Service

Companies provide customers provide customers with a number they can call if they have questions.

Prospecting and Lead

Qualification

Firms are taking a proactive approach to prospecting by having telemarketers call prospects or qualify them for face-to-face selling.

Account Management

Selling secondary product lines or service small customers by phone, thereby freeing their salespeople to concentrate on larger customers and strategic product lines.

Promotion Support

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

Sales Force Organization:Sales Force Organization:Scope of TelemarketingScope of Telemarketing

Figure 6-9: The Scope of Telemarketing Figure 6-9: The Scope of Telemarketing ActivitiesActivities

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:Sales Force Organization:Telemarketing Advantages and Telemarketing Advantages and ChallengesChallenges

Figure 6-10: Total Costs of Independent Agents vs. Own Figure 6-10: Total Costs of Independent Agents vs. Own Sales ForceSales Force

IndependentAgents

Own Sales Force

Break-Even Sales

Sales VolumeSales Volume

Sales Force Organization:Sales Force Organization:Economic Analysis of Sales Economic Analysis of Sales AgentsAgents

TotalTotalSellingSelling

CostsCosts

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

Sales Force Organization:Sales Force Organization:Market Conditions Favoring Sales Market Conditions Favoring Sales AgentsAgents The market is fragmented

and customers are difficult to find or understand.

Buying is decentralized.

Local knowledge and local distribution is important.

The company is selling only a few products.

There is a good potential sales agency who has significant marketing expertise in the industry.

The company is not well known and has little equity in the market.

The products are easily understood commodities that have been around for a long time.

The selling cycle is short and orders are typically small.

It is not necessary to tightly control the selling effort.

Ongoing support activities are not important and the company does not need customer information.

Figure 6-12: The Marketing-Sales Figure 6-12: The Marketing-Sales HandoffHandoff

Marketing

Sales

Handoff

Customer Awareness

Brand Awareness

Brand Consideration

Brand Preference

Purchase Intent

Purchase

Customer Loyalty

Customer Advocacy

Country President

V.P. Business OperationsKey Account Team

Global AccountsDirector

DirectorProduct Support

Director ofOperations

Sales Director

AccountManagers

AccountCoordinators

Project Managers

Technical SupportEngineers

ProductManagers

AccountManagers

AccountCoordinators

Figure 6-13: Sales Team Organization at EricssonFigure 6-13: Sales Team Organization at Ericsson

Sales Force Organization:Sales Force Organization:Key Account Sales Teams at EricssonKey Account Sales Teams at Ericsson