Sales Organization Structure And Sales Force Deployment
Module Four Sales Organization Structure and Sales Force Deployment
Learning Objectives 1. 2. 3. 4. Define the concepts of specialization, centralization, span of control versus management levels, and line versus staff positions. Describe the ways sales forces might be specialized. Evaluate the advantages and disadvantages of sales organization structures. Name the important considerations in organizing major account management programs. Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Learning Objectives 5. 6. 7. 8. Explain how to determine the appropriate sales organization structure for a given selling situation. Discuss sales force deployment. Explain three analytical approaches for determining allocation of selling offer. Describe three methods for calculating sales force size. Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Learning Objectives 9. Explain the importance of sales territories and list the steps in the territory design process. 10. Discuss the important “people” considerations in sales force deployment. Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Setting the Stage Strategy and Sales Organization Structure: IBM 1. What is one of the key changes IBM made to the structure of its sales organization? 2. What change did IBM make to the way its salespeople and sales managers interact? Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Sales Organization Concepts Specialization The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization. Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels. Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Sales Force Specialization Continuum Generalists All selling activities and all products to all customers Professional Selling: A Trust-Based Approach Some specialization of selling activities, products, and/or customers Specialists Certain selling activities for certain products for certain customers Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Span of Control vs. Management Levels Flat Sales Organization District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager Management Levels National Sales Manager Span of Control Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Span of Control vs. Management Levels Tall Sales Organization National Sales Manager District Sales Manager District Sales Manager District Sales Manager Regional Sales Manager District Sales Manager District District Sales Sales Manager Manager Management Levels Regional Sales Manager Span of Control Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Line vs. Staff Positions National Sales Manager Sales Training Manager Regional Sales Managers Sales Training Manager District Sales Managers Staff Position Salespeople Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Line Position Ingram LaForge Avila Schwepker Jr. Williams
Selling-Situation Factors and Organizational Structure Organizational Structure Environmental Characteristics Task Performance Performance Objective Specialization High Envir. uncertainty Nonroutine Adaptiveness Centralization Low Envir. Uncertainty Repetitive Effectiveness Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Customer and Product Determinants of Sales Force Specialization Customer Needs Different Simple Product Offering MarketDriven Specialization Product/MarketDriven Specialization GeographyDriven Specialization ProductDriven Specialization Complex Range of Products Customer Needs Similar Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Geographic Sales Organization National Sales Manager Sales Training Manager Eastern Region Sales Manager Western Region Sales Manager Zone Sales Managers (4) Zone Sales Managers (4) District Sales Managers (20) District Sales Managers (20) Salespeople (100) Salespeople (100) Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Product Sales Organization National Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager District Sales Managers (10) District Sales Managers (10) Salespeople (100) Salespeople (100) Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Market Sales Organization National Sales Manager Commercial Accounts Sales Manager Government Accounts Sales Manager Sales Training Manager Zone Sales Managers (4) District Sales Managers (5) District Sales Managers (25) Salespeople (50) Salespeople (150) Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Functional Sales Organization National Sales Manager Field Sales Manager Telemarketing Sales Manager Regional Sales Managers (4) District Sales Managers (2) District Sales Managers (16) Salespeople (40) Salespeople (160) Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Identifying Major Accounts Size of Account Large Large Account Major Account Regular Small Account Complex Account Simple Complex Complexity of Account Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Major Accounts Options Develop Major Account Salesforce Assign Major Accounts to Sales Managers Assign Major Accounts to Salespeople along with Other Accounts Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Comparison of Sales Organization Structures Organizational Structure Geographic Product Professional Selling: A Trust-Based Approach Advantages Low Cost No geographic duplication No customer duplication Fewer management levels Disadvantages Limited specialization Lack of management control over product or customer emphasis Salespeople become experts High cost in product attr. & applications Geographic duplication Management control over Customer duplication selling effort Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Comparison of Sales Organization Structures Organizational Structure Advantages 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 Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Hybrid Sales Organization Structure National Sales Manager Commercial Accounts Sales Manager Major Accounts Sales Manager Regular Accounts Sales Manager Field Sales Manager Western Sales Manager Professional Selling: A Trust-Based Approach Government Accounts Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager Telemarketing Sales Manager Eastern Sales Manager Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Salesforce Deployment Sales Force deployment decisions can be viewed as providing answers to three interrelated questions. 1. How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved? 2. How many salespeople are required to provide the desired amount of selling effort? 3. How should territories be designed to ensure proper coverage of accounts and to provide each salesperson with a reasonable opportunity for success? Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Interrelatedness of Sales Force Deployment Decisions Allocation Allocation of of Selling Selling Effort Effort Sales Sales Force Force Size Size Territory Territory Design Design Professional Selling: A Trust-Based Approach How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved? How many salespeople are required to provide the desired amount of selling effort? How should territories be designed and salespeople assigned to territories to ensure proper coverage of accounts and to provide each salesperson with a reasonable opportunity for success? Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Analytical Approaches to Allocation of Selling Effort Easy to Develop and Use Single Single Factor Factor Models Models Low Analytical Rigor High Analytical Rigor Portfolio Portfolio Models Models Decision Decision Models Models Difficult to Develop and Use Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Single Factor Models Easy to develop and use/low analytical rigor Accounts classified into categories based on one factor, such as market potential All accounts in the same category are assigned the same number of sales calls Effort allocation decisions are based on the analysis of only one factor and differences among accounts in the same category are not considered in assigning sales call coverage Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Single Factor Model Example Market Potential Categories Average Sales Calls to an Account Last Year Average Sales Calls to an Account Next Year A B C D 25 23 20 16 32 24 16 8 Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Portfolio Models Account Opportunity - an account’s need for and ability to purchase the firm’s products Competitive Position - the strength of the relationship between the firm and an account Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Portfolio Model Segments and Strategies Professional Selling: A Trust-Based Approach High Low Account Opportunity Competitive Position Strong Weak Segment 1 Segment 2 Segment 3 Segment 4 Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Decision Models Simple Basic Concept - to allocate sales calls to accounts that promise the highest sales return from the sales calls Optimal number of calls in terms of sales or profit maximization Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
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. Salesforce Turnover – Is very costly – Should be anticipated Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
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 needed—putting “the cart before the horse.” Salesforce size Forecasted sales / Average sales per person Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Sales Force Size: Analytical Tools The Workload Approach determines how much selling effort is needed to adequately cover the firm’s 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 Professional Selling: A Trust-Based Approach Total selling effort needed Average selling effort per salesperson Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Sales Force Size: Analytical Tools The Incremental Approach is the most rigorous for calculating salesforce size. Its compares the marginal profits and marginal costs associated with each incremental salesperson. The major advantage is that it quantifies the important relationships between salesforce size, sales, and costs. However, this method is difficult to develop, and it cannot be used for new sales forces where historical data and accurate judgments are not possible. # of Salespeople 100 101 102 103 Professional Selling: A Trust-Based Approach Marginal Contribution 85,000 80,000 75,000 70,000 Module 4: Sales Organization Structure and Sales Force Deployment Marginal Cost 75,000 75,000 75,000 75,000 Ingram LaForge Avila Schwepker Jr. Williams
Designing Territories Territories consist of whatever specific accounts are assigned to a specific salesperson. The territory can be viewed as the work unit for a salesperson. Territory Considerations – Trading areas – Present effort – Recommended effort Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Territory Design Procedure Select Planning and Control Unit Professional Selling: A Trust-Based Approach Analyze Planning and Control Unit Opportunity Form Initial Territories Finalize Territory Design Assess Territory Workload Module 4: Sales Organization Structure and Sales Force Deployment Ingram LaForge Avila Schwepker Jr. Williams
Sales Organization Structure and Sales Force Deployment Learning Objectives 1. Define the concepts of specialization, centralization, span of control versus management levels, and line versus staff positions. 2. Describe the ways sales forces might be specialized. 3. Evaluate the advantages and disadvantages of sales organization structures. 4.
need to explore when you look at organization design. Many people equate organization design with an organization's structure: The words "lean" and "flat" are used to describe organization design as well as it's structure. In fact, organizational design encompasses much more than simply the structure: Organization design is the process of .
Organizational structure is a system of task, reporting, and authority relationships within which the work of the organization is done. Thus, structure defines the form and function of the organization's activities. Structure also defines how the parts of an organization fit together, as in an organization char (Aarabi, 2006, p.15) .
3 Organization structure ontology The Organizational Structure Ontology (OSO) focuses on supporting the def-inition of organisational structures. Following literature from this domain, the organisational structure may be de ned as a structure and/or hierarchy of an organization and how its constituents work together to achieve common goals.
Sales Planning 3 Sales Planning is a key function in the procedure of sales management process. Sales planning is an effective method that involves sales forecasting, demand management, setting profit-based sales targets, and the written execution steps of a sales plan. Sales Planning is the process of org
The empirical method is based on using your own or other people's experience in sales organization. This method is not complete but it is often used. The scientific method is based on using science achievements in sales organization. There are several scientific methods of sales organization but all are based on analytical method.
The sales organization is also used to take, for example, a regional, national or international subdivision of the market into account. A sales organization is uniquely assigned to a company code. More than one sales organization can be assigned to a company code. If you use the Sales and Distribution module, you need at least one
TOPIC FIVE: PURCHASING AND SUPPLY ORGANIZATION An organizational structure is a system used to define a hierarchy within an organization. It identifies each job, its function and where it reports to within the organization. A structure is then developed to establish how the organization operates to execute its goals.
Accounting for the quality of NHS output 3 2. Accounting for the quality of healthcare output There is a great deal of variation among health service users in terms of the nature of their contact . The .
