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:
Generalist
National Sales
Manager
Central Regional Eastern Regional Western Regional
Sales Manager Sales Manager Sales Manager
Northeast District Mid-Atlantic Southern District
Sales Manager District Sales Sales Manager
Manager
Connecticut New Pennsy- North South
Rhode Maine
Jersey lvania Carolina Carolina
Island
District of
Vermont New York Delaware Georgia Alabama
Columbia
Massachu
New York Virginia Maryland Mississip Florida
setts
pi
Figure 6-3: Geographical Sales Organization
Sales Force Organization:
Product Specialists
National Sales
Manager
Eastern Regional
Sales Manager
Northeast District Mid-Atlantic Southern District
Sales Manager District Sales Sales Manager
Manager
Dictation Typewriter Minicomput Programmab Copier Large
Equipment Salesperso er le Salesperso Computer
Salesperso n Salesperson Calculator n Salesperson
n 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 Southern District
Sales Manager District Sales Sales Manager
Manager
Salesperson Salesperson Salesperson Salesperson
For for Retail for for Bank
Educational Customers Government Customers
Institutions Agencies
Salesperson Salesperson
for for Wholesale
Manufacturers Customers
Figure 6-4: Product 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 System Reps Administrative
Executives (Technical Support)
(Training & Installation)
(Salespeople)
Figure 8-5: Functional Specialization
Functional Specialists:
Alternatives
Alternatives Companies
New Customers American Express
Gillette
Retention Browning-Ferris Industries
End-Users Lexmark International
Sales Engineers 3M
AT&T
Service IBM
Consultants McKesson Corporation
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
The Role of
Telemarketing
Sales Force Organization:
Cost Analysis
Field Rep Telemarketing
Sales calls per day 5 25
Sales calls per quarter 325 1624
Sales calls per year 1300 6500
Salespeople required 6.5 1.2
Cost per sales call $250 $15
Cost per year $1,998,75 $117,000
0
Sales Force Organization:
Scope of Telemarketing
Activity Description
Companies provide customers provide
Customer customers with a number they can call if
Service they have questions.
Firms are taking a proactive approach to
Prospecting and prospecting by having telemarketers call
Lead prospects or qualify them for face-to-face
selling.
Qualification
Selling secondary product lines or service
Account small customers by phone, thereby freeing
Management their salespeople to concentrate on larger
customers and strategic product lines.
Develop newspaper and magazine ads
Promotion that feature either a local or an 800
Support number to get additional product
information or place an order.
Figure 6-8: 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
Should you get outside
help?
Sales Force Organization:
Economic Analysis of Sales
Agents
Independent
Total
Agents
Selling
Costs
Own Sales Force
Break-Even
Sales
Sales Volume
Figure 6-9: Total Costs of Independent Agents vs. Own Sales
Sales Force Organization:
Market Conditions Favoring Sales
Agents
The market is fragmented The products are easily
and customers are understood commodities
difficult to find or that have been around for
understand. a long time.
Buying is decentralized. The selling cycle is short
and orders are typically
Local knowledge and local
small.
distribution is important.
It is not necessary to
The company is selling
tightly control the selling
only a few products.
effort.
There is a good potential
Ongoing support activities
sales agency who has
are not important and the
significant marketing
company does not need
expertise in the industry.
customer information.
The company is not well
known and has little
equity in the market.
Figure 6-10: Market Factors Favoring the Use of Sales
Sales Force Organization:
Selecting a Sales Agency
1.Define the ideal market focus.
2.Identify compatible principles.
3.Specify the necessary technical
background.
LOCATING AGENTS: Rep. Directories
Customer References
Compatible Manufactures
References from Current
Agents
Trade Shows
Sales Force Organization:
Sales Agent Decision and the Product Life Cycle
Disengagement
Decision Re-engagement Manufacturer
Decision Re-employs
Rep firm to
lower fixed
sales costs
Introduction
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 6-11: Sales Team Organization at Ericsson
Sales Force Organization:
Evaluating Organizational
Structure
Financial performance -- must consider
BOTH costs and revenues
Adaptability
External Internal
− New competitors − Company goals
− Changing technology − Management philosophy
− Modification to channel − Production capabilities
systems − Technical resources
− Industry life cycle
Integration -- subunits of sales
organization must work in harmony
