Sales Force Structure/Organization

Sales Force Structure/Organization

In this lesson, you’re expected to learn:
– the importance of a sales force structure
– how to define your sales team
– the best way to organize your Sales Force

What is Sales Force Organization?

Sales force organization is the process of allocating and managing sales resources to meet sales and marketing objectives.

The organization reflects the number of sales representatives and their skills, the size of the product range, the location of customers and prospects, and the market sectors in which a company operates.

An effective sales force organization:
– provides account and geographic coverage
– minimizes wasted resources and time
– ensures a higher probability of attaining sales quotas

Today most B2B companies rely heavily on a professional sales force to locate prospects, develop them into customers and grow the business. Alternatively, they hire manufacturers’ representatives and agents to carry out the direct selling task.

In addition, many consumer companies use a direct selling force. For many firms, sales force performance is critical.

Importance of Your Sales Force Structure

Small-business owners must organize their sales forces to be as efficient as possible. If your salespeople duplicate their efforts by servicing the same customers in a particular region, your business is wasting its resources.

A well-designed structure avoids such redundancies so the amount invested in sales and marketing results in the highest possible returns.

How to Organize a Sales Force

You can organize your sales force in a number of ways including by region, product line, market sector or customer size.

The sales structure you ultimately choose depends on a number of factors:
– the number of people on your sales team
– the size and complexity of your product range
– the geographical spread of your business
– the type of customers you deal with

[Optional] About LinkedIn’s Global Sales Organization
Watch this 3-minute video to learn more.
Link to the video:

Defining a sales team

Types of Sales Teams

Businesses can decide between two types of sales teams or use a combination of both.

1) Outside sales representatives, also called field reps, work independently to generate sales. This type of sales force structure works best with responsible, self-starters who need little supervision. They travel to customer locations to pitch products that require demonstration.

2) Inside sales representatives, also called telemarketers, spend most of their time on the phone talking with prospective customers or making appointments with customers.

Why do you need a Sales Team?

The benefits of hiring a competent sales team include: 
– increased brand awareness
– heightened company loyalty
– increased revenues 

Once established, a sales force creates excitement around the products and services they sell.

In addition to generating income, the sales force builds trust with customers since sales representatives engage customers at all stages of the relationship.

Building Trust With Customers

New customers need interaction and opportunities to learn about the brand while current customers gain trust through consistent follow-up and communication with the sales representative.

Sales representatives also work to re-engage previous customers through promotions, discounts, and communications. Building trust throughout the customer sales cycle increases customer satisfaction.

How large should your Sales team be?

During the initial phase, sales forces have to educate potential customers about products and change customers’ buying processes before they can generate sales.

Salespeople must also chase down and make every possible sale in order to drive business. That’s a lot of work, but new ventures have limited capital to invest in attracting and developing good salespeople.

As a result, many new businesses adopt an “earn your way” approach to sizing their sales forces—they start small and add more salespeople after they have generated more money.

The Need to Specialize

In the growth phase, it’s not sufficient for many companies to maintain a sales force of generalists who sell the entire product line to all markets.

Salespeople need to master multiple products, markets, and selling tasks at this stage. As repeat sales become a larger proportion of overall sales, customers will require service and support, adding to the workload of a salesperson.

As tasks grow beyond a salesperson’s capacity to perform their job, they are likely to drop the customers, products, and selling activities that are most difficult to manage.

See full-size image:
[Optional] What Top Sales Teams Have in Common
Designing your sales force
Three Main Approaches:

1) Market-Based Sales
2) Product-Based Sales
3) Geography-Based Sales
Let’s look at each of these in more detail.
See full-size image:
1) Market-Based Sales

According to the market-based structure, the divisions of an organization are based around markets, industries, or customer types.

This structure is ideal for an organization that has products or services that are unique to specific market segments, and is particularly effective if that organization has advanced knowledge of those segments.

The downsides: Too much autonomy can lead to divisions developing systems that are incompatible with one another, and divisions may also end up inadvertently duplicating activities that other divisions are already handling.

See full-size image:
2) Product-Based Sales

Sometimes, specialized knowledge is the way to go. Having salespeople become experts in a specific product or product line can make them better sellers.

This is especially true with products that are highly technical or which are sold to professionals. Sales for medical devices and equipment, for example, requires a salesperson to have an in-depth understanding of the product.

Physicians who might purchase these products can have complicated and technical questions that require the salesperson to have a thorough understanding of how the product works and the setting in which it is used.

3) Geography-Based Sales

A geographically focused sales team is very common and effective in certain industries. The concept is that if your salespeople specialize in a certain area, they can scour it thoroughly and understand its workings.

The sales approach to a suburban community can be very different from an inner-city area or a rural town. Geographically-based sales allows salespeople to know their markets and develop appropriate approaches to a particular area.

It also can prevent salespeople from bumping into each other if their maps and territories are well-defined. Industries that use this approach include direct cosmetic sales, telecommunications, print advertising and staffing.

Advantages of Geographic Sales Territories

• Decrease Travel and Increase Selling Time
By assuring that all of your sales reps’ opportunities are centered in one general area, you allow them to manage their time better. Instead of spending unproductive hours on-the-go, they can maximize their time selling and landing new accounts.

• Reduce Conflict Amongst the Sales Team
If you happen to have a few ambitious, fiesty sales professionals on your team, you may run into problems on occasion based on which team member an account actually belongs to. Aligning sales territories decreases the potential for conflict.

• Decreased Language Barriers
Many of today’s global territories are limited due to cultural and language barriers. These are obstacles that should not be overlooked, as they can have an effect on the overall productivity of your company. If your organization strategically places sales reps within his or her native country’s Sales Territory, this allows for more efficient and effective selling to occur.

Hybrid Approach

Not everything is clearly defined in sales. Sometimes organizations develop a hybrid of these approaches.

For example, one sales team might cover large businesses in a particular geographical region and another the small businesses in that same region. There can be many positive results from this form of specialization.

However, managers need to develop clear definitions of both the geography and the company size. It can be easy for there to be gray areas in the terms “large business” and “small business.” Defining how many employees constitute a large business can help internal squabbling. Similarly, vague phrases can become problematic if left undefined.

Enterprise Salespeople

One special element in your Salesforce can be an enterprise salesman. In case you do close those big enterprise deals, this person can be invaluable to boosting a company’s bottom line with huge deals.

Enlarged version:
Activating Your Salespeople – Referral Sales

Why are so many salespeople doing referral sales wrong?Because they’re afraid. It’s scary to ask for more once you close a deal.

Salespeople worry that they might jeopardize a deal, or that it’ll make a positive conversation awkward. Go where others are afraid to go and you’ll find massive opportunity. Don’t let fear get in the way of winning.

Sales Training

However you arrange your sales team, it’s important that you invest in them.

Confidence and selling ability go hand in hand. Building confidence can be tricky, but having a good understanding of your product, your competition, and the most effective sales techniques can help build that confidence and make an average sales rep into a star performer.

You need to conduct training not only about your own products, services, company history, and existing clients, but also about selling techniques, technology, and software.

[Optional] Which Sales Structure Should You Have?
Structure or not, results matters most. Watch this 4-minute video to learn more.
Link to the video:
Jim Rohn Sứ mệnh khởi nghiệp