Part III

SALES FORCE ACTIVITIES

Chapter 6:

Sales Force Organization

Sales Force Organization: Impact

Structure

Sales Management Role

Compensation Recruiting/ Selection Training Program Performance Evaluation

Figure 6-1: Decisions Affected by Sales Force Organization

Sales Force Organization: Topics

Sales Force Specialization

Strategic Account Management

Telemarketing

Independent Agents

Emerging Issues

Strategic Account Programs: Survey Results

49%

45%

Today In Five Years

24%
18% 20% 11% 17% 16%

Customer

Generalist

Product Lines

Functional

Figure 6-2: How Sales Forces are Organized

Sales Force Organization: Generalist

National Sales Manager

Central Regional Sales Manager

Northeast District Sales Manager

Eastern Regional Sales Manager

Mid-Atlantic District Sales Manager

Western Regional Sales Manager

Southern District Sales Manager

Connecticut Rhode Island

Maine

New Jersey

Pennsylvania District of Columbia

North Carolina

South Carolina

Vermont Massachus etts

New York

Delaware

Georgia

Alabama

New York

Virginia

Maryland

Mississippi

Florida

Figure 6-3: Geographical Sales Organization

Sales Force Organization: Product Specialists

National Sales Manager Eastern Regional Sales Manager Northeast District Sales Manager Mid-Atlantic District Sales Manager Southern District Sales Manager

Printer Equipment Salesperson

Server Salesperson

Minicomputer Salesperson

Programmable Calculator Salesperson

Copier Salesperson

Large Computer 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 Manager Eastern Regional Sales Manager Mid-Atlantic District Sales Manager Manager of Export Sales

Northeast District Sales Manager

Southern District Sales Manager

Salesperson For Educational Institutions

Salesperson for Retail Customers

Salesperson for Government Agencies

Salesperson for Bank Customers

Salesperson for Manufacturers

Salesperson for Wholesale Customers

Figure 6-5: Customer 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 Sales Manager

Systems Manager

Administrative Manager Market Administrative

Account Executives
(Salespeople)

(Technical Support)

System Reps

(Training & Installation)

Figure 6-6: Functional Specialization

Organizational Structure
Generalist (Geographic)

Advantages
Low cost No geographic overlap No customer overlap

Disadvantages
Limited product line knowledge Limited customer knowledge Lack of management control over product or customer emphasis Low geographic efficiency Customer duplication Geographic duplication

Product

Product knowledge Control over product emphasis

Customer

Deeper customer knowledge Control over customer emphasis

High cost Less product knowledge More geographic duplication Difficult coordination with product managers Coordination Geographic duplication Customer duplication

Functional

Effectiveness in performing selling activities

Figure 6-7: Comparing Sales Organization Structures

Strategic Accounts:
Previous Approach
Bsiness Plan 3 6 months Duration Structure of Tactical Business Plan promotional program

What is Different about Strategic Accounts?

New Strategic Account
2 3 years Strategic business plan focused on growth and profitability Senior management from both companies

Personnel Sales reps and Involvement purchasing agents

Figure 6-8 : Changes in Joint Account Planning

Strategic Accounts: Alternative Organization Models

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

Field Rep Sales calls per day 5

Telemarketing 25

Sales calls per quarter

Sales calls per year Salespeople required Cost per sales call

325
1,300 6.5 $250

1,624
6,500 1.2 $15

Cost per year

$1,998,750

$117,000

Table 6-1: Doing the Math on Account Management

Sales Force Organization: Scope of Telemarketing

Activity Description

Customer Service Prospecting and Lead Qualification

Account Management Promotion Support

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

Firms are taking a proactive approach to prospecting by having telemarketers call prospects or qualify them for face-to-face selling.
Selling secondary product lines or service small customers by phone, thereby freeing their salespeople to concentrate on larger customers and strategic product lines. Develop newspaper and magazine ads that feature either a local or an 800 number to get additional product information or place an order.

Figure 6-9: The Scope of Telemarketing Activities

Sales Force Organization:

Advantages
Low cost per sales call

Telemarketing Advantages and Challenges

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: Economic Analysis of Sales Agents

Total Selling Costs

Independent Agents Own Sales Force Break-Even Sales

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

Sales Force Organization:

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.

Market Conditions Favoring Sales Agents

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.

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

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

Customer Awareness

Brand Awareness

Brand Consideration

Marketing

Brand Preference

Handoff
Purchase Intent

Purchase Customer Loyalty

Sales

Customer Advocacy

Figure 6-12: The Marketing-Sales Handoff

Sales Force Organization: Key Account Sales Teams at Ericsson

Country President V.P. Business Operations Key Account Team

Sales Director

Director of Operations

Director Product Support

Global Accounts Director

Account Managers

Project Managers

Product Managers

Account Managers

Account Coordinators

Technical Support Engineers

Account Coordinators

Figure 6-13: Sales Team Organization at Ericsson