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