1. Sales Management 6 Sales Organization

2. Purpose of Sales Organization Divide and coordinate activities so that the group can accomplish objectives better than if acting as individuals. Divide and coordinate activities so that the group can accomplish objectives better than if acting as individuals. –Specialization of _________ –_________and _________ –_________and Integration Goals  Structure Goals  Structure

3. Specialization of Labor Concentrate: Become more proficient at one thing. Concentrate: Become more proficient at one thing. Assign tasks according to ability. Assign tasks according to ability. Line/Staff organization is most common. Line/Staff organization is most common.

4. Stability and Continuity You can organize around activities, not around individuals. You can organize around activities, not around individuals. The organization survives the individuals within it. The organization survives the individuals within it.

5. Coordination and Integration Activities of the sales force must be integrated with customer needs and concerns. Activities of the sales force must be integrated with customer needs and concerns. Selling activities must be coordinated with other departments: production, product development, logistics, finance. Selling activities must be coordinated with other departments: production, product development, logistics, finance. Selling tasks among specialists must be coordinated. Selling tasks among specialists must be coordinated.

6. Internal: Horizontal Structure _________ : States/Regions, Downtown/Suburban _________ : States/Regions, Downtown/Suburban _________ : Yard Equipment vs. Power Tools _________ : Yard Equipment vs. Power Tools _________ : Industrial/Consumer, Hospitals/Schools, Wholesalers/Retailers _________ : Industrial/Consumer, Hospitals/Schools, Wholesalers/Retailers _________ : Prospecting, presenting, servicing _________ : Prospecting, presenting, servicing

7. Geographic Organization Simplest and most common form Simplest and most common form Each salesperson handles all sales functions in the territory. Each salesperson handles all sales functions in the territory. Advantages: Advantages: –_________: travel, management –One point of contact for _________ Disadvantages: Disadvantages: –No division/specialization of _________ –Salespeople focus on products/customers that _________ _________.

8. Product Orientation Used primarily by firms with large and diverse product lines, and firms with highly technical products. Used primarily by firms with large and diverse product lines, and firms with highly technical products. Advantages : Advantages : –Familiarity with _________and _________ –Can lead to closer coordination with _________ –Better control: can allocate across company lines. Disadvantages : Disadvantages : –Duplication of _________  higher selling costs –Need more _________ –Multiple contact people for customers

9. Customer/Market Organization Advantages : Advantages : –Better understanding of _________ _________ –Can be trained to sell to particular _________ (e.g. Hospitals vs. Schools) –Can gain insight into product applications, _________, new products –Managers can vary sales force size to market Disadvantages : Disadvantages : –Higher _________expenses –Large customers can have multiple sales _________

10. Selling Function Organization Each salesperson focuses on a particular part of the selling process. Each salesperson focuses on a particular part of the selling process. Acquiring new customers (development specialists) vs. maintaining and servicing existing customers Acquiring new customers (development specialists) vs. maintaining and servicing existing customers Telemarketing: Inside/Outside Sales Telemarketing: Inside/Outside Sales –Prospecting/Qualifying: turn leads over –Servicing problems quickly: hotlines –Seeking repeat sales: especially small & remote customers –Quicker communication on noteworthy developments –Feed-in via targeted advertising, direct mail, toll-free lines, web pages

11. National/Key Accounts I Rules of Thumb: ___% of customers can lead to ___% of sales; ___% can lead to ___%. Rules of Thumb: ___% of customers can lead to ___% of sales; ___% can lead to ___%. Salesperson must be a business manager: Salesperson must be a business manager: –Be able to customize products/services –Knowledgeable about strategic objectives –Can build and implement a business plan

12. National/Key Accounts II Major account management has dual goals: Major account management has dual goals: –Making _____ –Developing long term __________with major customers Larger share of customer leads to larger _____. Larger share of customer leads to larger _____. But: But: –Major accounts often need detailed and sophisticated treatment. –Need more experienced, expert salespeople with greater authority. Commission may lead to conflict.

13. National/Key Accounts III Assign key accounts to top sales executives Assign key accounts to top sales executives Create separate corporate division Create separate corporate division Create separate sales force Create separate sales force

14. National/Key Accounts IV Smaller firms don’t have resources for separate division or sales forces. Smaller firms don’t have resources for separate division or sales forces. They have relatively few major accounts They have relatively few major accounts Salesperson must be high enough in the organization to make/influence decisions. Salesperson must be high enough in the organization to make/influence decisions. Takes time from managerial responsibilities. Takes time from managerial responsibilities.

15. National/Key Accounts V When few customers account for a large percentage of sales: can coordinate manufacturing, logistics, marketing and sales. When few customers account for a large percentage of sales: can coordinate manufacturing, logistics, marketing and sales. But there is often a duplication of efforts and added sales expenses. But there is often a duplication of efforts and added sales expenses.

16. National/Key Accounts VI Treat major account executives like: Treat major account executives like: –Regional sales managers –District managers –Vice presidents Advantages : Advantages : –Know ______better, can ______ better –Often viewed as promotion, can assign best people Disadvantages : Disadvantages : –Duplication of ______ –______

17. Team Selling Response to more complex relationship with customer: Stronger knowledge, better service Response to more complex relationship with customer: Stronger knowledge, better service Get different expertise from multiple organizational functions Get different expertise from multiple organizational functions High costs: time and personnel High costs: time and personnel Complicated: coordination, motivation, compensation Complicated: coordination, motivation, compensation

18. Multi-level Selling Teams call on corresponding management levels at the customer’s office. Teams call on corresponding management levels at the customer’s office. –VP to VP –Engineer to Engineer –Technician to Technician

19. Co-Marketing Alliances Teams from multiple organizations work together to sell complex products or systems. Teams from multiple organizations work together to sell complex products or systems. Capitalize on each member’s competencies (technical knowledge, sales force) Capitalize on each member’s competencies (technical knowledge, sales force)

20. Logistical Alliances and Computerized Ordering Direct and often automatic reordering (e.g. ______) Direct and often automatic reordering (e.g. ______) Easier for customer Easier for customer Creates ______ tied relationship Creates ______ tied relationship Frees sales force up to sell to new customers, or new products to existing customers. Frees sales force up to sell to new customers, or new products to existing customers.

21. Global Sales Structure Same basic issues: Same basic issues: –Own sales force vs. agent –If own people, what structure? Decision factors more complicated due to distance, customs, legal/political considerations. Decision factors more complicated due to distance, customs, legal/political considerations.

22. Vertical Structure I Should Sales be integrated within the Marketing Department as it seems to be in over ¾ of companies responding to survey? Should Sales be integrated within the Marketing Department as it seems to be in over ¾ of companies responding to survey? Should it be a separate unit as it is in about 20% of the responding companies? Should it be a separate unit as it is in about 20% of the responding companies?

23. Vertical Structure II Number of Management Levels vs. Span of Control Number of Management Levels vs. Span of Control –How many levels to have? –How many ______ should each manager supervise? –Fewer levels »Facilitates ______ »Lowers ______ costs »Lowers ______ : less effectiveness and productivity

24. Vertical Structure III Reduce span of control if: Reduce span of control if: –Sales task is ______ –Profit impact of each salesperson’s performance is ______ –Salespeople are ______ ______ and ______

25. Vertical Structure IV Where should authority reside? Where should authority reside? –Hiring, Firing, Evaluation Selling and Managerial Responsibilities? Selling and Managerial Responsibilities? –Most spend about 1/3 of time on sales (vs. mgmt) –They want commission rewards –Usually needed on key accounts, especially for their sales ability Should Sales Manager control sales-related activities? Should Sales Manager control sales-related activities? –Installation, maintenance, order processing, delivery –Usually not credit: conflict and awkward

26. Vertical Structure V Technology may change sales management issues as much as it has sales person issues. Cell phones, computers, etc. Technology may change sales management issues as much as it has sales person issues. Cell phones, computers, etc. Quality time? Staff Support vs. Outsourcing Staff Support vs. Outsourcing –Specialized knowledge –Most common: recruiting, training, sales analysis (Research?)