the sales organization
DESCRIPTION
Variations in Selling Organizational Structure. The Sales Organization. Marketing 3345. Fundamental Principles. Sales Force Specialization. Sales Force Alternatives. Sales Force Size. Emerging Issues. Fundamental Organization Principles. - PowerPoint PPT PresentationTRANSCRIPT
The Sales OrganizationThe Sales Organization
Variations in Selling
Organizational Structure
Marketing 3345
FundamentalPrinciples
Sales ForceSpecialization
Sales ForceAlternatives
Sales ForceSize
EmergingIssues
Fundamental Organization Principles
Unity of Command Each person should report to only one boss. A clear and unbroken chain of command should link every person in an organization with someone a level higher.
Stability and Continuity Activities should be assigned without
regard for the talents and preferences of current employees.
Coordination and Activities of salespeople should be Integration integrated with customer needs,
coordinated with activities of other departments, and coordinated with tasks of all salespeople.
Geographical Sales Organization
Connecticutand Rhode
IslandMaine
Vermont New York
Massachusetts
New York
NortheastDistrict
Sales Manager
CentralRegional
Sales Manager
NewJersey
Pennsy-lvania
Delaware District ofColumbia
Virginia Maryland
Mid-AtlanticDistrict
Sales Manager
EasternRegional
Sales Manager
NorthCarolina
SouthCarolina
Georgia Alabama
Mississippi Florida
SouthernDistrict
Sales Manager
WesternRegional
Sales Manager
NationalSales Manager
Organization:Geographical Organizations
Organization:Geographical Organizations
• Advantages
– Tends to achieve lowest costs
– Travel time and expenses are minimized
– Sales Administration and overhead costs are
kept low
• Disadvantages
– It does not provide any benefits associated with
specialization of labor
Product Specialized Sales Force
NortheastDistrict
Sales Manager
DictationEquipment
Salesperson
TypewriterSalesperson
MinicomputerSalesperson
ProgrammableCalculator
Salesperson
CopierSalesperson
LargeComputer
Salesperson
Mid-AtlanticDistrict
Sales Manager
SouthernDistrict
Sales Manager
EasternRegional
Sales Manager
NationalSales Manager
Organization:Product Specialization
Organization:Product Specialization
• 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
Customer Specialized Sales Force
NationalAccountsManager
NortheastDistrict
Sales Manager
Salespersonfor Educational Institutions
Salespersonfor Manufacturers
Salespersonfor Retail
Customers
Salespersonfor Government
Agencies
Salespersonfor Wholesale
Customers
Salespersonfor Bank
Customers
Mid-AtlanticDistrict
Sales Manager
SouthernDistrict
Sales Manager
EasternRegional
Sales Manager
Managerof
Export Sales
NationalSales Manager
Organization: Customer Specialization
Organization: Customer Specialization
• Advantages
– Consistent with market driven strategy
– Salespeople become customer experts
• Disadvantages
– More expensive
Functional Specialization
Account Executives(salespeople)
Industry SalesManagers
Systems reps(technical support)
SystemsManager
MarketAdministration
(training and installation)
AdministrativeManager
Division MarketingManager
Organization:Functional Specialization
Organization:Functional Specialization
Focus on phases in customer relationship:
• Initial sales
• Follow-up technical support and service
• Promotion efforts specialist
WHO ARE STRATEGIC ACCOUNTS?WHO ARE STRATEGIC ACCOUNTS?
• WHEN A CUSTOMER PURCHASES A SIGNIFICANT VOLUME AND EXHIBITS ONE OR A COMBINATION OF THE FOLLOWING:
• MULTIPLE PEOPLE ARE INVOLVED IN THE BUYING PROCESS
• PURCHASING IS CENTRALIZED
• THE CUSTOMER DESRIES A LONG-TERM, COOPERATIVE WORKING RELATIONSHIP
• THE CUSTOMER EXPECTS SPECIALIZED ATTENTION AND SERVICE
• WHEN A CUSTOMER PURCHASES A SIGNIFICANT VOLUME AND EXHIBITS ONE OR A COMBINATION OF THE FOLLOWING:
• MULTIPLE PEOPLE ARE INVOLVED IN THE BUYING PROCESS
• PURCHASING IS CENTRALIZED
• THE CUSTOMER DESRIES A LONG-TERM, COOPERATIVE WORKING RELATIONSHIP
• THE CUSTOMER EXPECTS SPECIALIZED ATTENTION AND SERVICE
OrganizationOrganization
Strategic Account Organization Alternatives• 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
BENEFITS OF STRATEGIC ACCOUNTMARKETING
BENEFITS OF STRATEGIC ACCOUNTMARKETING
30%
74%
74%
83%
91%Increased sale tonational accounts
Increased profitsfrom nationalaccounts
Increased marketshare
Improved customercommunications
Improved customercoordination
Survey Results: Strategic Account Management
Survey Results: Strategic Account Management
37%
37%
26%
Provide no training for strategic account managers
Different training for strategic account managers
No difference in training for strategic account managers or other sales staff
37%
26%
37%
Are training programs for the strategic account manager different?
Survey Results: Strategic Account Management
Survey Results: Strategic Account Management
Yes
No
No Response
29%
3%
68%
Do your strategic account managers carry an assigned sales quota?
29%
3%
68%
Survey Results: Strategic Account Management
Survey Results: Strategic Account Management
No formal authority over others in the sales organization
Sales team reports directly to the strategic account manager
May assemble temporary “virtual” sales teams that report directly to the strategic account manager
No Response
24%
22%
47%
Do strategic account managers have formal authority over the rest of the sales organization?
7%
47% 24%7%
22%
Survey Results: Strategic Account Management
Survey Results: Strategic Account Management
How do you measure the success of a strategic account program?
Sales volume
Customer satisfaction
Profitability
Volume of recurring revenue stream
Incremental orders from existing accountsNumber of customer with strategic account agreements
Number of transactions/orders
Number of products shipped
80%
53%
45%
29%
22%
11%
6% 6%
Table 8-2: Ranking of Customers’ Wants
1980 1990 2000
Contact with outside salesperson 1 3 8Frequency and speed of delivery 2 1 2Price 3 2 4Range of Available Products 4 5 3Capable inside salesperson 5 4 1
SCOPE OF TELEMARKETING’S ROLE
SCOPE OF TELEMARKETING’S ROLE
• Customer Service
• Prospecting and Lead Qualification
• Sales Support
• Advertising and Promotion
Doing the Math on Account Management
Field Rep Telemarketing
Sales calls per day 5 25Sales calls per quarter 325 1624Sales calls per year 1300 6500Salespeople required 6.5 1.2Cost per sales call $250 $15Cost per year $1,998,750 $117,000
MAJOR BENEFITS OF TELEMARKETINGMAJOR BENEFITS OF TELEMARKETING
Percent of Respondents
CUSTOMER BENEFIT 65.2%•Speed of communication to customer 21.5•Timeliness of contact 14.2•Ease/Convenience to customer 10.8•Customer relations 10.2•Frequency of contact 8.5
COST EFFECTIVE 43.7DIRECT CONTROL 1.4MARKETING RESEARCH 4.8PROVIDE TECHNICAL SUPPORT 1.1
Organization: TelemarketingOrganization: Telemarketing
Advantages• Low cost per sales call
• Profitably serve small to medium customers
• Speed/time saving of telephone ordering
Challenges• Acceptance by field salespeople
• Hiring, motivating & retaining good telemarketers
Five Years Ago
Today
Five Years from Now
TelemarketersAverage Number per Company
21.9921.99
28.1128.11
36.4936.49
Five years Ago
Today
Five years from Now 59.6659.66
53.0753.07
41.6441.64
Field SalespeopleAverage Number per Company
+27.9%
+29.9%
+27.5%
+12.5%
Source: Geri Gantman, “Exclusive Survey,” Business Marketing, (September, 2007), p. 64. 353 companies in survey.
PROJECTED GROWTH IN SALESPEOPLEAND TELEMARKETERS
PROJECTED GROWTH IN SALESPEOPLEAND TELEMARKETERS
Face-to-Face
Selling(FTF)
FTF FTF
FTF
FTF FTF
FTF FTF
TM
Stage in Selling Process
Prospect/ Present/ Service/Qualify Close Reorder
AccountSize
Large
Medium
Small
EVOLUTION OF SELLING METHODSOLD
EVOLUTION OF SELLING METHODSOLD
NationalAccountManage-
ment(NAM)
NAM NAM
Telemar-keting(TM)
TM TM
FTFFTF&
TM
TM
Stage in Selling Process
Prospect/ Present/ Service/Qualify Close Reorder
AccountSize
Large
Medium
Small
EVOLUTION OF SELLING METHODSNEW
EVOLUTION OF SELLING METHODSNEW
Total Costs of Independent Agents vs. Own Sales Force
Independentagents
Own sales force
Break-evensales
Tot
al s
elli
ng
cost
s
Sales volume
HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
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
• Six Cs of Finding the Right Mnfr Rep– Compatible Lines– Compatible Territories– Compatible Customers– Credibility of the Rep– Capabilities– Credit Worthiness
HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
HIRING INDEPENDENT AGENTS DEVELOPING THE “IDEAL” AGENT PROFILE
Introduction
Disengagement Decision Re-engagement
Decision
Manufacturer Re-employs Rep firm to lower fixed sales costs
Agent Decision and the Product Life Cycle
Agent Decision and the Product Life Cycle
Re - OrganizationRe - 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 org must work in harmony