Lecture Dalrymple''s sales management: Concepts and cases – Chapter 6: Sales force organization

Chapter 6 - Sales force organization. This chapter presents the following content: Sales force organization, strategic account programs, product specialist organization, customer specialist organization,...

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 6­1:  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% 18% Today In Five Years 45% 24% 20% 17% 16% 11% Customer Generalist Product  Lines Functional Figure 6­2:  How Sales Forces are Organized Sales Force Organization: Generalist National Sales Manager Central Regional Sales Manager Eastern Regional Sales Manager Western Regional Sales Manager Northeast District  Sales Manager Mid­Atlantic District  Sales Manager Southern District  Sales Manager Connecticut Rhode Island Maine Vermont New York Massachus etts New York New Jersey Pennsy­ lvania North  Carolina South  Carolina Delaware District of  Columbia Georgia Alabama Virginia Maryland Mississippi Florida Figure 6­3:  Geographical Sales Organization Sales Force Organization:  Product Specialists National Sales Manager Eastern Regional Sales Manager Northeast District  Sales Manager Printer Equipment Salesperson Server  Salesperson Mid­Atlantic District  Sales Manager Minicomputer  Salesperson Programmable Calculator Salesperson Southern District  Sales Manager Copier Salesperson Figure 6­4:  Product Specialized Sales Force Large  Computer Salesperson 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 Northeast District  Sales Manager Salesperson For Educational  Institutions Manager of Export Sales Eastern Regional Sales Manager Mid­Atlantic District  Sales Manager Salesperson for  Retail Customers Salesperson for  Manufacturers Southern District  Sales Manager Salesperson for  Government  Agencies Salesperson for  Bank Customers Salesperson for  Wholesale  Customers Figure 6­5:  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 Account Executives  (Salespeople) Systems Manager Administrative Manager System Reps Market Administrative (Technical Support) (Training & Installation) Figure 6­6:  Functional Specialization Organizational  Structure Advantages Disadvantages Generalist  (Geographic) •Low cost •No geographic overlap •No customer overlap •Limited product line knowledge •Limited customer knowledge •Lack of management control over  product or customer emphasis Product •Product knowledge •Control over product emphasis •Low geographic efficiency •Customer duplication •Geographic duplication Customer •Deeper customer knowledge •Control over customer emphasis •High cost •Less product knowledge •More geographic duplication •Difficult coordination with product  managers Functional •Effectiveness in performing  selling activities •Coordination •Geographic duplication •Customer duplication Figure 6­7: Comparing Sales Organization Structures Strategic Accounts: What is Different about Strategic Accounts? Previous Approach Bsiness Plan  Duration 3 – 6 months Tactical  Structure of  Business Plan promotional  program Personnel  Involvement Sales reps and  purchasing agents New Strategic Account 2 – 3 years Strategic business plan focused on  growth and  profitability Senior management  from both companies Figure 6­8 : 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 Telemarketing Sales calls per day 25 Sales calls per quarter 325 1,624 Sales calls per year 1,300 6,500 Salespeople required 6.5 1.2 Cost per sales call $250 $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 Companies provide customers provide  customers with a number they can call if  they have questions Prospecting and  Lead Qualification Firms are taking a proactive approach to  prospecting by having telemarketers call  prospects or qualify them for face­to­face  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 Account  Management Promotion Support Figure 6­9:  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 Sales Force Organization: Economic Analysis of Sales Agents Independent Agents Total Selling Costs Own Sales Force Break­Even Sales Sales Volume Figure 6­10:  Total Costs of Independent Agents vs. Own Sales Force Sales Force Organization: Market Conditions Favoring Sales Agents  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  The company is not well known  and has little equity in the  market  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 Figure 6­11:  Market Factors Favoring the Use of Sales Agents Customer Awareness Brand Awareness Brand Consideration Marketing Brand Preference Handoff Purchase Intent Purchase Sales Customer Loyalty Customer Advocacy Figure 6­12: The Marketing­Sales 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 6­13: Sales Team Organization at Ericsson ... Figure 6­2:  How? ?Sales? ?Forces are Organized Sales? ?Force? ?Organization:  Generalist National? ?Sales Manager Central Regional Sales? ?Manager Eastern Regional Sales? ?Manager Western Regional Sales? ?Manager... Maryland Mississippi Florida Figure 6­3:  Geographical? ?Sales? ?Organization Sales? ?Force? ?Organization:   Product Specialists National? ?Sales Manager Eastern Regional Sales? ?Manager Northeast District  Sales? ?Manager... Acceptance by field salespeople  Management  Role of the Internet Sales? ?Force? ?Organization: Economic Analysis of? ?Sales? ?Agents Independent Agents Total Selling Costs Own? ?Sales? ?Force Break­Even? ?Sales Sales Volume