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SALES FORCE ORGANIZATION

An ‘Organization’ is a working
structure of Activities involving a
group of people
• GOAL of an ‘Organization’ is to
arrange the activities such that people
involved can act better ‘together’ than
they can ‘individually’
Principles of Organizational Design
• Organization structure should reflect a
marketing orientation
• Organization should be built around
activities, not around people
• Responsibility & authority should be
related properly
• Span of executive control should be
reasonable
• Organization should be stable but flexible
• Activities should be balanced &
Coordinated
Informal Organization

• ‘Informal structure’ represents how


things get done actually, as against
how they are supposed to get done
as per formal structure
Organization Planning

• Most problems of Sales Organization


are problems of ‘re-organization’.
Hence, Organizational Planning is a
continuing activity
Setting up a Sales Organization
1. Defining the Objectives
2. Delineating the necessary
Activities
3. Grouping Activities into ‘Jobs’ or
‘Positions’
4. Assigning personnel to positions
5. Providing for coordination &
control
Defining Objectives
3 General Objectives of Business delegated to
Sales Management
• Sales Volume

• Contribution to Profits

• Continuing Growth
Delineating necessary Activities

• Determine individual Activities


necessary to achieve Sales
Department’s Qualitative, as well
as, Quantitative Objectives

• Estimate the Volume of each


Activity
Grouping the ‘Activities’
• closely related tasks are assigned to the
same ‘position’
• Each ‘position’ to have not only sufficient
tasks; also sufficient variation to provide
for job challenges, interest, involvement
• Certain crucial activities (eg: Pricing or
Merchandising ) are assigned to higher
levels in the hierarchy
Assigning People
…. Whether to recruit special
individuals to fill positions, or to
modify the positions to fit capabilities
of available personnel?;
Coordination & Control
• Job responsibilities of Executives &
above should permit enough time for
coordination

• Reasonable ‘Span of Control’


Basic Types of Organizations

• Line Organization

• Line-and-Staff Organization

• Functional Organization

• Horizontal Organization
Line Sales Organization

Chief Marketing Executive

Marketing General Sales Customer


Advertising
Research Sales Promotion Relations
Manager
Manager Manager Manager Manager

Sales Manager Sales Manager Sales Manager


Product A Product B Product C

Asst. Sales Asst. Sales Asst. Sales


Manager A Manager B Manager C

Salespeople Salespeople Salespeople


Line-&-Staff Sales Organization

Chief Marketing Executive

Marketing General Sales Sales


Advertising
Research Sales Promotion Analysis
Manager
Manager Manager Manager Manager

Salespeople
Line Authority

Staff advisory
Authority
Functional Sales Organization

Chief Marketing Executive

Advertising Marketing General Credit Sales


Manager Research Sales Manager Promotion
Manager Manager Manager

Assistant
Sales
Manager

Salespeople
The Horizontal Corporation
Product Design &
Development Team Manufacturing Team
Customer Research Systems Engg
Customer Analysis Production
Design Engg Quality Control

Strategic Planning Team


VO Strategic Planning
VP Finance & Information
COO
Human Resources
Administration

Customer Support Customer


Team Fulfillment Team
Information,Training Pricing & Promotion
Service,Research Sales
Distribution
Specialization within Sales Dept

• Geographic Specialization

• Type of Product

• Market-based divisions

• Type of Customer
Geographical Sales Organization

Chief Marketing Executive

Marketing General Sales


Advertising Sales
Research Sales Promotion
Manager Analyst
Manager Manager Manager

Western Regional Eastern Regional


Sales Manager Sales Manager

District District
Sales Managers Sales Managers

Salespeople each Salespeople each


with own territory with own territory
Sales Organization with
Product-specialized Sales Force
Chief Marketing Executive

Marketing General Sales Customer


Advertising
Research Sales Promotion Relations
Manager
Manager Manager Manager Manager

Sales Manager Sales Manager Sales Manager


Product A Product B Product C

Salespeople Salespeople Salespeople


Product A Product B Product C
Sales Organization with Product
Managers as Staff Specialists
Chief Marketing Executive

Advertising Marketing General Manager Manager


Manager
Manager Research Sales Product B Product C
Product A
Manager Manager

Assistant
Sales
Manager

Salespeople
Sales Organization specialized by
Type of Customer
Chief Marketing Executive

General Sales Director


Advertising Sales Promotion Marketing
Manager Manager Manager Research

Sales Manager Sales Manager


Sales Manager
Transportation Petroleum Industry
Steel Industry
industry

Salespeople Salespeople Salespeople


Strategic Organizational Alternatives
Strategic
Account Management

Organizational
Independent E-commerce &
Options for
reps Tele-marketing
the 2000s

Team
Selling
Strategic Account Management
• Factors contributing to Complexity:
– Different geographical locations involved in
buying process
– Different functional people involved
– Price concessions, customized products,
special services, etc may be demanded
– Salespeople from different areas may be
inter-facing with one customer
– Similar conditions on part of Seller also
Strategic Account Management
3 commonly used organizational
approaches:

• Creating a separate Sales Force

• Using Executives

• Creating a separate Division


‘Buying Centre’ & Team Selling
Buying Centre includes:
• Users
• Influencers, who set the specifications
• Deciders, who make the actual purchasing
decision
• Gatekeepers, who control the flow of
purchasing information
• Buyers, who process the purchase
The Relationship Between A
Sales Team and a Buying Center
Organizational Sales- Exchange Purchasing Organizational
selling center person Process Agent buying center

Marketing Information
Purchasing
Sales Problem Solving
Manufacturing
Manufacturing Negotiation
Friendship, Trust R&D
R&D
Engineering Product/Services Engineering
Payment
Physical Marketing
Distribution Reciprocity
Captive versus independent sales rep

$ Cost
Independent rep

Captive rep

$ Sales
Uses of Telemarketing
• Identify prospective customers
• Screening, qualifying leads
• Sales solicitation: small customers,
re-orders
• Order processing
• Product service support
• Account management
• Customer relations
• Competitive reporting
• Expense reporting
STAFFING
Selecting the ‘right’ people

…the selection of personnel at


any level in an organization, is
the most important activity in
the management process
Importance of Good Selection
• Qualified Salespeople are scarce
• Good selection improves sales
force performance
• Good selection promotes cost
savings
• Good selection eases other
managerial tasks
• Sales Managers are no better
Selecting people who
turn out to be
successful remains
one of the greatest
challenges in Sales
Management today
Activities involved in Staffing
• Plan – recruiting & selection

• Recruit – adequate no. of applicants

• Select – most qualified

• Hire – the selected

• Assimilate – the newly hired


Sales Force Staffing Process:
Plan for Recruiting & Selection
Establish Conduct Determine
Responsibility Job Hiring
for Recruiting, Analysis Qualifications
Selection and
Assimilation
Prepare Job
Determine
Number of Description
People
Wanted
Plan for Recruiting & Selection…
• Establish responsibility for Recruiting,
Selection & Assimilation:

• Who makes decisions for Recruiting /


Selection & who for assimilation, depends
on the size of the firm & nature of selling
task
..Plan for Recruiting & Selection…

• In a small firm, where sales force size


could be small, either the VP-Sales or
even the President could be making
decisions regarding recruitment, selection
and even assimilation;
• In big companies, the main leg work is
done by the HR department, while the
crucial decisions of final selection are
taken by the Sales Manager.
..Plan for Recruiting & Selection…
• Determine the number of people wanted:
• Don’t play safe by hiring more than
needed;
• Forecasting well in advance forces sales
units to plan systematically;
Workload Analysis
Number of reps needed = Total workload in market
Workload one rep can handle
Market workload:
Customer Number of Calls Total
x =
class accounts per year calls
A 400 20 8,000
B 600 10 6,000
= 14,000
One rep’s workload :
Calls/day x Selling days/week x Working weeks/year = Annual workload
5 x 5 x 50 = 1250

Number of reps needed


14,000
= = 11.2 reps
1250
Develop profile

• Job Analysis
– Specific tasks to be performed
– Which activities are critical for success

• Job Description
• Job/Hiring Qualifications
Content of Job Description
• Title
• Nature of the product or service to be sold
• Type of customers to be called on, frequency of
calls, and types of personnel to be contacted
• Specific tasks and responsibilities to be carried out
• Organizational relationships
• Mental and physical demands of the job
• Environmental pressures & constraints that might
affect the job
Plan for Recruiting & Selection
Generally Desirable Trait Related Ability
Ego strength To handle rejection
Sense of urgency To complete the sale
Ego drive To persuade people
Assertiveness To be firm in negotiations
Willingness to take risks To be innovative
Sociability To build relationships
Abstract reasoning To sell ideas
Sense of skepticism To question, to be alert
Creativity To sell complex products & ideas
Empathy To understand customer needs
Recruiting for the Team
• In today’s re-engineered business
environment, companies seek
salespeople who are ‘adaptable’ &
show selfless behaviour
•Willingness to share
• Cooperative Trusting
• Empathetic Accepting of others
• Receptive to others ideas
• Selflessness Leadership skills
Sales Force Staffing Process:
Plan for Recruiting & Selection
Establish Responsibility Determine Conduct Job Prepare Job Determine Hiring
for Recruiting, Selection Number of Analysis Description Qualifications
and Assimilation People Wanted

Recruit Applicants
RECRUTING includes all
activities involved in securing
individuals (their co-
ordinates) for the position to
be filled
(concept does not include actual
selection of people)
RECRUITING
• Need for many recruits: only a small % get finally
hired
• Finding adequate no. of recruits may not be
easy;
• Companies need to find & maintain good
recruiting sources:
• Referrals Current Employees
• Other companies Internet
• Educational institutions Advertisements
• Agencies Part-time workers
RECRUITING SOURCES
Other Companies:
Current Competitors
Referrals
employees Customers
Others

Employment Recruiting Part-time


Agencies Sources Workers

Educational Advertise-
Internet
Institutions ments
Sales Force Staffing Process:
Plan for Recruiting & Selection
Establish Responsibility Determine Conduct Job Prepare Job Determine Hiring
for Recruiting, Selection Number of Analysis Description Qualifications
and Assimilation People Wanted

Recruit Applicants
Select
Applicants
Design a System Measure Applicants Make Selection
For Measuring Against Hiring Decisions
Applicants Qualifications
SELECTION

• SELECTION TOOLS:
– Application Blanks
– Personal Interviews
– Psychological Tests
– References & Credit reports
– Assessment Centres
The Job-Offer Decision
Review:
• Qualifications & Potential of Applicant;
• What Applicants want, & what Company
can offer them (all hopes & ambitions of
each applicant as against opportunities &
rewards offered by the company);
• Detailed Impressions that Applicants have
made;
The Job-Offer Decision
• Develop 2 lists of Recruits:
– In order of Company’s preference for them
– In order of Recruit’s preference for co.
• Decide on the candidates for Offer,
considering both above lists
• Company should ensure that they
communicate decision also to candidates
not selected by them
Sales Force Staffing Process:
Plan for Recruiting & Selection
Establish Responsibility Determine Conduct Job Prepare Job Determine Hiring
for Recruiting, Selection Number of Analysis Description Qualifications
and Assimilation People Wanted

Recruit Applicants
Select
Applicants
Design a System Measure Applicants Make Selection
For Measuring Against Hiring Decisions
Applicants Qualifications

Hire The People

Assimilate New People Into Sales Force


Sales Force Staffing Process:
Plan for Recruiting & Selection
Establish Responsibility Determine Conduct Job Prepare Job Determine Hiring
for Recruiting, Selection Number of Analysis Description Qualifications
and Assimilation People Wanted

Recruit Applicants
Select
Applicants
Design a System Measure Applicants Make Selection
For Measuring Against Hiring Decisions
Applicants Qualifications

Hire The People

Assimilate New People Into Sales Force


The Hiring
1. Extending the Offer
2. What will be included in offer
3. How will offer be extended
4. Pre-entry Socialization
5. Assimilation on New Hires
I. Relationships
II. Mentoring New Employees
Sales Force Staffing Process: Plan for Recruiting & Selection
Establish Responsibility Determine
Number of Conduct Job Prepare Job Determine Hiring
for Recruiting, Selection Analysis Description Qualifications
and Assimilation People Wanted

Recruit Applicants

Design a
Select Applicants
System For
Measure Applicants
Measuring Make Selection
Against Hiring
Applicants Decisions
Qualifications

Hire The People

Assimilate New People Into Sales Force


Socialization & Assimilation
• Socialization is the process through
which new recruits imbibe values &
attitudes of people already working
for the organization;
• Assimilation:
– Begins when recruits accept position;
– Learn how to perform tasks associated
with their jobs, get familiar with people
with whom they will interact
Recruiting and Selection Problems
• Lack of resources
• Lack of job specification and
qualifications
• Qualifications not objectively
established
• Lack of managerial training
• Personal prejudices
• Search for managerial talent