What is Customer sales force structure?

The face of any organization is the sales force. Companies spend a considerable amount of time and money on sales force rather than on any other promotional activity. However, sales force is expensive and companies are looking forward to managing them in an efficient and effective manner.

Designing of the Sales Force

Sales force is linking between companies and customer. Therefore, companies have to be careful in designing and structuring sales force.

1. The first step is setting out an objective for sales force. Earlier companies had a single objective increasing sale making it objective also for sales people. Sales people are asked to perform a search for prospective clients or lead. Sales people are asked to balance time between a prospective customer and current customer. Effective communication of product and services is essential to close the deal. Sales people also play an important role in after sales service and can make a difference for the company. Sales people are eyes and ears of the company in the market gathering information about competition and customer changing demands.
2. The second step is use sales people strategically. Sales people have to combine efforts with other team members to achieve the objective. Sales people should be aware how to analyze market data been provided and convert them into marketing strategies.
3. The third step is deciding the structure of the sales force. The structure of the sales is dependent on the strategy followed by the company. Common sales force structures are as follows:-
• Territorial structure is used where every sales representative is assigned specific geographical area. This structure is preferred for building relationships with locals.
• Product structure is used for complex and un- related product portfolio. Here the sales people are directly associated with research and development of the products.
• Market structure is used if the companies are operating different industry or market segments. Every sales force specializes in a definite market and helps push a product efficiently across the given market. However, the disadvantage would arise if customers are located over a wide geographical area.
• Complex structure is used when companies are in business of selling complex product to different customer across a large geographical area. Here sales force structure is a combination of other structures discussed.

Once the structure is designed companies need to make a decision with respect to the size of the sales force. The size of the sales force is dependent on the market size and number of customers.

4. The next step is to design compensation for the sales force. Compensation plays a big motivational factor for sales people. Companies follow a structure of a fixed amount plus a variable amount depending of success achieved in the market. Allowances play an important factor in the salary owing to continuous travel and market visits.

Managing Sales Force

Integral part for success of marketing strategy is management of the sales force. The management of sales consists of following:-

Recruitment is at the centre of an effective sales force. One approach in the selection is asking a customer what characteristics they look for in a sales representative. Companies develop selection procedure where behavioral and management skills are tested.

Training is essential to remain ahead of the competition. Sales force needs training before entering the market as well as training at different stage of the product life cycle.

Supervision on sales force is decided on the profile of product portfolio. A general supervision is maintained with respect to sales people dealing with potential clients. Another supervision is related to efficient time management from preparation of client call to closing of the deal.

Motivation is a key aspect for management of the sales force. Here compensation plays an important in driving up the motivational level. Compensation can be assigned based on sales quota. Other motivational tools are social gathering and family outing.

Evaluation is essential to management of a sales force. Sales reports sent by the sales force serve a good starting point of evaluation.

Art of negotiation and relationship marketing these two are the important aspects of successful sales representative and long term benefit for the company.

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The structure of a sales force has significant bearing on its success. For example, a rep used to selling to a given region might flounder when asked to concentrate on just one industry nationwide. If each of your company's products require deep and specific technical knowledge, it might not make sense to have reps sell all products by territory.

It's simply not true that sales talent translates into all situations. Take a software representative who sells exclusively to manufacturing companies, and ask them to start selling hardware across all verticals. They're probably not going to be as good at one of these assignments as the other. Salespeople who excel get very good at excelling in a particular environment, and organizational structure is the bedrock of that environment.

Sales Organization Structure

Sales organization structure refers to the design of the sales team. Businesses may use an inside or outside sales model, geographic or industry territory approach, product model (split by product line or type), SMB/mid-market/Enterprise split, or some combination of the above.

In his book Aligning Strategy and Sales, Frank V. Cespedes, senior lecturer of business administration at Harvard Business School, explains in depth how organizational design impacts selling effectiveness, and emphasizes the importance of choosing a structure carefully. In the chart below, he lays out the pros and cons of four commonly used structures. Accounts and opportunities can be divided by:

• Geography/territory
• Product/service line
• Customer/account size
• Industry/vertical segment

Take a look, and then think about whether a reorg is in order.

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Sales Team Structures

Geography/Territory Org Structure

Organizing your sales team by geography or territory allows each salesperson to develop familiarity with a specific geographic location. They can build rapport with local businesses, get to know regional competitors, and track target accounts.

It can also be easier to evaluate your reps by taking into account the performance and market potential of a specific geographic location. One consideration of geography and territory org structure is that it can lead to sales reps working in silos, inhibiting their ability to develop cross-functional expertise.

Product/Service Line Org Structure

If your company sells several different products or services, it can help to align salespeople to those products and services. Similar to geographical expertise, it allows your reps to become the expert on a specific product you sell, thereby better able to communicate its value and use case for individual clients.

A potential downside of implementing this structure is that reps may focus more on the features of the products they are selling, and not the best solution for the customer.

Customer/Account Size Org Structure

Organizing your sales org by account size is another popular structure. The skills a rep needs to sell to an SMB are different than those of selling to an enterprise account.

These businesses have different goals, will ask different questions, and have very different budgets. By allowing reps to become familiar with the intricacies of these accounts, you'll better meet the needs of the customer and your reps.

With this org structure, teams should be aware that it may be more difficult to manage resources. To be successful, this structure requires constant communication with team members to ensure all clients receive the same quality of service.

Industry/Vertical Org Structure

Different industries will use your product/service in different ways. Make sure your reps are well-versed in how to position your offering to these various verticals by organizing your sales team accordingly.

This can be one of the most expensive ways to structure a sales team.

Sales Organization Chart

Here's an example sales organization chart. This can be modified depending on which organizational structure you choose (i.e., by geography/territory, product/service line, customer/account size, or industry/vertical segment).

Source: Lucidchart

Having a clearly defined visual representation of how your sales team is organized can help teams work well together, make communication more efficient, and help other departments identify exactly who to reach out to for better alignment.

Looking for more? Check out the difference between sales and business development next.

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