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Part IIIPart III
SALES FORCE SALES FORCE ACTIVITIESACTIVITIES
Part IIIPart III
SALES FORCE SALES FORCE ACTIVITIESACTIVITIES
Chapter 6:
Sales Force Organization
Figure 6-1: Decisions Affected by Sales Force OrganizationFigure 6-1: Decisions Affected by Sales Force Organization
Structure
Performance Evaluation
Compensation
TrainingProgram
Recruiting/Selection
SalesManagement
Role
Sales Force Organization: Sales Force Organization: ImpactImpact
Sales Force Organization: Sales Force Organization: TopicsTopics
Sales ForceSales Force
SpecializatioSpecializationn
Strategic Strategic
AccountAccount
ManagementManagement
TelemarketinTelemarketingg
IndependentIndependent
AgentsAgentsEmergingEmerging
IssuesIssues
Strategic Account Programs:Strategic Account Programs:Survey ResultsSurvey Results
18%18%
49%49%
20%20%
11%11%
45%45%
24%24%
17%17% 16%16%
TodayIn Five Years
Customer Generalist Product Lines
Functional
Figure 6-2: How Sales Forces are OrganizedFigure 6-2: How Sales Forces are Organized
Figure 6-3: Geographical Sales OrganizationFigure 6-3: Geographical Sales Organization
Eastern RegionalSales Manager
Sales Force Organization: Sales Force Organization: GeneralistGeneralist
MassachuMassachusettssetts
VermontVermont New YorkNew York
New YorkNew York
MaineMaineNew New
JerseyJersey
DelawareDelaware
VirginiaVirginia
ConnecticutConnecticutRhode Rhode IslandIsland
Pennsy-Pennsy-lvanialvania
District of District of ColumbiaColumbia
MarylandMaryland
North North CarolinaCarolina
GeorgiaGeorgia
MississipMississippipi
South South CarolinaCarolina
AlabamaAlabama
FloridaFlorida
National SalesManager
Western RegionalSales Manager
Central RegionalSales Manager
Northeast District Northeast District Sales ManagerSales Manager
Mid-Atlantic Mid-Atlantic District Sales District Sales
ManagerManager
Southern District Southern District Sales ManagerSales Manager
Figure 6-4: Product Specialized Sales Figure 6-4: Product Specialized Sales ForceForce
Sales Force Organization: Sales Force Organization: Product SpecialistsProduct Specialists
Eastern RegionalSales Manager
National SalesManager
Northeast District Northeast District Sales ManagerSales Manager
Southern District Southern District Sales ManagerSales Manager
PrinterPrinterEquipmentEquipmentSalespersoSalesperso
nn
Server Server SalespersoSalesperso
nn
MinicomputMinicomputer er
SalespersonSalesperson
ProgrammabProgrammablele
CalculatorCalculatorSalespersonSalesperson
CopierCopierSalespersoSalesperso
nn
Large Large ComputerComputer
SalespersonSalesperson
Mid-Atlantic Mid-Atlantic District Sales District Sales
ManagerManager
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
Product Specialist Product Specialist Organization: Organization: AnalysisAnalysis
Figure 6-5: Customer Specialized Sales Figure 6-5: Customer Specialized Sales ForceForce
Sales Force Organization: Sales Force Organization: Customer SpecialistsCustomer Specialists
Eastern RegionalSales Manager
National SalesManager
Northeast District Northeast District Sales ManagerSales Manager
Southern District Southern District Sales ManagerSales Manager
SalespersonSalespersonFor For
Educational Educational InstitutionsInstitutions
Salesperson Salesperson for for
ManufacturersManufacturers
Salesperson Salesperson for Retail for Retail
CustomersCustomers
Salesperson Salesperson for for
Government Government AgenciesAgencies
Salesperson Salesperson for Bank for Bank
CustomersCustomers
Mid-Atlantic Mid-Atlantic District Sales District Sales
ManagerManager
National AccountsManager
Manager ofExport Sales
Salesperson Salesperson for Wholesale for Wholesale
CustomersCustomers
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
Customer Specialist Customer Specialist Organization: Organization: AnalysisAnalysis
Figure 6-6: Functional Figure 6-6: Functional SpecializationSpecialization
Sales Force Organization: Sales Force Organization: Functional SpecialistsFunctional Specialists
DivisionMarketing Manager
SystemsManager
IndustrySales Manager
AdministrativeManager
System RepsSystem Reps(Technical Support)(Technical Support)
Account Account ExecutivesExecutives (Salespeople)(Salespeople)
MarketMarketAdministrativeAdministrative
(Training & Installation)(Training & Installation)
Figure 6-7: Comparing Sales Organization StructuresFigure 6-7: Comparing Sales Organization Structures
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 6-8 : Changes in Joint Account Figure 6-8 : Changes in Joint Account PlanningPlanning
Strategic Accounts:Strategic Accounts:What is Different about Strategic What is Different about Strategic Accounts?Accounts?
PreviousPreviousApproachApproach
New Strategic New Strategic AccountAccount
Bsiness Plan Duration
3 – 6 months
2 – 3 years
Structure of Business
Plan
Tactical promotional program
Strategic businessplan focused on
growth and profitability
Personnel Involvement
Sales reps and purchasing
agents
Senior management from both companies
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
Strategic Accounts:Strategic Accounts:Alternative Organization ModelsAlternative Organization Models
Table 6-1: Doing the Math on Account Management
Field Rep Telemarketing
Sales calls per day 5 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
ActivityActivity DescriptionDescription
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 face-to-face selling.
Account Management
Selling secondary product lines or service small customers by phone, thereby freeing their salespeople to concentrate on larger customers and strategic product lines.
Promotion Support
Develop newspaper and magazine ads that feature either a local or an 800 number to get additional product information or place an order.
Sales Force Organization:Sales Force Organization:Scope of TelemarketingScope of Telemarketing
Figure 6-9: The Scope of Telemarketing Figure 6-9: The Scope of Telemarketing ActivitiesActivities
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:Sales Force Organization:Telemarketing Advantages and Telemarketing Advantages and ChallengesChallenges
Figure 6-10: Total Costs of Independent Agents vs. Own Figure 6-10: Total Costs of Independent Agents vs. Own Sales ForceSales Force
IndependentAgents
Own Sales Force
Break-Even Sales
Sales VolumeSales Volume
Sales Force Organization:Sales Force Organization:Economic Analysis of Sales Economic Analysis of Sales AgentsAgents
TotalTotalSellingSelling
CostsCosts
Figure 6-11: Market Factors Favoring the Use of Sales Figure 6-11: Market Factors Favoring the Use of Sales AgentsAgents
Sales Force Organization:Sales Force Organization:Market Conditions Favoring Sales Market Conditions Favoring Sales AgentsAgents 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 6-12: The Marketing-Sales Figure 6-12: The Marketing-Sales HandoffHandoff
Marketing
Sales
Handoff
Customer Awareness
Brand Awareness
Brand Consideration
Brand Preference
Purchase Intent
Purchase
Customer Loyalty
Customer Advocacy
Country President
V.P. Business OperationsKey Account Team
Global AccountsDirector
DirectorProduct Support
Director ofOperations
Sales Director
AccountManagers
AccountCoordinators
Project Managers
Technical SupportEngineers
ProductManagers
AccountManagers
AccountCoordinators
Figure 6-13: Sales Team Organization at EricssonFigure 6-13: Sales Team Organization at Ericsson
Sales Force Organization:Sales Force Organization:Key Account Sales Teams at EricssonKey Account Sales Teams at Ericsson