Part III SALES FORCE ACTIVITIES

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Part IIISALES FORCE ACTIVITIES

• Chapter 6
• Sales Force Organization

2
Sales Force Organization Impact
Structure
Compensation
Sales Management Role
Performance Evaluation
Training Program
Recruiting/ Selection
Figure 6-1 Decisions Affected by Sales Force
Organization
3
Sales Force Organization Topics
4
Strategic Account Programs Survey Results
Today In Five Years
49
45
24
20
18
17
16
11
Figure 6-2 How Sales Forces are Organized
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Figure 6-3 Geographical Sales Organization
Sales Force Organization Generalist
National Sales Manager
Eastern Regional Sales Manager
Western Regional Sales Manager
Central Regional Sales Manager
Northeast District Sales Manager
Mid-Atlantic District Sales Manager
Southern District Sales Manager
Maine
Connecticut Rhode Island
New Jersey
Pennsy-lvania
North Carolina
South Carolina
New York
Vermont
Delaware
District of Columbia
Georgia
Alabama
New York
Massachusetts
Virginia
Maryland
Mississippi
Florida
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Figure 6-4 Product Specialized Sales Force
Sales Force Organization Product Specialists
National Sales Manager
Eastern Regional Sales Manager
Northeast District Sales Manager
Southern District Sales Manager
Mid-Atlantic District Sales Manager
Printer Equipment Salesperson
Server Salesperson
Minicomputer Salesperson
Programmable Calculator Salesperson
Copier Salesperson
Large Computer Salesperson
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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

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Figure 6-5 Customer Specialized Sales Force
Sales Force Organization Customer Specialists
National Sales Manager
National Accounts Manager
Manager of Export Sales
Eastern Regional Sales Manager
Northeast District Sales Manager
Southern District Sales Manager
Mid-Atlantic District Sales Manager
Salesperson For Educational Institutions
Salesperson for Retail Customers
Salesperson for Government Agencies
Salesperson for Bank Customers
Salesperson for Manufacturers
Salesperson for Wholesale Customers
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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

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Figure 6-6 Functional Specialization
Sales Force Organization Functional Specialists
Division Marketing Manager
SystemsManager
Industry Sales Manager
Administrative Manager
System Reps(Technical Support)
Account Executives (Salespeople)
Market Administrative (Training Installation)
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Functional Specialists Alternatives
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Strategic Accounts What is Different about
Strategic Accounts?
Figure 6-7 Changes in Joint Account Planning
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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 desires a long-term, cooperative
  working relationship
• The customer expects specialized attentionand
  service

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Strategic Accounts Common Problems with Account
Selection

• Too many strategic accounts
• We see them as strategic, but they dont even
  see us on their radar.
• Too much organizational effort directed towards
  big name accounts
• Not thinking enough about return on relationship
  investment
• No common process across the organization
• No tracking and reviewing of strategic account
  selection

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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

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Strategic Accounts Alternative Organization
Model Effectiveness
Table 6-1 Doing the Math on Account Management
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Strategic Accounts Programs Benefits
Increased sale to national accounts Increased
profits from national accounts Increasedmarket
share Improved customer communications Improved
customer coordination
91
83
74
74
30
18
Strategic Accounts Programs Compensation Levels
124,208
115,905
117,997
112,414
99,460
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Strategic Accounts Programs Insights from
Strategic Account Executives
Until the customer tell us were a
strategicsupplier, I cant believe that they
arein fact a strategic account for
us. Strategic accounts bring the
opportunitiesto you, instead of you always
having to try to push the ideas on them. If our
products and services arent criticalto our
customers performance and results,it is silly
to call them strategic accounts.
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Strategic Accounts Programs Insights from
Strategic Account Executives

• Before a real strategic account would make a
  particular decision, they would ask us for
  inputs, knowing ourinterests and theirs were
  aligned.
• The best strategic accounts are willing toopen
  the door, allow us to help them.There is an
  ongoing invitation to bringexpertise into their
  firm.

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Strategic Account Programs Survey Results
Are training programs for the strategic account
manager different?
Different training for strategic account managers

• No difference in training for strategic account
  managers or other sales staff

26
37
37
Provide no training for strategic account managers
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Strategic Account Programs Survey Results
Do your strategic account managers carry an
assigned sales quota?
No Response
Yes
3
No
29
68
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Strategic Account Programs Survey Results
Do strategic account managers have formal
authority over the rest of the sales organization?
No Response
May assemble temporary virtual sales teams that
report directly to the strategic account manager
7
24
Sales team reports directly to the strategic
account manager
22
47
No formal authority over others in the sales
organization
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Strategic Account Programs Survey Results
How do you measure the success of a strategic
account program?
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Sales Force Organization Cost Analysis
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Figure 6-8 The Scope of Telemarketing Activities
Sales Force Organization Scope of Telemarketing
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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

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Figure 6-9 Total Costs of Independent Agents
vs. Own Sales Force
Sales Force Organization Economic Analysis of
Sales Agents
Independent Agents
Total Selling Costs
Own Sales Force
Break-Even Sales
Sales Volume
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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 6-10 Market Factors Favoring the Use of
Sales Agents
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Sales Force Organization Selecting a Sales Agency

• 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

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Sales Force Organization Sales Agent Decision
and the Product Life Cycle
Disengagement Decision
Manufacturer Re-employs Rep firm to lower
fixed sales costs
Re-engagement Decision
Introduction
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Global Account Success Keys

• The companys value proposition must be right.
• Global account teams must be cross-functional
• Account teams must be driven from the top.
• A mindset of constant improvement is key.

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Sales Force Organization Key Account Sales Teams
at Ericsson
Country President
V.P. Business Operations Key Account Team
Global Accounts Director
Director Product Support
Director of Operations
Sales Director
Account Managers
Project Managers
Product Managers
Account Managers
Account Coordinators
Technical Support Engineers
Account Coordinators
Figure 6-11 Sales Team Organization at Ericsson
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Sales Force Organization Evaluating
Organizational Structure

• Financial performance -- must consider BOTH costs
  and revenues
• Adaptability
• Integration -- subunits of sales organization
  must work in harmony