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Module 4 Sales Organization Structure and Salesforce Deployment Sales Organization Concepts Specialization Degree to which salespeople and sales managers concentrate on specific sales or sales-support activities, specific products, and/or specific customers.

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sales organization concepts specialization

Sales Organization ConceptsSpecialization

Degree to which salespeople and sales managers concentrate on specific sales or sales-support activities, specific products, and/or specific customers.

sales organization concepts salesforce specialization continuum
Sales Organization ConceptsSalesforce Specialization Continuum

GENERALISTS

All selling activities and all products to all customers

Some specialization

of selling activities,

products, and/or

customers

SPECIALISTS

Certain selling activities for certain products for certain customers

sales organization concepts centralization

Sales Organization ConceptsCentralization

Degree to which important decisions and tasks are performed at higher levels in the management hierarchy.

span of control vs management levels

Flat Sales Organization

Span of Control vs. Management Levels

National

Sales Manager

Management Levels

District

District

District

District

District

Sales Manager

Sales Manager

Sales Manager

Sales Manager

Sales Manager

Span of Control

Tall Sales Organization

National

Sales Manager

Regional

Regional

Management Levels

Sales Manager

Sales Manager

District

District

District

District

District

District

District

Sales Manager

Sales Manager

Sales Manager

Sales Manager

Sales Manager

Sales Manager

Span of Control

line vs staff positions

National Sales Manager

Sales Training Manager

Regional Sales Manager

Sales Training Manager

District Sales Manager

Salespeople

Line vs Staff Positions
slide7
Generalization

Centralization

Tall Organizations

Specialization

Decentralization

Flat Organizations

selling situations that affect specialization decisions
Selling Situations that Affect Specialization Decisions
  • Selling Effort vs. Selling Skill
  • Environmental Characteristics
    • High uncertainty
    • Low uncertainty
  • Customer Needs and Product Complexity
selling situation contingencies customer and product determinants of salesforce specialization

Market-

Driven

Specialization

Geography-

Driven

Specialization

Product-

Driven

Specialization

Selling Situation ContingenciesCustomer and Product Determinants of Salesforce Specialization

Customer Needs Different

Product/Market-

Driven

Specialization

Simple

Product

Offering

Complex

Range of

Products

Customer Needs Similar

geographic sales organization
Geographic Sales Organization

National Sales Manager

Sales Training Mgr

Eastern Regional Sales Mgr

Western Regional Sales Mgr

Zone Sales Mgrs (4)

Zone Sales Mgrs (4)

District Sales Mgrs (20)

District Sales Mgrs (20)

Salespeople (100)

Salespeople (100)

product sales organization
Product Sales Organization

National Sales Manager

Office Equipment Sales Mgr

Office Supplies Mgr

District Sales Mgrs (10)

District Sales Mgrs (10)

Salespeople (100)

Salespeople (100)

market sales organization
Market Sales Organization

National Sales Manager

Commercial Accounts Sales Mgr

Government Account Sales Mgr

Sales Training Manager

District Sales Mgrs (10)

Zone Sales Mgrs (4)

Salespeople (50)

District Sales Mgrs (25)

Salespeople (50)

functional sales organization
Functional Sales Organization

National Sales Manager

Field Sales Manager

Telemarketing Sales Manager

Regional Sales Managers (4)

District Sales Managers (2)

District Sales Managers (16)

Salespeople (40)

Salespeople (160)

major accounts
Major Accounts
    • Large accounts
    • Complex needs
  • National Accounts
  • Global Accounts
sales organization structures major account options

Develop Major Account Salesforce

Assign Major Accounts to

Sales Managers

Assign Major Accounts to Salespeople

along with Other Accounts

Sales Organization StructuresMajor Account Options
slide16

Organizational

Structure

Advantages

Disadvantages

Geographic

·

·

Low Cost

Limited Specialization

·

·

No Geographic Duplication

Lack of Management Control Over

·

Product or Customer Emphasis

No Customer Duplication

·

Fewer Management Levels

Product

·

·

Salespeople Become

High Cost

Experts In Product Attributes

·

Geographic Duplication

and Applications

·

Customer Duplication

·

Management Control over

Selling Effort Allocated to

Products

Market

·

·

Salespeople Develop Better

High Cost

Understanding of Unique

·

Geographic Duplication

Customer Needs

·

Management Control Over

Selling Effort Allocated to

Different Markets

Functional

·

·

Efficiency in Performing

Geographic Duplication

Selling Activities

·

Customer Duplication

·

Need for Coordination

Comparison of

Sales Organization Structures

hybrid sales organization structure
Hybrid Sales Organization Structure

National Sales Manager

Commercial Accts Sales Mgr

Government Accts Sales Mgr

Office Equipt

Major Accts

Regular Accts

Office Supplies

Sales Mgr

Sales Mgr

Sales Mgr

Sales Mgr

Telemarketing

Field

Sales Mgr

Sales Mgr

Western

Eastern

Sales Mgr

Sales Mgr

salesforce deployment

Salesforce Deployment

Allocating selling effort

Determining salesforce size

Designing territories

interrelatedness of salesforce deployment decisions

Salesforce

Size

Territory

Design

Interrelatedness of Salesforce Deployment Decisions

How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved?

Allocation of

Selling Effort

How many salespeople are required to provide the desired amount of selling effort?

How should territories be designed and salespeople assigned to territories to ensure proper coverage of accounts and to provide each salesperson with a reasonable opportunity for success?

allocation of selling effort analytical approaches
Allocation of Selling EffortAnalytical Approaches
  • Single Factor Model
  • Portfolio Models
  • Decision Models
allocation of selling effort single factor models
Allocation of Selling EffortSingle Factor Models
  • Easy to develop and use/low analytical rigor
  • Accounts classified into categories based on one factor, such as market potential
  • All accounts in the same category are assigned the same number of sales calls
  • Effort allocation decisions are based on the analysis of only one factor and differences among accounts in the same category are notconsidered in assigning sales call coverage
allocation of selling effort single factor model example
Allocation of Selling EffortSingle Factor Model Example

Market Potential

Categories

A

B

C

D

Average Sales Calls to

an Account Next Year

32

24

16

8

allocation of selling effort portfolio models
Allocation of Selling EffortPortfolio Models
  • Account Opportunity
  • Competitive Position
allocation of selling effort portfolio model segments and strategies
Allocation of Selling EffortPortfolio Model Segments and Strategies

Competitive Position

Strong

Weak

Segment 1

Segment 2

High

Account Opportunity

Segment 3

Segment 4

Low

allocation of selling effort decision models
Allocation of Selling EffortDecision Models
  • Simple Basic Concept - to allocate sales calls to accounts that promise the highest sales return from the sales calls
    • Optimal number of calls in terms of sales or profit maximization
sales force size key considerations
Sales Force SizeKey Considerations
  • Sales Productivity
    • Ratio of sales generated to selling effort employed
  • Salesforce Turnover
    • Costly
    • Manage pipeline
sales force size analytical tools breakdown approach
Sales Force SizeAnalytical ToolsBreakdown Approach
  • Assumes an Accurate Sales Forecast
  • Advantage
    • Easy to use
  • Disadvantages
    • Conceptually weak; sales determine sales

Forecasted Sales

Sales Force Size =

Average Sales per Salesperson

sales force size analytical tools breakdown approach28
Sales Force SizeAnalytical ToolsBreakdown Approach

= $50,000,000 / $2,000,000

= 25 salespeople

Forecasted Sales

Sales Force Size =

Average Sales per Salesperson

sales force size analytical tools workload approach

Total Selling Effort Needed

# of Salespeople

=

Avg Selling Effort per Salesperson

Sales Force SizeAnalytical ToolsWorkload Approach
  • Integrates the salesforce size with account effort allocation strategies
  • Advantages
    • Easy to develop
    • Sound conceptually
sales force size analytical tools workload approach30

Total Selling Effort Needed

# of Salespeople

=

Avg Selling Effort per Salesperson

Sales Force SizeAnalytical ToolsWorkload Approach

= 75 salespeople

37,500 sales calls needed

=

500 annual sales calls per salesperson

sales force size analytical tools incremental approach
Sales Force SizeAnalytical ToolsIncremental Approach

Optimal # of Salespeople is where:

Marginal Profit from Added Salesperson =

Marginal Cost of That Salesperson

  • Advantage
    • Quantifies the important relationships between salesforce size, sales, and costs
  • Disadvantages
    • Difficult to develop
    • Requires historical data
designing territories
Designing Territories
  • Territory - consists of whatever specific accounts are assigned to a specific salesperson
    • Work unit for a salesperson
territory design procedure
Territory Design Procedure

Assess

Territory

Workload

Analyze

Planning and

Control Unit

Opportunity

Form Initial

Territories

Select

Planning and

Control Unit

Finalize

Territory

Design

using technology
Using Technology
  • Software to automate the process
    • Design potential territories
    • Print maps
    • Compare opportunity and work load
    • Easy to make changes
    • Sales Territory Configurator
    • Tactician
    • TerrAlign