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Sales Organization Structure and
Sales Force Deployment
Module Four
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Learning Objectives
1. Define the concepts of specialization,
centralization, span of control versus management
levels, and line versus staff positions.
2. Describe the ways sales forces might be
specialized.
3. Evaluate the advantages and disadvantages of
sales organization structures.
4. Name the important considerations in organizing
major account management programs.
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Learning Objectives
5. Explain how to determine the appropriate sales
organization structure for a given selling situation.
6. Discuss sales force deployment.
7. Explain three analytical approaches for
determining allocation of selling offer.
8. Describe three methods for calculating sales force
size.
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Learning Objectives
9. Explain the importance of sales territories and list
the steps in the territory design process.
10. Discuss the important “people” considerations in
sales force deployment.
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Setting the Stage
1. What is one of the key changes IBM
made to the structure of its sales
organization?
2. What change did IBM make to the way its
salespeople and sales managers
interact?
Strategy and Sales
Organization Structure: IBM
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Organization Concepts
Specialization
The degree to which individuals perform some of the
required tasks to the exclusion of others. Individuals
can become experts on certain tasks, leading to better
performance for the entire organization.
Centralization
The degree two which important decisions and tasks
performed at higher levels in the management
hierarchy. Centralized structures place authority and
responsibility at higher management levels.
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Specialization Continuum
Some specialization
of selling activities,
products, and/or
customers
All selling activities
and all products to
all customers
Generalists
Certain selling
activities for certain
products for certain
customers
Specialists
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Flat Sales Organization
Span of Control
ManagementLevels
National
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
Span of Control vs. Management Levels
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Tall Sales Organization
National Sales
Manager
Span of Control
ManagementLevels
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
District
Sales
Manager
Regional Sales
Manager
Regional Sales
Manager
Span of Control vs. Management Levels
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
National Sales Manager
Regional Sales Managers
District Sales Managers
Sales Training Manager
Sales Training Manager
Salespeople
Staff Position
Line Position
Line vs. Staff Positions
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Organizational
Structure
Environmental
Characteristics
Task
Performance
Performance
Objective
Specialization
High Envir.
uncertainty Nonroutine Adaptiveness
Centralization
Low Envir.
Uncertainty Repetitive Effectiveness
Selling-Situation Factors and
Organizational Structure
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Simple
Product
Offering
Complex
Range of
Products
Customer Needs Different
Customer Needs Similar
Market-
Driven
Specialization
Product/Market-
Driven
Specialization
Geography-
Driven
Specialization
Product-
Driven
Specialization
Customer and Product Determinants
of Sales Force Specialization
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Geographic Sales Organization
National Sales Manager
Zone Sales Managers (4) Zone Sales Managers (4)
District Sales Managers (20)
Salespeople (100) Salespeople (100)
District Sales Managers (20)
Eastern Region Sales Manager Western Region Sales Manager
Sales Training Manager
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Product Sales Organization
National Sales Manager
Office Equipment Sales Manager Office Supplies Sales Manager
District Sales Managers (10)
Salespeople (100) Salespeople (100)
District Sales Managers (10)
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Market Sales Organization
National Sales Manager
Zone Sales Managers (4)
District Sales Managers (25)
Salespeople (150)
District Sales Managers (5)
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Sales Training
Manager
Salespeople (50)
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Functional Sales Organization
National Sales Manager
Field Sales Manager Telemarketing Sales Manager
Regional Sales Managers (4)
Salespeople (160)
Salespeople (40)
District Sales Managers (2)
District Sales Managers (16)
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Large
Small
Complexity of Account
SizeofAccount
Large
Account
Simple Complex
Major
Account
Regular
Account
Complex
Account
Identifying Major Accounts
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Develop Major Account Salesforce
Assign Major Accounts to
Sales Managers
Assign Major Accounts to Salespeople
along with Other Accounts
Major Accounts Options
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages
Geographic
• Low Cost
• No geographic duplication
• No customer duplication
• Fewer management levels
• Limited specialization
• Lack of management
control over product or
customer emphasis
Product
• Salespeople become experts
in product attr. & applications
• Management control over
selling effort
• High cost
• Geographic duplication
• Customer duplication
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Comparison of
Sales Organization Structures
Organizational
Structure Advantages Disadvantages
Market
• Salespeople develop
better understanding of
unique customer needs
• Management control over
selling allocated to different
markets
• High cost
• Geographic duplication
Functional
• Efficiency in performing
selling activities
• Geographic duplication
• Customer duplication
• Need for coordination
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Hybrid Sales Organization Structure
National Sales Manager
Major Accounts
Sales Manager
Regular Accounts
Sales Manager
Office Equipment
Sales Manager
Office Supplies
Sales Manager
Field Sales
Manager
Telemarketing
Sales Manager
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Western
Sales Manager
Eastern
Sales Manager
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Salesforce Deployment
1. How much selling effort is needed to cover accounts and
prospects adequately so that sales and profit objectives
will be achieved?
2. How many salespeople are required to provide the desired
amount of selling effort?
3. How should territories be designed to ensure proper
coverage of accounts and to provide each salesperson
with a reasonable opportunity for success?
Sales Force deployment decisions can be viewed as
providing answers to three interrelated questions.
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Interrelatedness of
Sales Force Deployment Decisions
How much selling effort is needed to cover
accounts and prospects adequately so that sales
and profit objectives will be achieved?
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
Allocation of
Selling Effort
Sales Force
Size
Sales Force
Size
Territory
Design
Territory
Design
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Single Factor
Models
Single Factor
Models
Easy to Develop and Use
Difficult to Develop and Use
Low
Analytical
Rigor
High
Analytical
Rigor
Portfolio
Models
Portfolio
Models
Decision
Models
Decision
Models
Analytical Approaches to
Allocation of Selling Effort
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Single 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 not considered in assigning
sales call coverage
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Single Factor Model Example
Market Potential
Categories
A
B
C
D
Average Sales Calls to
an Account Last Year
25
23
20
16
Average Sales Calls to
an Account Next Year
32
24
16
8
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Portfolio Models
• Account Opportunity - an account’s need
for and ability to purchase the firm’s
products
• Competitive Position - the strength of the
relationship between the firm and an
account
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Portfolio Model Segments and Strategies
Competitive PositionCompetitive Position
Segment 1Segment 1 Segment 2Segment 2
Segment 4Segment 4Segment 3Segment 3
Strong Weak
LowHigh
AccountOpportunityAccountOpportunity
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Decision 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
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Size: Key Considerations
• Sales Productivity - the ratio of sales generated
to selling effort used
– In early stages, the addition of salespeople increases sales
considerably more than the selling costs. As salespeople
continue to be added, sales increases tend to decline until a
point is reached when the costs to add a salesperson are more
than the revenues that salesperson can generate.
• Salesforce Turnover
– Is very costly
– Should be anticipated
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Size: Analytical Tools
Salesforce size = Forecasted sales / Average sales per person
The Breakdown Approach is used to determine the
number of salespeople needed to generate a
forecasted level of sales. This approach is easy to
develop. However, it is weak conceptually. The
concept underlying the calculations is that sales
determine the number of salespeople needed—putting
“the cart before the horse.”
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Size: Analytical Tools
The Workload Approach determines how much selling
effort is needed to adequately cover the firm’s market.
Then the number of salespeople required to provide
this amount of selling effort is calculated. This
approach relatively simple to develop and is sound
conceptually.
Number of salespeople =
Total selling effort needed
Average selling effort per
salesperson
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Sales Force Size: Analytical Tools
The Incremental Approach is the most rigorous for
calculating salesforce size. Its compares the marginal
profits and marginal costs associated with each
incremental salesperson. The major advantage is that it
quantifies the important relationships between salesforce
size, sales, and costs. However, this method is difficult to
develop, and it cannot be used for new sales forces where
historical data and accurate judgments are not possible.
# of Salespeople Marginal Contribution Marginal Cost
100
101
102
103
$85,000
$80,000
$75,000
$70,000
$75,000
$75,000
$75,000
$75,000
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Designing Territories
• Territories consist of whatever specific
accounts are assigned to a specific
salesperson. The territory can be viewed as
the work unit for a salesperson.
• Territory Considerations
– Trading areas
– Present effort
– Recommended effort
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 4:
Sales Organization Structure and Sales Force Deployment
Territory Design Procedure
Finalize
Territory
Design
Assess
Territory
Workload
Form Initial
Territories
Analyze
Planning and
Control Unit
Opportunity
Select
Planning and
Control Unit

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Types of sales organisation structure

  • 1. Sales Organization Structure and Sales Force Deployment Module Four
  • 2. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Learning Objectives 1. Define the concepts of specialization, centralization, span of control versus management levels, and line versus staff positions. 2. Describe the ways sales forces might be specialized. 3. Evaluate the advantages and disadvantages of sales organization structures. 4. Name the important considerations in organizing major account management programs.
  • 3. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Learning Objectives 5. Explain how to determine the appropriate sales organization structure for a given selling situation. 6. Discuss sales force deployment. 7. Explain three analytical approaches for determining allocation of selling offer. 8. Describe three methods for calculating sales force size.
  • 4. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Learning Objectives 9. Explain the importance of sales territories and list the steps in the territory design process. 10. Discuss the important “people” considerations in sales force deployment.
  • 5. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Setting the Stage 1. What is one of the key changes IBM made to the structure of its sales organization? 2. What change did IBM make to the way its salespeople and sales managers interact? Strategy and Sales Organization Structure: IBM
  • 6. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Organization Concepts Specialization The degree to which individuals perform some of the required tasks to the exclusion of others. Individuals can become experts on certain tasks, leading to better performance for the entire organization. Centralization The degree two which important decisions and tasks performed at higher levels in the management hierarchy. Centralized structures place authority and responsibility at higher management levels.
  • 7. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Force Specialization Continuum Some specialization of selling activities, products, and/or customers All selling activities and all products to all customers Generalists Certain selling activities for certain products for certain customers Specialists
  • 8. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Flat Sales Organization Span of Control ManagementLevels National Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager Span of Control vs. Management Levels
  • 9. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Tall Sales Organization National Sales Manager Span of Control ManagementLevels District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager District Sales Manager Regional Sales Manager Regional Sales Manager Span of Control vs. Management Levels
  • 10. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment National Sales Manager Regional Sales Managers District Sales Managers Sales Training Manager Sales Training Manager Salespeople Staff Position Line Position Line vs. Staff Positions
  • 11. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Organizational Structure Environmental Characteristics Task Performance Performance Objective Specialization High Envir. uncertainty Nonroutine Adaptiveness Centralization Low Envir. Uncertainty Repetitive Effectiveness Selling-Situation Factors and Organizational Structure
  • 12. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Simple Product Offering Complex Range of Products Customer Needs Different Customer Needs Similar Market- Driven Specialization Product/Market- Driven Specialization Geography- Driven Specialization Product- Driven Specialization Customer and Product Determinants of Sales Force Specialization
  • 13. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Geographic Sales Organization National Sales Manager Zone Sales Managers (4) Zone Sales Managers (4) District Sales Managers (20) Salespeople (100) Salespeople (100) District Sales Managers (20) Eastern Region Sales Manager Western Region Sales Manager Sales Training Manager
  • 14. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Product Sales Organization National Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager District Sales Managers (10) Salespeople (100) Salespeople (100) District Sales Managers (10)
  • 15. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Market Sales Organization National Sales Manager Zone Sales Managers (4) District Sales Managers (25) Salespeople (150) District Sales Managers (5) Commercial Accounts Sales Manager Government Accounts Sales Manager Sales Training Manager Salespeople (50)
  • 16. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Functional Sales Organization National Sales Manager Field Sales Manager Telemarketing Sales Manager Regional Sales Managers (4) Salespeople (160) Salespeople (40) District Sales Managers (2) District Sales Managers (16)
  • 17. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Large Small Complexity of Account SizeofAccount Large Account Simple Complex Major Account Regular Account Complex Account Identifying Major Accounts
  • 18. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Develop Major Account Salesforce Assign Major Accounts to Sales Managers Assign Major Accounts to Salespeople along with Other Accounts Major Accounts Options
  • 19. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Comparison of Sales Organization Structures Organizational Structure Advantages Disadvantages Geographic • Low Cost • No geographic duplication • No customer duplication • Fewer management levels • Limited specialization • Lack of management control over product or customer emphasis Product • Salespeople become experts in product attr. & applications • Management control over selling effort • High cost • Geographic duplication • Customer duplication
  • 20. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Comparison of Sales Organization Structures Organizational Structure Advantages Disadvantages Market • Salespeople develop better understanding of unique customer needs • Management control over selling allocated to different markets • High cost • Geographic duplication Functional • Efficiency in performing selling activities • Geographic duplication • Customer duplication • Need for coordination
  • 21. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Hybrid Sales Organization Structure National Sales Manager Major Accounts Sales Manager Regular Accounts Sales Manager Office Equipment Sales Manager Office Supplies Sales Manager Field Sales Manager Telemarketing Sales Manager Commercial Accounts Sales Manager Government Accounts Sales Manager Western Sales Manager Eastern Sales Manager
  • 22. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Salesforce Deployment 1. How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved? 2. How many salespeople are required to provide the desired amount of selling effort? 3. How should territories be designed to ensure proper coverage of accounts and to provide each salesperson with a reasonable opportunity for success? Sales Force deployment decisions can be viewed as providing answers to three interrelated questions.
  • 23. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Interrelatedness of Sales Force Deployment Decisions How much selling effort is needed to cover accounts and prospects adequately so that sales and profit objectives will be achieved? 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 Allocation of Selling Effort Sales Force Size Sales Force Size Territory Design Territory Design
  • 24. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Single Factor Models Single Factor Models Easy to Develop and Use Difficult to Develop and Use Low Analytical Rigor High Analytical Rigor Portfolio Models Portfolio Models Decision Models Decision Models Analytical Approaches to Allocation of Selling Effort
  • 25. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Single 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 not considered in assigning sales call coverage
  • 26. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Single Factor Model Example Market Potential Categories A B C D Average Sales Calls to an Account Last Year 25 23 20 16 Average Sales Calls to an Account Next Year 32 24 16 8
  • 27. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Portfolio Models • Account Opportunity - an account’s need for and ability to purchase the firm’s products • Competitive Position - the strength of the relationship between the firm and an account
  • 28. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Portfolio Model Segments and Strategies Competitive PositionCompetitive Position Segment 1Segment 1 Segment 2Segment 2 Segment 4Segment 4Segment 3Segment 3 Strong Weak LowHigh AccountOpportunityAccountOpportunity
  • 29. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Decision 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
  • 30. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Force Size: Key Considerations • Sales Productivity - the ratio of sales generated to selling effort used – In early stages, the addition of salespeople increases sales considerably more than the selling costs. As salespeople continue to be added, sales increases tend to decline until a point is reached when the costs to add a salesperson are more than the revenues that salesperson can generate. • Salesforce Turnover – Is very costly – Should be anticipated
  • 31. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Force Size: Analytical Tools Salesforce size = Forecasted sales / Average sales per person The Breakdown Approach is used to determine the number of salespeople needed to generate a forecasted level of sales. This approach is easy to develop. However, it is weak conceptually. The concept underlying the calculations is that sales determine the number of salespeople needed—putting “the cart before the horse.”
  • 32. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Force Size: Analytical Tools The Workload Approach determines how much selling effort is needed to adequately cover the firm’s market. Then the number of salespeople required to provide this amount of selling effort is calculated. This approach relatively simple to develop and is sound conceptually. Number of salespeople = Total selling effort needed Average selling effort per salesperson
  • 33. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Sales Force Size: Analytical Tools The Incremental Approach is the most rigorous for calculating salesforce size. Its compares the marginal profits and marginal costs associated with each incremental salesperson. The major advantage is that it quantifies the important relationships between salesforce size, sales, and costs. However, this method is difficult to develop, and it cannot be used for new sales forces where historical data and accurate judgments are not possible. # of Salespeople Marginal Contribution Marginal Cost 100 101 102 103 $85,000 $80,000 $75,000 $70,000 $75,000 $75,000 $75,000 $75,000
  • 34. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Designing Territories • Territories consist of whatever specific accounts are assigned to a specific salesperson. The territory can be viewed as the work unit for a salesperson. • Territory Considerations – Trading areas – Present effort – Recommended effort
  • 35. Ingram LaForge Avila Schwepker Jr. Williams Professional Selling: A Trust-Based Approach Module 4: Sales Organization Structure and Sales Force Deployment Territory Design Procedure Finalize Territory Design Assess Territory Workload Form Initial Territories Analyze Planning and Control Unit Opportunity Select Planning and Control Unit

Editor's Notes

  1. Answers The salespeople now work in teams to sell complete solutions consisting of both products and services. The teams organize according to customer size, industry, and location. Salespeople are part of a sales force that serves three main customer groups: large, integrated accounts; clusters of aligned accounts; or small and medium-sized accounts. Meetings between salespeople and sales managers are limited to one 30-minute meeting each Monday. No other meetings are required. The meetings focus on coaching and solving customer problems. This frees up more time for IBM salespeople to sell.