The value of the sales force in any business organization is indispensable. The sales people play a critical role as they convince consumers to purchase products of an organization.
However, it is important to organize the sales force in a manner that supports an organization on various fronts. Specifically, the organization of the sales force should support the pursuit of an organisation’s goals.
Structuring follows a well laid down strategy. The structuring of any department is done based on the strategies, objectives, and goals of an organization. Objectives of structuring include getting results from customers, developing new businesses, retaining or increasing current business and increasing customer loyalty.
Primarily, sales strategies seek to present solutions to problems that arise from advertising, reinforce the importance of advertising, creating product value, dominating the supply channels and embracing innovation (Katzenbach and Smith, 2003).
Sales management strategies differ depending on various circumstances. As an illustration, an organization may decide to use supply pricing vs. demand pricing.
Alternatively, a differentiated or commodity approach may be used. Other approaches such as cross-platform versus single medium, innovative versus traditional, numbers-oriented versus results oriented, etc are used. The realization that a number of variables influence sales implies that structuring the sales departments is a complex task.
Customer-Oriented sales force structure
One approach that is useful in organizing sales people is based on customer orientation (Kleinman, 2009). This implies that organisations may decide to structure the sales force in a way that lays emphasis on the customer. In this regard, an organization may develop a product-oriented or customer-oriented structure.
Therefore, an organization using this approach may organize the sales staff depending on the type of customers. In this scenario, an organization would have retail sales teams, agency sales teams, national sales teams, etc.
Organizing the sales team by category is another form of customer-oriented structuring. As an illustration, magazines and newspaper sales departments are organized in terms of categories. More precisely, there are such categories as retail, automotive, jewellery, etc. However, in most cases, large sales departments are organized as verticals or categories.
The advantage of using this structure lies on the notion that it enables the salespeople in each group to develop into experts in the respective categories. This structure allows the sales people to be more knowledgeable regarding customer businesses and more informed on trends in the industry.
An organization’s compensation system influences the structuring of the sales teams into categories. By way of illustration, most organizations pay their sales staff by commission. The commissions are directly related to the volume of sales. It is thus evident that such a system rewards individual performance.
Consequently, organizations that offer individual rewards do not encourage the use of category marketing. Category marketing is not preferred in organizations as some categories stand to benefit more than others as different products sell at different rates. The customer-oriented sales structure has a negative part as customers coming from different regions may force sales representatives to spend more resources and time travelling to meet.
Product-Oriented sales force structure
The products a firm deals in influences the organization of sales staff. By way of illustration, the nature of a product may force a radio network to have different sales teams. Such teams would include a daytime sales group, a prime sales group, a sports sales group, a late night sales group, etc.
Regarding a newspaper network such as the Sunday Times, there are multiple products including the Sunday Times magazine and the Sunday paper, hence, the sales staff may be structured based on the product and later by category. Categories are determined based on the product teams.
The span of control is an important factor that influences the structuring of sales teams. The span of control has six variables. The variables include sales manager experience, sales person experience, necessary interaction, sales person personality, job scope and task complexity (Ingram, 2008).
In reference to the span of control, important questions centre on the number of people who report to a manager. In this regard, job complexity should be considered. Task complexity depends upon such factors as deal, number of categories and proximity of the customer.
It is noticeable that some sales tasks are relatively simple as small transactions are involved, for example, transacting a classified advertisement is possibly handled using a telephone conversation. However transacting cross-platform deals is not easy. This view is held since the latter transaction demands more negotiation sessions while the former may not require more than one session.
It is thus clear that the second deal requires more preparation. In addition, the location of customers influences the structuring of the sales force. As an illustration, if retailers are close to a newspaper office, then the sellers do not need to travel long distances.
Apart from job complexity, job scope affects the structuring of the sales people. In regards to the scope of job, such aspects as the buying cycle, the nature of customer and nature of product are examined. It is important to note that some sales tasks have a limited focus. Such seals as those involving radio advertising may require little preparation or none at all.
On the other hand, other some sales may require cross-platform selling which may involve the use of several advertising media. These are sales tasks that have a higher level of complexity and require advanced preparations. It is thus evident that complex jobs demand extra work and may influence the structuring of sales people.
This underscores the point that the more complex a product is, the more complex advertising is, and thus this affects the structure of the sales team. More precisely, complex sales require more support staff (Ingram, 2008).
Regarding necessary interaction, it is worth noting that some jobs require minimum while other call for maximum attention. Sales work demand different levels of interaction between a sales representative and a manager. Some jobs may require constant contact while others do not.
As an illustration, a sales representative dealing in a short business cycle where there are high-level negotiations, interaction with the manager is frequently done within short periods. Such would not be the case when a sales person is handling straightforward products that do not require negotiations (Ingram, 2008).
The level of experience a sales person holds is crucial in the structuring of the sales force. Those people who have lengthy experience in sales do not need to keep constant contact with management regarding what to do. Thus, a sales executive dealing with experienced sales representatives are allowed a broader scope of control (Ingram, 2008).
The approach is useful when dealing in products that are produced using sophisticated technologies. The structuring also depends on whether products are interrelated or not. Precisely, every sales team is assigned a responsibility of selling specific products.
Geographic-oriented sales force structure
The geographic-oriented sales approach presents another way of organizing the sales force within an organization. In this approach, an organization segments its target market into regions (Katzenbach and Smith, 2003). After the segmentation, each region, district, country or any other geographical division is assigned a sales representative or a group of sales representatives.
Dividing a market into regions and assigning the divisions to sales representatives is valuable as such helps in improving communication and interaction between organizations and sales representatives. Additionally, the notion that a sales representative is engaged within a specific region supports the view that costs are reduced since travelling is limited.
It should also be noted that assigning specific people to deal with regions helps such personnel to understand the preferences of customers within the areas of operation. Such an understanding is invaluable since the sales people are able to convey the customer preferences and views to the producers.
Based on the information gathered and forwarded to the management by the sales people, the organisations in question have the opportunity to respond by producing products that meet the customers’ specifications. In the process, an organisation benefits from increased sales.
Despite the establishment above that organisations gain from geographic-based sales force, it is worth noting that disadvantages abound. As an example, it is difficult to have a homogenous group in any region. This implies that the demand for products in a region is never uniform since customers are spread across various classes.
As such, using the geographic-based approach is not helpful in understanding the different classes of consumers because the sales staff may be tempted to lump the consumers of a region into one group.
Combination-based sales force structure
The fourth approach to organizing the sales force is combination-based. Just as the name suggests, it is possible to put the three approaches together in order to help structure or restructure the sales force (Katzenbach and Smith, 2003).
This approach is predominantly preferable in cases where organizations offer different products to various groups of people in a big region. Alternatively, the approach is useful when a business entity focuses on various customers or products within a specific location.
By way of illustration, in a bid to underscore a product’s strategic value or to position the product strategically and avoid other products distracting the sales people, an organization should structure the sales force based on the particular product while sales groups of other products are organized bearing in mind the geography.
In embracing this approach, an organization stands a chance to avoid facing the disadvantages associated with the other three approaches. However, it is notable that this approach requires the recruitment of a big number of sales people and as such, the approach is suitable for large enterprises.
Using a combination of the sales approaches is very important. Such an approach would ensure that all needs of the different customers are taken into consideration irrespective of the location.
Important observations
Central to the idea of organizing sales teams is the pursuit of organizational goals as indicated in the introductory part of the paper. This follows from the premise that the way an organization structures its sales force has a bearing on the performance of a business entity. It is expected that the right marketing structure is necessary if any a business is to realize its goals.
Right from the initial stages, organizations focus on setting up their sales teams in a manner that is aimed at maximizing sales, improving customer experience and encouraging repeat purchases. Every important manager should take responsibility regarding the association between a consumer and the business.
Towards achieving this goal, the manager makes an effort to ensure that customer concerns are addressed by keeping close contact. It would thus emerge based on this observation that the marketing arrangement is intended to foster customer contact and improve a business’ fortunes.
It is noticeable that in small businesses, marketing is in most cases structured as a supportive service for sales. This implies that employees report to those individuals that head the sales department.
This approach may work well although the marketing strategy is likely to suffer, as other activities involving market research are likely to be relegated to the periphery. However, by structuring an entity with combined sales personnel, a business is in a position to minimize such risks.
The choice of the structure used in organizing the sales force lies with organizational managers. However, irrespective of the structure an organization chooses, the role of communication is important. This is because, feedback from customers is sought in order to improve services or products. In addition, market research is crucial as it facilitates gathering of competitor intelligence that is useful in helping the sales teams to hone their skills.
Conclusion
The sales management team is responsible for organizing the sales force. As this essay establishes, the management has the option of organizing the sales force geographically, based on the products sold, based on customer focus or combining these models. Using the geographical structuring approach, sales representatives occupy specific geographical divisions.
Although, this approach is cheap as it lowers expenses, it may pose problems since geographical sales representatives do not have a good opportunity to understand fully all products offered. Secondly, the use of the product-based approach allows the structuring of a sales force based on special expertise.
This approach is useful as it allows only specialized sales people to deal in certain products or respond to needs of special customers. Further, the approach facilitates learning and enables the sales personnel to develop their knowledge on the products in question.
Using the customer-oriented approach, an organization gets the chance to align its sales with customer requirements. Based on the paper it emerges that each approach has its benefits and setbacks. In a bid to mitigate the drawbacks that characterize each approach, it is proposed that organizations consider using a combined approach to organizing the sales force.
However, only big organizations have the necessary resources to use the combined approach and as thus, it may not be a solution to small organizations.
Before choosing the model to embrace in business, it is important for any organisation to establish the goals it seeks to achieve. After taking the first step, it is valuable to align the structuring approach with the goals being pursued. Additionally, the size of the business and the costs likely to be incurred should be considered while making the choice of the right structure.
As the paper establishes, each approach has its strengths and weaknesses and it is thus important to weigh them. In conclusion, taking the combined approach is preferable although the model may be out of reach for the small organisations.
Reference List
Ingram, T.N. et al. (2008). Sales Management: Analysis and Decision Making. Armonk, Town of North Castle, New York: M.E. Sharpe.
Katzenbach, J.R. & Smith, D.K. (2003). The Wisdom of Teams: Creating the High-Performance Organization. Boston: Harvard Business School Press.
Kleinman, D. (2009). All Star Sales Teams: 8 Steps to Spectacular Success UsingGoals, Values, Vision, and Rewards: Easy Read Comfort. New York: Read.