Sales Organization Structure and Sales Force Deployment Objectives
Sales Organization Structure and Sales Force Deployment
Objectives Sales Organization Concepts Sales Organization Structures Sales Force Deployment Forecasting
Sales Organization Concepts Specialization Centralization Span of Control versus Management Levels Line Versus Staff Positions
Span of Control versus Management Levels Flat Sales Organization Management level National Sales Manager Area Sales Manager Span of Control Area Sales Manager
Span of Control versus Management Levels Tall Sales Organization National Sales Manager Span of Control Regional Sales Manager Area Sales Manager Area Sales Manager Management level
Line vs Staff Positions National Sales Manager Sales Training Manager Regional Sales Manager Area Sales Manager Sales People
Sales Organization Structures Geographic Sales Organization Product Sales Organization Market Sales Organization Functional Sales Organization Major Account Organization
Geographic Sales Organization National Sales Manager Sales Training Manager North Sales Manager Central Sales Manager South Sales Manager Area Sales Manager (2) Territory Managers(4) Territory Managers(8) Territory Managers (6) Salespeople Sales people
Product / Category Sales Organization National Sales Manager Sales Training Manager Office Equipment Sales Manager Office Supplies Sales Manager Territory Managers(8) Salespeople Sales people
Market / Segment Sales Organization National Sales Manager Sales Training Manager Commercial Sales Manager Government Sales Manager Area Sales Managers(3) Area Sales Managers(2) Territory Managers (18) Territory Managers (6) Sales people
Functional / Channel Sales Organization National Sales Manager Field Sales Manager On line Sales Manager Regional Sales Manager (2) Area Sales Managers (4) Area Sales Manager (4) Sales People Delivery / Sales people
Major Account Sales Purchasing Function of account is centralized Top Management Influences decision Multiple Purchasing Influences Purchasing is complex Price concessions Special Services Customized Products Global sensitivities P&L sensitivities
Comparison of Sales Organization Structure Advantages Disadvantages Geographic Low cost No geographic duplication No customer duplication Fewer Management Levels Limited Specialization Lack of Management Control Lack of Customer Focus Product Sales people know their product attributes. Management control over allocation of selling effort over products High cost Geographic duplication Customer duplication Market Understanding of customer needs Management control over allocation of selling effort to different markets High cost Geographic duplication Functional Efficiency in performing selling activities Geographic duplication Customer duplication Need for coordination
Can we do a Hybrid Sales Organization? Show me how !!!!!
Sales Force Deployment How much selling effort is needed to cover accounts and prospects adequately so that sales is achieved? How many salespeople are required to provide the desired amount of selling effort? How may territories be designed to ensure proper coverage of accounts and to provide each salesperson with an opportunity for success?
Selling Effort - Single Factor Model Straight Sales Increase of 20% Market Potential Categories Average Sales Calls To Account last year Average Sales Calls to Account Next year A 25 30 B 20 24 C 15 18 D 10 12 84 calls /year
Selling Effort - Portfolio Factor Model Straight Sales Increase of 20% Market Potential Categories Credit History Average Sales Calls To Account last year Average Sales Calls to Account Next year A A 25 32 B C 20 24 C B 15 18 D C 10 10 Follow Credit rating
Sales Force Size Productivity Sales per salesperson Employee Turnover Monthly rate = Left employees #/Total Head Count Annualized rate = Left employees #/Average Head Count*12/Month # March =4/60*12/3 Organizational Strategy
Approaches Breakdown Approach Sales Force Size = Forecasted Sales/ Average sales per salesperson Sales Force Size = 50, 000 / 2, 000 = 25 salespersons Workload Approach No of sales people = Total Selling efforts (calls)/ Average selling effort per sales person Incremental Approach Not recommended
Designing Territories Select Planning and Control Unit Analyze Planning and Control Unit Opportunity Form Initial Territories Assess Workload Finalize Territory Design
Potential Planning and Control Units Pakistan Sindh Karachi Saddar North & FB Gulshan Clifton & Defence Korangi Accounts
Assessing Workloads No of sales calls required to cover territory Amount of travel time in territory Total no of accounts Any other factor that increases workload
Types of Forecasting Approaches Top Down Bottom up
Top Down Approach Moving Average Weighted Moving Average Exponential Smoothing (weights to recent months) Regression Decomposition methods Trend, Cycle, Seasonal and Erratic events
Bottom Up Approach Survey of buyer intentions method Jury of Executive Opinion method Delphi method Sales Force Composite method
Financial Performance of Retailers Outputs – Performance Inputs Used by Retailers Sales Profits Cash flow Growth in sales, profits Same store sales growth Inventory ($) Real Estate (sq. ft. ) Employees (#) Overhead (Corporate Staff and Expenses) Advertising Energy Costs MIS expenses 6 -26
Productivity: Outputs/Input Corporate Level ROA = Profits/Assets Comparable store sales growth (same-store sales growth) Buyers (Inventory, Pricing, Advertising) Gross Margin % = Gross Margin/Sales Inv Turnover = COGS/ Avg. Inventory (cost) GMROI = Gross Margin/Average Inventory Advertising as % of sales Stores (Real Estate, Employees) Sales/Square Feet Sales/Employee inv. Shrinkage/sales Transactions / Footfall Ticket Size(sales/# of transactions) Items Per Ticket (total items sold/total transactions) Conversion Rate (total transactions/total traffic) 6 -27
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