Cours 3- Sales Force Structure And Territory Alignement Flashcards
4 stages of a business life cycle
Start up
Growth
Maturity
Décline
4 factors for a successful sales forces that changes according to life cycle state
- Role of sales force and selling partners
- Size of sales force
- Degree of specialization
- Sales force resource allocation
In the growth phase
It’s not sufficient to maintain a sales force of generalist
Start up degree of specialization
Low
Optimizing the maturity phase
When sales forces focus on the customers, products, selling activities that generate the highest response to their sales efforts
Sales force structure
Allow companies to conduct effective sales process
4 specialization
- Product based
- Geographic sales organization
- Activity based
- Customer based
Product based
- to avoid sp run into the same customer
- the company must assign key account manager to each customer
Advantage of product based
- Closer alignement of sales and production
- sales management controls allocation of selling effort across the various products
- sp master effective selling methods
Disadvantages of product based
Duplication of effort : different sp may travail to the same customer
—> to avoid sp run into the same customer
the company must assign key account manager to each customer
Geographic based
Can be seen as a generalist approach
Each sales person for 1 territory sales all the products lines to all the customers
Companies that has less diverse product portfolio
Advantages geographic sales organization
- cost saving : travel time and expenses
- get to know the customers better
- facilitante for coordination and motivation
- encourages entrepreneurship
- avoid replicating the efforts
Disadvantages geographic sales organization
Sales people may choose who to serve and what to sell
Not as effective as specialists
Activity based
2 sales roles
- Account manager
2. Application sales engineer
4 steps in the sale process
- Lead generation and qualification
- Closing
—> account manager - Prototyping and pricing
- Fulfillment and support
—> application sales engineer
Advantages of activity based
- the sales force has better knowledge of and effectiveness in sales activities that require diverse skills
- some tasks can be assigned to cheaper selling resources —> improve its efficiency
Disadvantages of activity based
Lack of customer focus and duplication of effort
Increase coordination requirements : spend cosndierable amount of time documenting customer information
Hunters
Business developer
Look for and acquire new accounts
Farmers
Cultivate relationship
Customer based
A d’avantages
- Better understating of customer needs
- increased familiarity with certain businesses
- increased control over allocation of deleting effort
Disadvàtages customer based
Possible higher selling and administrative costs
Duplication of effort
Generalists
Straightforward sales process
Homogenous customers
Efficiency possible
Within bandwidth
Specialist
Complex sales process
Diverse customers
Exceeds bandwidth
Effectiveness challenge
Sales territory
Set of customers/prospects, whose relationship is assigned to a sales representative by a director
May be a very limited number of key accounts
May be a large number of small account
Alignement
- people are provided with the same opportunities to succeed
- the assignement of accounts and their associated selling activities to sales people and teams
Alignement, type of structures
Generalist structure : each sp is assigned to a specific geographic area
Market based structure : specific accounts in addition to geography
Product based or activity based : define sales territory alignements by products or selling activity in addition to account and geography
Well designed sales territories will
- Improve customer and prospect coverage
—> increases sales force effectiveness, which leads directly to higher sales and profits - Improve morale and enhance the power of reward systems
- Keep travel time and costs under control
Territory
Territory potential and territory sales are highly correlated
Territory potential is a better predictor to territory sales
