Establishing Sales Organization
The purpose of the sales department is to facilitate selling of the company’s products to the customers and build long term relationships with the customers. Depending upon the nature of the product, the type of customers, the market realities and the company’s scale of operations, the organization of its sales team may vary.
· The organization of the sales team will also depend upon our business whether it is B2C (Business to Consumer) or B2B (Business to Business).
· In today’s highly dynamic times of changing market realities, the sales organization must be evaluated from time to time to ensure that we are able to respond to the customer needs and we can continue to grow selling profitably.
· The objective of the sales organization must be to ensure proper attention to all the customer segments and sales channels with the optimum utilization of the company resources to generate and grow sales of the products or services of the company. The organization can be based upon:
The product lines
Organizing the Sales Team Based on Product Lines
· If we have more than one product lines, then we may divide the sales team based on the products or services being sold.
· Suppose we are a big hypermarket ourselves and we sell different types of products. Our sales team may be divided as per the product lines in various divisions (e.g. Garments, Furniture, Electronics, Food Products etc.)
· If we are a B2B company, such a product-based division can be useful only if the customers of each product lines are different.
· If the same customer is being targeted for our different products by different sales teams, it may lead to confusion and wastage of resources. So, it must be ensured that as far as possible, no two different sales teams from our company are approaching the same customer.
· E.g. we make high value garments for men and women both. Our customers are the retail showrooms which sell either men’s or women’s garments.
· Here, as long as our retailers are different, there is no problem if sales teams are different. But, suppose we start selling to big stores who stock garments for both men and women, then such customers must be handled appropriately.
Organizing the Sales Team Based on Customer Types
· Even if the products are same, our products may be bought by different types of customers. E.g. we are a ceramic products manufacturing company. Our products are sold to the retail showrooms, builders and large institutions.
· All types of customers have different needs in terms of quantity, quality, service, terms & conditions.
· The sales approach to each type of customer will be different. Here, it will be advisable to divide the sales team based on the customer types.
· If we sell both in B2C and B2B modes, then also, we may divide the sales teams based on customer types. E.g. Tour operators selling holiday packages to individuals and also to travel agents can have two different sales teams for both the targets.
Organizing the Sales Team Based on Geographic Areas Covered
· Depending upon the spread of our target customer base, we can divide our sales team to cater to the customers in various geographies. E.g. The sales team can be organized to attend to customers on the basis of the following:
Continents / Regions / Subcontinents / Countries
States / Provinces
Organizing the Sales Team around Sales Channels
· In today’s Internet and mobile era, a company’s products or services can be sold through multiple channels.
· Products which were being sold through traditional distributor-dealer network are now also being sold through organized retail or modern retail formats like malls, hypermarkets, supermarkets etc. Also, there is a new sales channel through e-commerce web sites and Internet marketplaces.
· Similarly, financial products like insurance, fixed deposits, shares etc. are now also being sold through Internet which were earlier sold only through agents and brokers.
· The challenges and requirements of each of these sales channels are different and hence they require matching approaches by an appropriate sales organization.
Organizing the Sales Team around Key Accounts
· There may be some customers who are much larger than our other regular ones. Sometimes, these large accounts make up the major part of our sales and hence, these accounts need special attention, extended support and service. These are called the key accounts.
Generally, such key accounts are separated from the other ones and are assigned to special sales teams. Government, institutions, big corporate, large organized retail chains are the examples of key accounts for some manufacturing firms.
· among the sales team members?
Determining the Size of The Sales Team
· The size of the sales team is generally based on the number of customers to be attended or approached by the team.
· If we are a retail organization, the number of Salesmen required may be determined by the size of the store, the number of departments and the estimated number of customers visiting the store during peak hours.
· If our sales team must visit the customers outside, then we need to fix up the total number of customers or prospects we wish to be visited.
· Based upon the realistic estimate of the number of customers a sales person can visit and properly attend, and our target of customers to be visited daily, we must calculate the number of Salesmen required in the team.
· Every 6 to 8 persons in a sales team must be monitored by some supervisor or manager above them.
· The sales organization structure, our current sales and our target and future plans can help us arrive at the right number of Salesmen to be appointed at various levels.
· In case of B2B sales, the size of the sales team must be adequate to ensure proper relationship building with the long-term customers.
· For B2C sales, the number of Salesmen must be enough to make sure that all customers are properly attended and serviced all the time.
The determination of the size must also consider the cost of the sales team against sales and the potential increase in the sales against our profit margins.
Dr Praveen Srivastava, Business Coach & Management Consultant
Recipient of Philip Kotler excellence award in the area of Consulting and Training
www.praveencsrivastava.com & www.pnpconsultants.net