Sales management structures

Join our monthly newsletter to get enablement best practices from our customers, partners, and more. Behind every top seller is a carefully structured sales organization that allows individuals to perform at their best. Sales organization structure refers to the segmentation of your sales team into specialized groups. How you organize your sales team will be determined by the regions you serve, the number of products and services you offer, the size of your sales team, and the size and industry of your customers.

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Content:

• Basic Types of Sales Organizational Structures
• Some typical evolving organization structures - Sales Management
• Sales force: 3 ways to organize your sales team
• Advantages and Disadvantages of Different Sales Structures
• How You Should Structure Your Sales Organization
• Gartner Glossary

Basic Types of Sales Organizational Structures

It is composed of the group of individuals, striving jointly to reach qualitative and quantitative personal selling objectives and bearing both informal and formal relations to one another. A sales organisation is an organisation of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling.

Introduction to Sales Organisation 2. Meaning and Definitions of Sales Organisation 3. Characteristics 4. Criteria and Principles 5. Importance 6. Structures 7. Basis for Designing Organisations.

Planning Purposes Steps in Setting up Organisation Factors Advantages Disadvantages The organisation is a mechanism to realize our objectives. Since the market conditions change, the sales organisation keeps on changing, always accommodating the necessary environmental changes.

This ensures survival as well as growth. Organisation is a structure as well as a process of putting together this structure. In organizational process, lines of authority are defined. We know who our superior is, and whom we are reporting to. The superior has the authority to direct us. We then have an obligation to him to carry out the tasks assigned. This obligation is our accountability. To ensure smooth flow, the organisation requires balance and coordination.

It should also provide for career progression and should economize on executive time. We have to first identify the expectations of the sales function, and its overall place in the total organisation. To begin with, corporate objectives are identified — both qualitative and quantitative. We then decide how to go about achieving them and at what cost.

We identify sales positions, classify them into groups, and decide the hierarchy. We then assign positions to persons. The resulting structure is evaluated in terms of its balance and flexibility. Sales organisation is used, to attain the qualitative and quantitative objectives of personal selling. These objectives are related to sales volume, profitability and market share.

Sales organisation is used not only to achieve the present objectives, but also to attain a particular future position. Sales organisation is a second priority, when a typical company starts its operations. It first concentrates on the production and financial aspects. As it evolves it keeps on evolving the production and finance departments, but somehow tends to overlook the sales function. It is kept constant without much alteration as the company evolves.

What changes is the selling style and the size of the salesforce? Sales organisation must be adapted to the changing environment. Sales organisation is a structural framework, specifying the formal authority and responsibility between persons working in the organisation. It consists of group of individuals working jointly to attain qualitative and quantitative selling objectives. Effective sales executives appreciate the importance of sound organization. In the words of C. In the words of H.

A sales organisation is an organization of individuals either working together for the marketing of products and services manufactured by an enterprise or for products that are procured by the firm for the purpose of reselling. A successful sales organization is one where the functions of each department are carefully planned and coordinated and the efforts of the individuals supervised.

A successful organisation also organizes resources towards the goal of delivering products and services in the hands of the customer for profit. Such an organization is a point of orientation for individuals for cooperative efforts aimed at establishing relationships both within enterprises and with the customers outside the organization.

A sales organisation defines the duties, roles, and the rights and responsibilities of salespeople engaged in selling activities meant for the effective execution of the sales function. This demands a coherent and unified effort of individuals in the organization for achieving a common goal.

A sales organization is designed to execute functions which go beyond just achieving sales through the department. A sales organization thus undertakes managerial functions such as the selection and recruitment of quality manpower, their induction and training for better performance, and the effective supervision of subordinates in the field force.

The organization also motivates them to stay loyal and committed to achieve organizational goals and adequately compensates them for their efforts. A sales organisation is a structural body through which the functions of sales management are carried out. A properly designed sales organization also helps in the flow of both the upward and downward communication in the organization for taking sales-related decisions.

This flow of communication within the sales organization also helps in the proper forecasting of market demand and in executing the contingency sales plan in response to competition and market changes.

A proper design also removes the duplication of efforts and enhances the productivity level of salespeople in the organization by keeping costs and expenses under control. An improperly designed sales organisation results from lack of planning, improper execution of plans, ineffective policies, lack of training and supervision, and improper coordination with other functions production, finance, materials, and human resource management.

A correctly designed sales organization, on the other hand, increases managerial efficiency as it allows the management to delegate routine jobs to lower levels and pay proper attention to strategic organizational planning and the formulation of policies. This helps to avoid the duplication of activities and confusion among subordinates, and promotes the specialization of tasks within the organization. A sales organization executes the direction and control of the sales management function.

A properly designed sales organisation also helps in conducting a job analysis by subdividing the various sales functions, which helps to identify the qualifications needed to handle each activity and accordingly appoint personnel to handle respective job responsibilities. A good sales organisation always aims at achieving the sales target at the minimum cost and with maximum efficiency.

The basic objective of an organization is to establish efficient and smooth coordination between the efforts of its employees for achieving the desired results. A sound sales organization coordinates the efforts of various departments, sub-departments, and employees for the attainment of the common objectives. In the event of expansion and growth of an enterprise, both its sales and non-sales functions increase considerably.

By setting up a separate sales organization, more attention is needed for individual functions of the sales department. A sales organization serves as the unified contact or relationship point with customers. Building a separate sales organisation allows for continuous interaction with customers to obtain valuable information about their problems, suggestions, and future demands. A sales organization is set up for achieving the desired success in selling operations, where the ability of each salesperson is utilized to the optimum level to enable successful selling operations.

A good sales organisation can contribute to the development of new ideas and innovation by encouraging salespersons to innovate with new ideas while working within the scope of their authority. A good sales organization is a reservoir of sincere, moral, and hardworking employees because the rights, duties, and responsibilities of every employee are defined and communicated.

The organisational policies, rules, and procedures governing the sales organization are laid down as the means of control and motivation. Proper supervision and control are exercised at the appropriate intervals and these are helpful not only in eliminating malpractices, but also in preventing their occurrence within the organization.

A sales organization always makes efforts to increase sales, thereby achieving the principle of profit maximization, which contributes to the overall growth of the enterprise. Sales organisation is a part of the total enterprise dealing with sales activities. It consists of a group of people engaged in selling activities. It works for the attainment of common objectives of selling. There exist formal and informal relationships between persons engaged in selling activities.

It defines the duties, responsibilities and rights of people in the selling jobs. It establishes departmentalization of selling activities separately. It is a means to the efficient execution of the sales functions and accumulation of resources to perform those functions. The success of sales organisation depends on the unified and coordinated efforts of salespersons.

The selling organisation acts under the direct control the sales manager. Before a sales organisation is developed, the management should know the criteria for setting a successful sales organization. Sales organisation should specify precisely the functions of the sales department and plan and coordinate the activities of the salespeople and superiors in a coherent manner.

Proper allocation of resources should be made with a view to reach customers with the right marketing mix. The goals are — customer satisfaction and target return on investment. Sales organizations should lead to a sales force structure that can effectively and efficiently control the sales operations. This means whatever the sales structure is, it must adequately cover the market and control the cost of selling operations.

Principles help the organization to explore market opportunities and move towards their goals. It protects the organization to stray from the pre-determined course of actions. Fundamentally, these principles are worth considering while developing a sales organization. Span of Control :. Span of control refers to the number of subordinates that a sales manager can supervise at a particular time. A narrow span of control endorses tall structures of organization with more layers of supervision where only the field salesperson can reach to the level of end users.

Depending on the span of control, a sales manager has the capacity to manage his subordinate sales staff.

Some typical evolving organization structures - Sales Management

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Sales force: 3 ways to organize your sales team

Sales reps are most effective when they have the right amount of support, but exactly how much support staff does a company need, and how should the support be structured? But get it just right, and your sales efforts can drive productivity and growth. Our analysis indicates the answer is yes. By looking at detailed sales data from 40 companies in technology-related industries, we have identified guidelines for how much and what types of sales support and management are optimal. This includes all non-quota-carrying roles in the organization: customer-facing support, sales operations and administration, and sales management. Evaluating our sample set of companies in hardware, machinery, industrial equipment, and information and communications technology, we have found a wide disparity in the amount of sales support that organizations employ. The efficiency of their sales departments, as measured by sales ROI 1 also varies widely: the top 25 percent of companies we analyzed boast a sales ROI more than twice that of the bottom 25 percent. And these top performers have a 30 percent higher level of sales support than the rest of the companies. In fact, however, most of the companies with 60 to 80 percent sales-support ratios are in the bottom 75 percent range of sales ROI. We found that devoting 50 - 60 percent of sales employees to support functions is optimal.

Advantages and Disadvantages of Different Sales Structures

Written by Emma Brudner emmajs Download our collection of org structure templates to organize your sales team. The structure of a sales force has significant bearing on its success. For example, a rep used to selling to a given region might flounder when asked to concentrate on just one industry nationwide.

How You Should Structure Your Sales Organization

A strong sales strategy is foundational to success. Maybe you are looking for growth in new market sectors, increased revenue from existing accounts or introducing new products or services. Do you have the appropriate strategy? Reviewing and creating a solid sales strategy is the first step. All too often a sales strategy is created without spending enough time consulting customers to ensure it supports their key business needs and objectives and plays to your business strengths.

Gartner Glossary

They do understand that such complex situation exists in all times, countries and industries. They fall beyond our control. Unless you are very strategic, at best, you may be Only one-ninth of the problem is above water. The shape of the underwater portion, the real challenges, can be difficult to judge by looking above the surface. The truth lies in: 1.

You are starting your business and already there are some leads coming in the pipe. You have hired a few ambitious sales reps but you are at a loss as to how to structure your sales team—We are here to help. There are a few ways to structure your sales organization. First, you can, of….

Marketing management is the organizational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises and organizations and on the management of a firm's marketing resources and activities. Marketing management employs tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter's five forces , analysis of strategic groups of competitors, value chain analysis and others. In competitor analysis, marketers build detailed profiles of each competitor in the market, focusing on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation , degree of vertical integration , historical responses to industry developments, and other factors.

Four types of structures are available to executives: 1 simple, 2 functional, 3 multidivisional, and 4 matrix Figure 9. Like snowflakes, however, no two organizational structures are exactly alike. Once a structure is created, it constrains certain future strategic moves, and supports others. While no two organizational structures are exactly alike, four general types of structures are available to executives: simple, functional, multidivisional, and matrix. Many organizations start out with a simple structure. In this type of structure, an organizational chart is usually not needed.

Are you trying to organize your sales team? Are you trying to figure out what the best sales organizational structure is or trying to identify the problem within your current structure? Determining the best way to organize your sales team is important, and we're sure that you're looking to find the most efficient sales structure. Your sales team organization matters, because it can affect the sales that you make and the revenue you bring in.