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Models For Organization Of Sales Dept.
Posted By: sillbodd on 11/27/2006 10:07 AM (CST) 130 Points
Dear all,

Could you please list for me any specific models for organizing a sales department, and models of distributing/assigning customer groups to different salesmen?

I need specific models for organizing sales and distributing clients, as well as advantages/disadvantages of a given model.

THANK YOU in ADVANCE!
BODD

Posted by: W.M.M.A. Member Response
11/27/2006 10:11 AM (CST)
You are asking for quite a project, one for which we get paid substantial dollars for accomplishing. Could we do it another way? Could you begin to create the model you believe will work within your structure, come back to us, and we will guide you through your errors and perhaps recommend a few ways to restructure for your success? How would that work?

Randall
WMMA
 
Posted by: stevea Member Response
11/27/2006 11:13 AM (CST)
Hi Bodd

I rather agree with Randall – the scope of the question is too broad to lead to an answer in a few pages here – let alone a few lines. You need to specify your market(s) and your products and the size, scope and location(s) of your company and then tell us how you want to do what you think you want to do..

If there was a “One size fits all” solution to organising a sales force, I could guarantee that 90% of the sales people that I have worked with or trained would have gone off to do something more interesting and more remunerative.

That there are almost as many sales structures as there are companies is a testament to the value of individuality in the endeavour of sales and the search for excellence in that profession.

There are some constants in this mix of variables, such as applicable sales techniques and solution selling, but these are hedged in caveats concerning the nature of the market and the process attached to winning the sale.

Even in the heyday of the IBM salesperson, it was always far from the case that in order to succeed in selling, you swallowed the sales manual, donned a blue suit with a white shirt, and thus shifted mainframes by asking questions. Likewise the internal organisation between, say Burroughs, Honeywell and ICL were utterly polar in their differences.

I look forward to hearing more from you

Yours sincerely


Steve Alker
Unimax Solutions
 
Posted by: sillbodd Author Response
11/27/2006 11:42 AM (CST)
Dear Randall,
Dear Steve,

Thank you for your rapid response. You are right, this is quite a project and I accept your idea. However, all I have managed to come up with so far is:

* I have stated that the use of CRM makes it possible to change our customer distribution/salespeople organization in a very flexible and dynamic way,
* a list of advantages for using a CRM system and
* an explanation of the fact that CRM is merely a tool for implementing the underlying philosophy for interaction with, and care for customers.
* I have also stated some critical success factors for developing and implementing a CRM system;

My question regards the sales dept. of a printing house - I am supposed to list ways (models) for structuring its sales force, and CRM is, I think only a part of what I am expected to recommend. I should also give recommendations for the composition of a winning sales dept. and specific list of functions.

The model that I believe will work in my structure:

There are four people selling at this stage. There are about 12 major clients and about 55 much smaller ones. There is a great potential to grow and develop.
I am specifically responsible for giving recommendation for ways to improve the sales dept., specifically describe the possible ways of distributing customers amongst salespeople and then recommend one or two models supporting myself with practical and scientific arguments.

At this stage I have stuck on the CRM issue and I cannot move on to the real thing - the specific models. It looks simple: clients may be either divided in groups (by e.g. size) and assigned to different salespeople, OR clients may be viewed as a general population, where each salesperson will be able to serve any customer, there will be no "Bob's customers or Mary's customers". These two have advantages and disadvantages, but is this a right way to think? Can I possibly identify more ways to distribute and organize salesforce and customers? Please have in mind this is a B2B business.
I appreciate your opinion, and I hope I will get directions that will help me get out of that "CRM box" :)
 
Posted by: W.M.M.A. Member Response
11/27/2006 2:16 PM (CST)
CRM is voodoo, if not done perfectly right. You can't sound like a phone room. You must be personable, at all times. Until you identify your company and the models you are putting forward to the client, you can not identify the client, and move forward to close those deals.

Who are you?
What are the divisions? What is the sope of work for each division? What are the goals of each division/group/person/department?

If it is real CRM, it will not matter whose customer it is, because all of the info is there. "Hi Mrs. M. this is Mary, Bob, who worked w/you last time had to step away. Are you ordering more of the blue ones this time? I'm happy to help."

Seamless CRM works, if ...you have asked the right questions, bound the client to the company...creating your brand one person at a time. Then it works.


Randall
WMMA
 
Posted by: zelvenschi Member Response
11/27/2006 2:53 PM (CST)
To organize a sales force one got to know the product, territory and possible clients. Sales can be organized in a lot of ways: size of the client, territory, type of client (automotive only for example). Always think what would be the best for you typical clients. For example if your client base is homegenous you are probably better off with the territory division. If you have a lot of clients who are more serious than other ones, you should have a sales rep that is experienced enough to deal with those.

Again everything depends on your product, clients, and geography.
 
Posted by: Frank Hurtte Accepted Answer
11/27/2006 5:27 PM (CST)
I love this question.... ( & I will bloviate and pontificate until my fingers get tired)

1) Sales departments set up by SIC code allows the sales people to develop some expertise that differentiates them from the other guys. And, allow them to move into a more consultative role. But, they need to taught to understand value and ask for referalls from within the industry.

2) Sales departments set up by geography... allows them to "own" everything as far as the eye can see.

3) Sales departments designed to fit the skills of the sales person... The old Farmer vs. Hunter story. The Hunter finds the account, opens it... the Farmer then milks the account for as much business as possible.

4) the Amway concept.. It was my account once so it will be my account forever...

5) the random... I answered the phone when the customer called so they are mine.

Things to look out for in these types of discussions.

The lucky territory syndrome. The Salesperson says...I sell car parts in Detroit so I must be a genius compared to the guy selling car parts in (say) Iowa.

The overly competitive jerk syndrome.. The Salesperson says.. I would rather loose the business for the company than to see another sales person get it.

Which of these is best? Nothing replaces good old fashioned sales management. The problem is: so few people actually have time to practice it.
 
Posted by: shghosh Member Response
11/28/2006 12:41 AM (CST)
Well- geography is used to divide sales territories simply for adhering to beat plans, understanding local psyche and coordinating below the line activites across customers. If you are looking for an org chart here is one:
http://www.fujirebio.co.jp/english/about/OrganizationChart.pdf

But for your company i wd suggest organizing acording to key Clients ( 12) and non Key clients(55).
For Sales people in charge of Key clients their deliverables will be sustaining the volume of business got.
For Sales people in charge of non KCs will be more BD work- their deliverable will be incremental business brought in.

However organizations have a way of thanking only Key Client handling employees and not the BD guys. Rewards and Recognition need to be equally distributed amongst all.


 
Posted by: gkrastev Accepted Answer
11/28/2006 4:36 PM (CST)
With the geographical distribution - you may encounter some problems - what happens if most of your highly prospective clients are located in one location and a specific salesman is assigned to them ? This may decrease the motivation of the other personal in the sales department - and in addition you will have troubles when you consider the rewards your salesman would receive.

Whatever structure you choose - it will have to be supplemented with good method for performance evaluation if you want your sales team to be effective.
 
Posted by: Frank Hurtte Member Response
11/28/2006 11:12 PM (CST)
shghosh
I like your organizational plan, but there can be issues with the salesperson who happens to have the "lucky geography" that is rich in clients...

This is especially true with distributor organizations in the United States....
 
Posted by: stevea Accepted Answer
11/30/2006 4:21 AM (CST)
You’ve got one thing right – CRM is a way of doing business, it is not a software system. That said, as a CRM software consultant, it is the very devil’s own job to get clients to move along from “How much does the software cost, how much to install, how much to configure, how much to integrate and how much to train our people?” In the process of haggling over the cost, they usually totally lose sight of what they want CRM to do, if they ever knew in the first place.

You should never, ever shape your sales structures round CRM software. The process is the other way round. Likewise, you should not seek out markets to suit your sales team (Unless that is you have inherited a sales team that has nothing to do!) The profit principal of CRM is that if you know what a customer wants or is likely to want, then you can both communicate your offerings to them at the most appropriate time and develop products or services in which they have already expressed an interest. The theory is that by capturing the vital information on what they want and what they will want, selling becomes easier because you are offering something to a company that is almost waiting to buy from you.

Of course, the closeness this achieves cuts both ways. If you screw up on this in a minor way, the levels of expectation you have engendered in your customer will result in a disproportionate level of dissatisfaction. Hence the need to see the software as the tool to help the sales people do their job properly and professionally. If “IT” starts taking over, for a number of reasons, you are doomed to failure, so again, your desire to arrive at a customer facing sales structure which works and works optimally is well balanced.

So what structure will be appropriate? With 4 people involved in selling, 12 major clients and 55 smaller ones, you need to ask yourself some basic questions. But before we go there, this idea that CRM removes ownership of an account might not be true. If a client has bought from you it is likely that they have also “bought” the person who sold to them in the fist place. Product sales are still a people business and people buy people first! The customers may have been moved on to an account executive, with whom, all being well, the relationship will prosper, but they are not likely to become purchasers of items in a catalogue, even if it is your catalogue. In other words, they still need nurturing and they need the skills a good sales person will bring to their business.

Prices are not givens and a repeat order can never be taken for granted. Here the strengths of the CRM system are that in conjunction with a CRM culture, it will bring together the customer’s experiences into one place, so that telephone comments to internal sales, web site visits, customer service cases and visits can all be logged and acted on, preferably by a human being, a sales person in a timely and efficient manner but also with that empathic approach which will turn an enquiry into an order and a price objection into a useful negotiation. So whilst the customers will find it advantageous to have their questions in general answered by anyone in the company because they have access to the information, the negotiations for a new or repeat contract are still likely to be one-to-one or at least headed up by an account manager and involving other team members as appropriate. The CEO of a major account isn’t likely to be impressed by the fact that your CRM system will allow Doris from reception to take his $5M order!

It’s back to structures and those questions. How much time and effort do your 4 sales people need to spend on the 12 major and 55 minor accounts in order to bring in your planned level of business? What exactly do they need to do to achieve this? What phone calls, visits, quotations, presentations, pitch and so on will be needed to bring home the bacon? (Old English phrase referring to cured pig which for some reason means earning money) If you can quantify this, you will be part way to seeing the evolution of a structure and part way to discovering that sales people apparently spend most of their time NOT selling.

Before considering how to distribute your existing accounts, you need to determine just how much sales activity, time, effort and resources (including the budget) you expect to spend on developing totally new business and new types of business from existing clients. It would be nice to think that you could move some minor accounts into major ones, but the size of a particular client’s company may well dictate that this is not possible. Once you have established how much sales time will be needed to ensure that existing business is retained and where possible is grown, the remainder of the time can be spent developing new accounts. This will lead to a number of criteria which might influence how you distribute your existing business and how you assign the task of bringing in new accounts. Remember that some of your people will be adept at account work and some will be suited to NBD (New Business Development)

There will also be the possible issue of Geography, where if client visits and presentations are needed to advance and close sales, you will need to base the allocation of clients to sales territories which will facilitate the effective and repeated coverage of the client base and the prospect bank as their needs demand. Some major accounts might demand that they are visited 12 or 24 times a year in order to ensure the continuation of their business. Some may find that level of contact intrusive and therefore detrimental to sales. Fortunately your CRM policy aided by your CRM software will guide you in this.

For NBD to be effective, It needs to be backed by an appropriate level of marketing. Unless you want your sales team to be banging their heads against the brick wall of cold calling or the yellow pages, you need to feed them leads. OK they will be expected as are all sales people, to prospect on their own account with referrals and intuitive approaches, but without warm leads they will be wasting a lot of their time. Again, the choice of how you divide this work is down to who can carry it out best. Account sales people who have never had to suffer from the levels of rejection experienced in NBD might find it rather brutal. On the other hand, a NBD professional, (to whom a “Get Lost” simply equates to another $50 in their commission pot because they have the confidence to know that one in six calls will be to a company where viable business which is worth pursuing,) might take fright on the closing negotiations on a large deal where they know that a $3M order is at stake representing 20% of their company’s turnover.

Only you can answer these points, but if you take the whole exercise down to the basic task of answering these questions, you will come up with one of the many “right” answers.

1) What do we need to do, in terms of actions to meet your fiscal targets?
2) Under any division of labour, precisely what actions do the individual sales people have to carry out to meet their individual targets?
3) What support do they need to achieve these targets and what budget is needed to sustain it?


If you do that lot, you will be well on your way to becoming a sales and marketing director, so good luck.

Steve Alker
Unimax Solutions
 
Posted by: Frank Hurtte Member Response
11/30/2006 8:31 PM (CST)
Once again, I am humbled by Mr Alker....

The comment about Targets in #3 remind me of an recent study.. Companies who invest time in creating a target list...
Who makes the best customer?
What are their attributes?
What best describes them before we meet them?

Are 47% more effective than the average company.
 
Posted by: sillbodd Author Response
12/3/2006 4:58 AM (CST)
Dear all,

I want to hereby thank you for all you responses. They have all been useful, however, I had to select only a few of them.

I wish you all the luck and success you can get in life (not just work:) and I hope I can be helpful to you soon.

All the best: SILLBODD
 


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