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Organising and Staffing
the Sales Force
Eagles don’t flock. You
have to find them one at
a time.
Yogi Berra
5
1
Session Objectives
Concepts of the sales organisation
Basic types of sales organisations
Alternative organizational approaches
To determine the size of the sales force by using various
methods
Sales force staffing processPlanning
Recruiting
Selecting
Hiring
2
7-3
Areas Impacted by a Firm’s Sales
Force Structure
Concepts of Sales Organisation
The basic concepts of the sales organisation are:
• Degree of centralisation
• Degree of specialisation
• Span of control
• Line or staff positions
• Market orientation
• Effective co-ordination
4
Sales Force Specialization Continuum
Specialists
Certain selling
activities for certain
products for certain
customers
Generalists
All selling activities
and all products to
all customers
Some specialization
of selling activities,
products, and/or
customers
5
Tall Sales Organization
National Sales
Manager
Span of Control
Managem
ent L
evels
Branch
Sales
Manager
Branch
Sales
Manager
Branch
Sales
Manager
Branch
Sales
Manager
Branch
Sales
Manager
Branch
Sales
Manager
Regional Sales
Manager
Regional Sales
Manager
Span of Control vs. Management Levels
6
7-7
Span of Control
Span of control: number of individuals that report directly to a
sales manager
Customized customer solutions result in narrower spans of
control
Routine trade sales and telemarketing activities allow broader
span of control
Span of Control Ratios (Rep:Manager)
National Sales Manager
Regional Sales Managers
Branch Sales Managers
Product Manager
Sales Training Managers
District Sales Managers
Staff Position
Line Position
Line vs. Staff Positions
8
Customer and Product Determinants
of Sales Force Specialization
Simple
Product
Offering
Complex
Range of
Products
Customer Needs Different
Customer Needs Similar
Market-
Driven
Specialization
Product/Market-
Driven
Specialization
Geography-
Driven
Specialization
Product-
Driven
Specialization
Selling Situation Contingencies
9
Geographic Sales Organization
National Sales Manager
Branch Sales Managers (4) Branch Sales Managers (4)
District Sales Managers (20)
Salespeople (100) Salespeople (100)
District Sales Managers (20)
Eastern Region Sales Manager Western Region Sales Manager
Sales Training Manager
10
Product Sales Organization
National Sales Manager
Office Equipment Sales Manager Office Supplies Sales Manager
District Sales Managers (10)
Salespeople (100) Salespeople (100)
District Sales Managers (10)
11
Market Sales Organization
National Sales Manager
Zone Sales Managers (4)
District Sales Managers (25)
Salespeople (150)
District Sales Managers (5)
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Sales Training
Manager
Salespeople (50)
12
Functional Sales Organization
National Sales Manager
Field Sales Manager Telemarketing Sales Manager
Regional Sales Managers (4)
Salespeople (160)
Salespeople (40)
District Sales Managers (2)
District Sales Managers (16)
13
Comparison of Sales Organization Structures
Organizational
Structure Advantages Disadvantages
Geographic
• Low Cost
• No geographic duplication
• No customer duplication
• Fewer management levels
• Limited specialization
• Lack of management
control over product or
customer emphasis
Product
• Salespeople become experts
in product attr. & applications
• Management control over
selling effort
• High cost
• Geographic duplication
• Customer duplication
14
Comparison of Sales Organization Structures
Market
• Salespeople develop
better understanding of
unique customer needs
• Management control over
selling allocated to different
markets
• High cost
• Geographic duplication
Functional• Efficiency in performing
selling activities
• Geographic duplication
• Customer duplication
• Need for coordination
Organizational
Structure Advantages Disadvantages
15
Hybrid Sales Organization Structure
National Sales Manager
Major Accounts
Sales Manager
Regular Accounts
Sales Manager
Office Equipment
Sales Manager
Office Supplies
Sales Manager
Field Sales
Manager
Telemarketing
Sales Manager
Commercial Accounts
Sales Manager
Government Accounts
Sales Manager
Western
Sales Manager
Eastern
Sales Manager
16
Telemarketing
Customer contacts using telecommunication without
face to face contact.
Very cost-effective especially for smaller customers.
Cost per sales call around 6 to 8% of face to face
sales call.
Scope of telemarketing:
Prospecting and Lead Qualification.
Customer Service.
Smaller accounts.
Promotion Support
17
Telemarketing
Advantages
• Low cost per sales call
• Profitably serve small to medium customers
• Speed/time saving of telephone ordering
Challenges
• Acceptance by field salespeople
• Hiring the right person for the job
• Motivation and retention due to number of calls and lower salaries
• Do Not Disturb clause
Independent Sales Agents
Business entity contracted to perform the business of
selling in a given geographic area.
Do not take physical possession or ownership of the
products and are on commission basis.
Normally handle five to eight non-competing but
related products.
Major factors for decision are:Economic Consequences since there are no fixed costs
Management Control over agent’s time and process
Market Conditions – most suitable for new products or new
markets
19
Market Factors favouring DSAs
Fragmented Market
Decentralised Buying
Few Products
New Markets
For smaller lesser known companies
Short selling cycles and small value orders
No need for strong management control on sales process
No need for customer data base
20
8-21
5 Steps of a Comprehensive Recruiting
and Selection Process
Determine the number of salespeople needed1
Identify unique skills, knowledge, and attitudes salesperson needs2
Attract sufficient number of applicants3
Conduct interview process that accurately assesses qualifications4
Offer position to one or more applicants5
22
Recruitment and Selection Process
• Establish responsibility
for recruitment
• Determine number of
people wanted
• Company Culture
• Job Analysis
• Job Qualifications
• Job Description
• Recruitment &
Selection Objectives
• Recruitment &
Selection Strategy
• Internal Sources
• External Sources
• Screening Resumes
and Applications
• Initial Interview
• Intensive Interview
• Testing
• Assessment Centers
• Background
Investigation
• Physical Exam
• Selection Decision
and Job Offer
Planning for
Recruitment & Selection
Step 1
Recruitment: Locating
Prospective Candidates
Step 2
Selection:
Evaluation and Hiring
Step 3
23
Planning for Recruitment and Selection
Job Analysis:
Entails an investigation of the tasks, duties, and
responsibilities of the job.
Develop a statement of job qualifications
describing the personal traits and abilities to
perform in the job
Who should do the job analysis?
Current occupants of job
Sales Mangers
HR department through
observation
Planning for Recruitment and Selection
Job Description
A written summary of
the job containing the
job title, duties,
administrative
relationships, types of
products sold, customer
types, and other
significant requirements
like hiring qualifications.
Job Qualifications
Refers to the aptitude,
skills, knowledge,
personal traits, and
willingness to accept
occupational conditions
necessary to perform
the job.
24
25
DESIRABLE CHARACTERISTICS
Mental capacities (Problem solving, planning)
Physical characteristics (appearance, neatness)
Experience (Sales and other business experience)
Education (Degrees, Specializations)
Personality traits (Persuasiveness, adaptive)
Skills (Communication, inter-personal)
Socio-environmental factors (Interests, Activities,
Memberships)
26
Ten traits and abilities of top salespeople
Trait Related Ability
Ego strength To handle rejection
Sense of urgency To complete the sale
Ego drive To persuade people
Assertiveness To be firm in negotiations
Willingness to take risks To be innovative
Sociability To build relationships
Abstract reasoning To sell ideas
Sense of skepticism To question, to be alert
Creativity To sell complex products and ideas
Empathy To understand customer needs
Source: Erika Rasmusson, “The 10 Traits of Top Salespeople, “ Sales & Marketing Management, August 1999, pp. 34-
37.
27
Sources of Sales Force Recruits
Current
company
employees
Employment
Agencies
The
Internet
Educational
Institutes
Referrals
Recruiting
SourcesPart Time
Workers
Advertisements
Other
Companies
Also from job fairs
28
Recruiting Sources of Sales Reps
Source Comment
Referrals Advantage of known person. This is also rewarded
Current EmployeesThey are known and know the company and the
products
Other CompaniesEspecially competitors, suppliers and customers
know your company and products
The InternetWeb page recruiting; Internet recruiting sites;
Resume search services
Educational Institute Cost effective; building relationships
Advertisements Maximum response and cost; quality questionable
Employment Agencies Advantage of initial screening
Part time workers Specialist companies like MAFOI
Voluntary applicants Unsolicited applications
29
Recruiting Evaluation Matrix
Evaluation Criteria
Consistent
with
strategic
planning?Number
recruits
Number
hired
Percent
retained
after 3
yearsCost Frequency
of use
Rep’s per-
formance
after 2 yrs.
Recruiting
sources
Within company:
Sales force
Other departments
Competitors
Customers
Noncompetitors
Educational institutions
Advertisements
Employment agencies
Voluntary applicants
Computerized databases
Other companies:
8-30
Model for Selecting New Salespeople
Application Forms
Personal Data Forms help companies get
information on candidates in a structured manner.
31
Personal Experience Physical Environmental
NameWork
Ability to
perform job
related
physical
activities
Membership in
social and
service
organisations
Address and Phone
Reason for seeking
particular job
EducationPersonal Goals Hobbies and
InterestsReferences
32
Interviews
Types of interviewsInitial Interviews
Intensive Interviews
Stress Interviews
LocationsCampus
Recruiter’s Location (i.e. Plant Trip)
Neutral Site
Telephone
33
Personal Interviews
Most preferred for hiring of sales personsAnswers the following questions:
Is this person capable of excelling at the job?Is he really interested in this job?Will the job help in his goal realisation?Will he work to his full ability?
As much a tool for testing candidate’s past and working out his future plans as selling the position and company to the recruit
34
Personal InterviewsStructured interview
applicants are asked the same predetermined questionspotential weakness is that interviewer may fail to identify or probe a candidate’s unique qualities or limitations
Unstructured interview induces free discussion on wide ranging topics may yield unexpected insight requires experienced interviewers with interpretative skills
8-35
Other Interviews
Stress interview: places the applicant in
unstructured situation to see how well he/she
performs
Group interview: group of applicants placed in a
group or open forum and encouraged to ask
questions
Panel interview: placing a single applicant before a
panel of company representatives
Field observation: applicant travels with rep making
calls on current and potential clients
36
Suggestions for Improving Interviewing
Effectiveness
Have specific job specifications and qualifications
clearly in mind
Establish specific interviewing objectives
Provide some degree of structure
Allow adequate time
Be very familiar with application or resume information
Use standardized rating sheets after each interview
Use multiple interviews
Provide training and practice for the interviewers
Use the interview as an opportunity to learn more about
the candidate as well as to sell your company
37
An Excerpt from Xerox Campus Interview-
Evaluation Report
EVALUATION
(Circle Level)
(Does Not Meet
Xerox Standards)
(Meets Xerox
Standards)
(Exceeds Xerox
Standards)
Aggressiveness and
Enthusiasm1 2 3 4 5
Communication Skills 1 2 3 4 5
Record of Success 1 2 3 4 5
Rational Thought Process 1 2 3 4 5
Maturity 1 2 3 4 5
Overall Evaluation 1 2 3 4 5
Summary of Applicant’s Qualifications
Apparent Strengths:
Apparent Weaknesses:
Areas Requiring Clarification:
38
Testing: Value and Types
ValueMay be used to assist with initial screening
May indicate compatibility with job
responsibilities
May indicate compatibility with
organization’s culture and personnel
TypesPersonality
Intelligence
Psychological
Ethical Framework
39
Testing: Guidelines for Using
Use tests that have been based on a job
analysis for the particular job in questionDo not base the hiring decision solely on test resultsSome creative and talented people may deviate from expected normsIntelligent and “test-wise” individuals may be able to manipulate resultsSome tests may discriminate against people of different races, genders, et al – thus becoming illegal
40
Background Check
Be wary of first-party
references
Radial search referrals
might be used
Use an interview
background check
Use the critical incident
technique
Pick out problem areas
Obtain a numerical scale
reference rating
Identify an individual’s
best job
Check for idiosyncrasies
Check financial and
personal habits
Get customer opinion
41
Selection Decision and Job Offer
Evaluate qualifications in order of importance
Look for offsetting strengths and weaknesses
Rank candidates
If none meet qualifications, may extend
search
May have to offer market bonus (signing
bonus) to highly qualified candidates
42
Physical Examinations
Sales jobs require sound basic health, stamina and the physical ability to withstand stressCaution should be exercised in requiring medical examinations and other specific tests for such things as drug use or the HIV virusA physical exam can be performed only after extending a job offerManagers deem using a standard physical examination for all positions ill-advised
8-43
Making the Job Offer
Contact via phone
Follow up with first-class letter containing formal offer
of employment
IncludeDeadline for accepting the position
Info about responsibilities
Starting salary
Allowable moving expenses
Formal training dates
Time before first performance review
When rep will first be eligible for a raise
Number of vacation days
What Do Sales Candidates Want
to Know?
Sales candidates ask themselves
How financially healthy is the recruiting firm?
What is the firm’s track record?
What are their opportunities?
What will it take to succeed?
What is a realistic first-year income?
Is the product something customers want to buy?
Does the selling firm support sales efforts?
Is there a commitment to employee development?
8-44
Based on: Jeremy Cohen, “Natural Select-ion,” Sales & Marketing Management, September/October 2008, 26-27.
8-45
Avoiding Common Hiring Mistakes
Don’t Rush to Hire
Wrong rep hired
Backgrounds not diverse
Conduct Proper
Job Analysis
Identify essential skills, knowledge, and activities that new hire should possess to succeed
Generate Enough
Applicants
Have a large enough group of qualified individuals from which to select best applicants to interview and hire
Plan the Interview
Don’t interview “off the cuff”
Coordinate multiple interviewers
Conduct Thorough
Interview
Too often, sales mgrs ask a few questions and think their experience as a rep allows them to make accurate hiring decisions on the spot
Complete
Background Check
Up to 20% fabricate facts and accomplishments
Failing to check increases likelihood of hiring someone with dubious character
Next Session
AJAX CaseDeliverables
Single Sheeter by all students
Presentations by each group
Reading
Chapter 8
46