Skip to content

8.5.1 Designing Effective Sales Force

Designing a sales force requires a structured approach to align with business objectives, strategies, and operational needs. Below is a comprehensive guide to the key steps involved in designing an effective sales force.

1. Define the Objectives

  • The first step is to establish clear objectives for the sales force. These objectives define the tasks and responsibilities of the sales team.
  • Common objectives include:
    • Gathering Information: Collect market intelligence and customer insights.
    • Targeting: Identifying and focusing on the target market or customers.
    • Communication: Engaging with customers to promote products or services, especially in B2B scenarios.
    • Selling: Closing deals and generating revenue.
    • Servicing: Providing after-sales service to ensure customer satisfaction.
    • Resource Allocation: Managing resources like merchandise and promotional budgets effectively.

2. Sales Force Strategy

  • Determine the type of sales force you need:
    • Direct Employees: Full-time staff who are closely integrated into the organization.
    • Contractual Sales Force: Temporary or part-time salespeople hired for specific tasks or time periods.
  • Strategy considerations:
    • If the focus is primarily on communication (e.g., promoting products), a mix of direct and contractual sales force may suffice.
    • If the sales force is expected to perform multiple tasks (e.g., targeting, selling, and servicing), a greater proportion of direct employees may be necessary.

3. Sales Force Structure

  • Define how the sales force will be organized, depending on the strategy:
    • Geographic-Based Structure:
    • Divide the sales force by regions (e.g., north, south, east, west).
    • Useful for businesses with wide geographic coverage.
    • Product-Based Structure:
    • Assign salespeople to specific products or product lines (e.g., sales force for TVs, washing machines, laptops).
    • Suitable for businesses with diverse product portfolios.
    • Service-Based Structure:
    • Focus on specific services (e.g., hospital sales force for weight-loss surgery, kidney care, or spine treatments).
    • Common in service industries like healthcare and beauty.
    • Customer-Based Structure:
    • Organize by customer needs (e.g., travel sales force for honeymoons, family vacations, or adventure travel).
    • Ideal for businesses catering to niche customer requirements.

4. Determine the Sales Force Size

  • Decide the number of salespeople required based on:
    • Annual Sales Volume: Estimated revenue targets and workload.
    • Customer Reach: Determine how many customers need to be contacted and how frequently.
    • For instance, to acquire 1 lakh customers, you may need to reach 10 lakh prospects.
    • Sales Activities: Consider the number of interactions required for each customer (e.g., meetings, calls, emails).
  • Create a funnel:
    • Estimate the number of customer interactions.
    • Align the required interactions with sales personnel availability and capacity.
  • This step requires balancing the budget, customer coverage, and revenue expectations.

5. Sales Force Compensation

  • Develop a compensation plan to attract and retain top talent while motivating performance.
  • Key components:
    • Fixed Salary: Provides income stability.
    • Variable Pay: Incentives linked to performance (e.g., commissions, bonuses).
    • Allowances and Benefits:
    • Expense allowances for travel, meals, etc.
    • Benefits like healthcare, retirement plans, or training opportunities.
  • Types of compensation plans:
    • 100% Salary: Fixed pay with no commission.
    • Salary + Commission: A mix of guaranteed income and performance incentives.
    • Commission Only: Pay based entirely on sales performance.
  • Considerations:
    • Align compensation with the sales force type (direct vs. contractual) and their tasks.
    • The objective is to ensure talent retention and long-term commitment.

Summary

Designing the sales force involves aligning the objectives, strategy, structure, size, and compensation to create a cohesive team that meets business goals. Each step builds upon the previous one to ensure an efficient and effective sales force that can: - Target and engage customers. - Deliver value to both the organization and its clients. - Achieve long-term business success.

Ask Hive Chat Chat Icon
Hive Chat
Hi, I'm Hive Chat, an AI assistant created by CollegeHive.
How can I help you today?