Organizing and

Staffing the
Salesforce
Dr Mallika Srivastava

Concepts of Sales
Organisation
A sales organisation assists the sales
manager to carry out needed tasks
efficiently and effectively to achieve
results
The
basic
concepts
of
the sales
organisation are:

Degree of centralisation
Degree of specialisation
Line or staff positions
Market orientation
Effective co-ordination
Span of control

Factors Influencing
Structure
Product and services-related factors
Organization-related Factors
Marketing Mix-related factors
External Factors

Basic Types of Sales

Organisations
Sales organisations are generally classified
into four basic types:
Line Organisation
Line and staff organisation
Functional organisation
Horizontal organisation

Line
Organisation
Head
Marketing
Sales
Manager

Area Sales
Area Sales
Area Sales
Area Sales
Manager1
Manager2
Manager3Manager4
salespeople
salespeople
salespeople
salespeople
Characteristics: All managers have line authority to direct and
control subordinates. Used in small firms / departments
Advantages: Simple organisation, clear authority, quick decisions,
low cost
Disadvantages: No support to line managers from subordinates
who have specialised knowledge / skills. Less time for planning /
analysis

Line and Staff

Organisation
Head-Marketing
Customer Service
Promotional
Marketing Research
Sales Manager
ManagerManager
Manager
Area Sales
Manager-1

Area Sales
Manager-1

Area Sales
Manager-1

Salespeople Salespeople Salespeople

Characteristics: Specialist staff managers are available for senior
marketing / sales managers. Staff managers role is to assist / advise
line managers. Used in medium and large size organisations
Advantages: Better marketing decisions, superior sales performance
Disadvantages: High cost and coordination, slower decision making,
conflict may arise if staff managers role is not clear

Functional
Organisation
Head-Marketing
Customer Service
Marketing Research
Promotional
Sales Manager
Manager
Manager Manager
Area Sales Manager #4
Salespeople
Characteristics: Each functional specialist has line responsibility over
salespeople. Used by a large firm with many products / market
segments, minimising line authority to functional managers
Advantages:
administer

Qualified

specialists

guide

salesforce,

simple

to

Disadvantage: confusion due to more managers giving orders to

salesforce

Horizontal
Organisation
Research & Design
Team:
Customer Research
Product / Service
Design

Operations Team:
Production /
Operations
Quality Assurance
Systems
Engineering

Planning Team:
Strategic Planning
Accounts, Finance
HR, Administration
Chief Operation
Officer

Customer Support
Team:
Information
Service
Training

Customer
Satisfaction Team:
Sales & Marketing
Pricing, Promotion
Channels, Logistics

Characteristics: Removes management levels & departmental

boundaries. Except planning team, all others are members of
cross-functional teams. Used by firms having partnering
relationships with customers.
Advantages: Reduction in supervision, unnecessary tasks, &
cost; Improved efficiency and customer responses.

Specialisation within Sales

Organisation

Needed to increase effectiveness of

salesforce
Done
by
expanding
basic
sales
organisation
Basis of specialisation

Geography
Type of product
Market
Combination of above

Criteria for selection (1) meeting

customer needs, (2) nature and number of
products, (3) abilities of sales force, (4)
selling costs.

Geographic
Specialisation

Head-Marketing

Marketing Research General Sales

Customer Service
Promotion
Manager
Manager
Manager
Manager
Branch SalesBranch SalesBranch SalesBranch Sales
Manager-1 Manager-2 Manager-3 Manager-4
Salespeople Salespeople Salespeople Salespeople
Characteristics: salespeople, assigned geographic areas, are responsible
for all selling activities to all customers within assigned areas. Branch
sales managers adjust marketing plan to local needs
Advantages: Better market coverage and customer service, more control
over salesforce, quick response to local conditions & competition
Disadvantages: Limited specialisation of marketing tasks. Hence, it is
combined with product / market sales organisation

Product
Specialisation

Used when the company has many products and / or brands

Two types of product specialisation

(x). Sales organisation with product specialised salesforce
(y). Sales organisation with product managers as staff specialists

Head-Marketing
Marketing Research
General
Promotion Sales Training
Manager
Sales Manager Manager Manager
Area Sales Managers
Area
Sales Managers
Product Group A Product Group B
Salespeople
Salespeople
Product Gr. A Product Gr. B
Fig. x Sales Organisation with product specialised salesforce

Product Specialisation (Continued)

Head-Marketing
Marketing Research
Promotion General
Product Manager
Product Manager
Manager
Manager Sales Manager
Product Gr. A
Product Gr. B
Area Sales
Managers
Salespeople

Fig. y Sales Organisation with Product Managers as

Staff Specialists
In fig. x: Characteristics: Salespeople in each product group sell only the
products in that group
Advantage: Each product gets specialised attention from the salesforce
Disadvantage: Sometimes, more salespeople contact the same customer,
resulting in customer dissatisfaction and higher cost
In fig. y: Characteristics: Each product manager plans and implements
marketing plan, for a product group
Advantage: Corrects the problem of duplication calls on a customer by
salespeople
Disadvantage: Lack of product specialisation by salespeople

Market
Specialisation
General Sales

Manager
Sales ManagerSales ManagerSales ManagerSales ManagerInternationalConsumer Markets
Commercial Government
Markets
Area SalesArea
MgrsSales ManagerArea Sales ManagerArea Sales MgrsInternational
Commercial Government Consumer Markets
Sales Executives
Salespeople Salespeople Salespeople

Characteristics: Desirable when customers are classified by type,

user industry, or channel. Salespeople carry out all activities for all
products only for specific customer groups

Advantages: Meets needs of specific customer groups, implements

customer-centred philosophy of the company

Disadvantages: Geographic duplication, high cost

Combination Sales
Organisation
Director Sales
& Marketing
General Manager
General Manager
General Manager
General Manager
Sales - North Sales - East Sales - WestSales - South
Regional Sales
Regional Sales Regional Sales
Mgr. Govt.
Mgr. - Dealers
Mgr. - Commercial
Salespeople Salespeople Salespeople

Characteristics: Many firms use some combination of

specialisation organisations, called hybrid or combination
sales organisation, with a view to minimise disadvantages
and maximise advantages of specialisation organisations

Figure above shows combination of geographic and market

specialisations

Management of Major / Key

Accounts

Also called house, global, or national

accounts / customers.
They have high sales & profit potential.
They may expect superior service, low
prices, strategic relationship.

How to manage key accounts?

Objective: Sole / preferred supplier
Strategy

Appoint key account manager

Team selling and superior service
Strategic collaborative relationship

Create a special sales organisation

Emerging Organizational
Designs
Agency and distribution selling
Shared selling Force
Telemarketing
Total quality Management (TQM) and Team
based selling

Size of the
Salesforce
How many salespeople needed (or
salesforce size) to achieve a firms sales
and profit objectives is a key decision
Methods available to decide optimum
salesforce size are as follows:

Workload
Sales potential (or breakdown)
Incremental

Workload
Method

Assumption: All salespeople have equal workload

Steps involved to calculate salesforce size are:
1) Classify customers as per their sales potential
2) Decide time per sales call and call frequencies for
each class of customers
3) Calculate total market workload = (1) x (2) in
hours
4) Decide total work time available per salesperson
5) Divide total work time available by different
activities per salesperson in hours
6) Calculate total number of salespeople needed

total market workload (3)

total selling time available per salesperson (5)

Workload Method (Continued)

Advantages: simple method, conceptually sound, used

for all types of selling situations
Disadvantages: Neglects sales productivity & salesforce
turnover

Sales Potential / Breakdown Method

The formula used is:

, where
S
N (1 T )
N=Number of salespeople
P needed, or salesforce size
S=Annual sales forecast for the company in value (Rs.
Million)
P=Estimated productivity of the average salesperson in
sales (Rs. Million)
T=Estimated percentage of annual salesforce turnover
Advantages: Simple and straight forward
Disadvantages: Conceptually weak; lead time needed
for a new salesperson to reach average productivity

Incremental
Method

It is based on marginal analysis theory of

economics
Basic concept: Net profits will increase when
additional salespeople are added, if the incremental
sales revenues exceed the incremental costs
Merit: Conceptually accurate, as it quantifies
relationships between salesforce size, sales, costs,
profits
Demerit: Can not be used if historical data on sales
and costs are not available

Salesforce
Staffing
of the most challenging

It is one
and
important responsibilities/activities of sales
management
Salesforce Staffing Process includes following
stages:
Planning
Recruiting
Selecting
Hiring
Socialization

Challenges in Sales Force Selection

Determination of characteristics that
differentiate candidates
Measuring these characteristics
Evaluation of the motivation level of the
candidates
Aculturization

Planning
Stage

It consists of three steps:

Establish responsibility for staffing process
Decide number of salespeople needed
Outline the type of salespeople needed
Establish responsibility for staffing process
Company management decides responsibilities
for various stages / activities of staffing process
Generally in a medium / large size company,
middle and senior levels H.R. and sales
managers are responsible
Proper coordination needed between sales,
marketing, and HR executives

Planning Stage (Continued)

Decide the number of salespeople
needed

Steps followed by each territory sales manager to

plan requirement of sales people:
1) Decide optimum salesforce size (using methods
discussed earlier)
2) Add number of promotions, retirements, transfers
out, terminations, resignations expected from
existing salespeople
3) Subtract expected transfers into the territory and
existing salesforce
4) Make a total of new salespersons needed
Territory sales managers submit their requirements
to national / general sales manager, who calculates
the total number of new salespersons to be hired

Outline Type of Salespeople

Needed
The steps involved in the process are:
Conducting a job analysis
Preparing a job description
Developing job qualifications / specifications

Conducting a Job Analysis

It is done by a person from sales / H. R.
department, or a consultant. It consists of two
tasks:
(1) Analyse environment in which the
salesperson would work E.G. nature of
customers, competitors, products.
(2) Determine duties and responsibilities of the
salesperson. Obtain information from sales
managers, customers, etc.

Preparing a Job
Description

It is a written document developed from the

job analysis
The detailed job description is a useful tool
for
recruiting,
selecting,
training,
compensating, and evaluating salespeople
Some of the points it generally covers are:
Job title, reporting relationship, types of
products / services sold, types of customers,
duties and responsibilities, location and
geographic area to be covered

Developing Job Qualifications /

Specifications

These are generally based on job description

Job
specifications
/
qualifications
include
education,
sales
experience,
skills,
and
personality traits
Many studies done, but no generally accepted job
qualifications for selecting salespeople, due to
many types of sales jobs
Some methods used for developing job
specifications are as under:
Study job description. Useful for a new company
Analyse personal histories of salespersons
Ask customers

Recruiting
Salesforce

Recruiting include activities to get individuals who

will apply for the job

The general purpose of recruitment is to get

enough qualified candidates, to enable company
select the right persons

H.R. and sales managers must update information

on government employment regulations

Recruiting
activities:

stage

process

includes

following

Finding the sources of sales recruits

Evaluating and selecting recruiting sources

Contacting
source

candidates

through

the

selected

Finding the Sources of Sales

Recruits

For identifying prospective candidates, firms use

internal and external sources. They include:
Internal Sources

Employee referral
programmes
Current employees
Promotions and transfers

External Sources
Advertisements in
newspapers and journals /
magazines
The Internet (job sites)
Educational institutions
Employment agencies
Job fairs
Other companies

Evaluating and selecting Recruiting

Sources

Recruiting sources are evaluated based on the

database built over number of years
Evaluating factors are:
Performance rating of salespeople, after 2 years
working
Percentage of salespeople retained, after 2
years working
Total cost of recruiting
Selecting most effective source of recruiting at
least cost
For a new company, selection depends on cost
Contacting candidates through the selected
source is done by H. R. department

Selecting
Salesforce

Selection process consists of seven major

selection steps / tools
Companies differ in using selection tools,
depending on expenditure budget and time
available
Major selection tools / steps are:
Screening resumes
Application blank
Initial interview
Intensive interview
Testing
Reference check
Physical examination

Screening Resumes

It is done when the company receives many resumes

This step / tool not required, if somebody else like
employment agency does initial screening
Initial screening of resumes are done by comparing
with job specifications

Application Blank

Widely used, it is a methodical way of collecting

relevant information from the applicant
Advantages of using application blank (also called
formal application form) are:
(1) Easy comparison of many applicants
(2) Useful for asking question during interview
sessions

Intervie
ws

Widely used selection tool

A good predictor of the candidates performance
Initial interviews are used for screening
candidates
Intensive interviews are conducted to get indepth
view of candidates
Interview structure / type of interviews:
Structured / patterned / guided interviews
Unstructured
/
non-directed
/
informal
interviews
Semi-structured interviews
Behaviour and performance based interviews
Stress interviews
Purpose is to decide a candidates fitness for a
job

Testin
g

Many firms use tests as a selection tool EG P&G, IBM

Purpose of testing: To find whether applicants have
traits / characteristics that lead to success in sales job
Type of selection tests:
Aptitude tests measure ability for selling and
learning
Intelligence tests find out mental intelligence or
intelligence quotient (IQ)
Interest tests find out level of interest in a sales
career
Knowledge tests measure knowledge of products,
markets, etc
Personality tests find out attitude or traits like
empathy, self-confidence
Tests must have reliability and validity
Tests should be one of the selection tools and not the
only tool

Reference Checks

They are important due to possibilities of resume frauds

and false personal information
They are done by letters / e-mails, telephones, or
personal visits
Instead of candidates references, previous employers /
customers to be included for reference checks

Physical Examination

Objective is to find a physical problem that may prevent

job performance of an applicant
Most companies want their prospective employees to
undergo physical examination
Increasing number of firms ask applicant to complete
the health information form without seeing a medical
doctor

Hiring Stage

After completing selection process, a list of candidates

to be hired is made
In hiring stage, two activities are performed:
(1) The company making the job offer
(2) Persuading the applicant to accept it

Socialisation Stage

It is the process through which new salespeople learn

values, norms, attitudes, and behaviour of people
working in the firm
Socialisation process starts before the new salesperson
accepts the job offer and continues until the person is
assimilated into the company culture
Assimilation is the second stage of socialisation process
Companies have this process, in order to retain new
salespeople