How to Design a Sales Force
Designing a sales force that is effective and appropriate requires some planning and understanding of the product, the market and the intent of the sales force first. Secondly, consider methods of sales, technical training requirements and desired results before designing a sales force. Once you consider these aspects, think about the life cycle of the business and where you are today versus where you need to go in the future. Re-evaluate periodically.
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Instructions
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Determine the type of product you have (consumable, durable, luxury or service) and the market segment by price point that you are targeting (low, medium or high). Typically, consumable goods, such as food, are sold directly to retailers, but there is little sales interaction at the consumer level. Durable goods, such as washing machines, might have a little more interaction with the consumer, but the sales efforts are still performed at the retail level. Selling big-ticket items such as a yacht or a home often requires multiple instances of personal interaction directly with a consumer. Know what kind of product or service you are selling.
In almost every market, there are different levels of price points. Lower-priced items are typically sold "as is" or with a bare-bones approach. Higher-priced items may ofter V.I.P. services that accompany the product to give the consumer additional value for the higher price. Understanding what niche you are targeting is important in planning a sales force.
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Define the role of the sales force. The sales force is the front line of your company and salespeople are often paid more than other administrative personnel because their compensation can be tied directly to the income of the company. Define the technical, educational, hard and soft skill requirements.
Analyze the role and responsibility of the sales force to ascertain their pay and bonus incentives. Ideally, the pay structure should be a mixed ratio of fixed income vs. incentive or bonus, depending upon the salesperson's role, responsibilities and type of goods sold. The bonus or incentive should reflect the breadth of responsibility the salesperson has, the degree of accountability he has for the client, and the influence he has over setting the company's financial goals.
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Align sales force roles and responsibilities with the business life cycle. New businesses may require aggressive sales techniques, long hours and frequent travel. A new market may be wide open where salespeople have enormous opportunities to find new customers and attempt to sell to them.
Middle-aged businesses may need salespeople who have heavy project management skills. The sales force may be broken down in territories, regions or districts. Responsibilities might include a split 50-50 between selling new customers and servicing existing ones. Industry- or customer- specific salespeople might be responsible for negotiating annual contracts, troubleshooting design problems or refining existing products.
Older, established businesses may have salespeople who have few opportunities to find new customers; however, these folks may be responsible for gathering market intelligence and generating new ideas for possible research and development. Or they may become industry experts, finding ways to cut costs using new technologies or working with government officials to modify legislation.
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Manage the sales force objective and revisit periodically. After establishing the sales force based upon the points above, set annual goals and budgets. Review not only the numbers the following year, but the effectiveness of the sales force, the structure, the reward system and any operational difficulties or improvements you made the previous year.
Designing an effective sales force means that the sales personnel must be in the right place, at the right time, doing the right job, for the right customers. Re-evaluate periodically and modify the sales force design as required.
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Tips & Warnings
A six-step buying process is used when people contemplate buying something. Understanding this process will help you understand where you need to focus your sales efforts. The buying process is: recognizing a need, researching, looking at alternatives, making a buy decision, buying, and then thinking about the purchase after the fact.
Compare the competition and see how their sales force is structured. Use it as a starting point if necessary, but always base your decisions on your own business objectives and customer needs.
Promote and reward ethical sales. Remember that metrics drive behavior, so think carefully when setting up goals and a sales plan, use SMART objectives (Specific, Measurable, Attainable, Realistic and Timely). Reward with incentives in ways that promote ethical, long-term and healthy relationship building with new and existing customers.
Some industries equate high sales personnel turnover with internal operations failures. Select sales personnel carefully and mentor them well.
References
- Photo Credit Group of business people working together in the office.. image by Andrey Kiselev from Fotolia.com
