How to Match Your Sales Force Structure

Alignment of salesforce structure and business stage helps produce maximum sales.

From 1977 to 2005, the number of new companies each year in the United States has remained surprisingly stable. While new business growth is important, what matters most is the impact that new firms make. For companies with salespeople, adapting sales force structure to the business stage means more sales successes.



Without ongoing shifts in sales structure, companies stand to win fewer customers. Businesses in start-up, growth, maturation and decline phases need separate sales force designs.

Instructions

1. Analyze your current sales force composition and strategy. Create a chart with the number of salespeople in your organization, the geographic areas that they cover, the types of customers they serve, and sales representatives' primary duties. Include the amount of time salespeople spend on different tasks, such as prospecting and serving current customers. Look closely at territory division.

2. Determine your business stage: new, growth, maturation or decline. The amount of time your firm has been in business, pace of sales, and predictions about product improvements or competitive threats can help you determine the phase.

3. Revisit your current sales force structure in its entirety. Some firms miss out on the most effective use of sales force because they analyze and adjust pieces of the structure separately and at different times. To match sales force structure to business stage, consider all factors within the chart that you devised in Step 1. New companies need fewer sales reps to test the waters and determine how customers react to product presentations and how many buy. Companies in growth mode should consider more complex sales structures, including specialized teams to meet different target markets, and a larger sales force overall to meet growing demand. Companies in a mature phase need to take a close look at sales representatives' roles, including the amount of time salespeople spend with existing customers versus prospecting for new customers. Declining firms need to take a look at the number of sales representatives for each product and service, and decide if they should allocate more of the sales team to another growing product area within their firm.

4. Determine the exact number of sales representatives for each target market. Ascertain the number of employees for each sales function, including the number of inside and outside salespeople. Establish the number of salespeople per geographic area. With business stage in mind, companies ensure that they develop an adaptive sales structure and gain the most production from sales representatives.

References

• www.kauffman.org: "Number of New Companies Created Annually Remains Remarkably Constant Across Time, According to Kauffman Foundation Study"
• www.strategy-business.com: "Is Your Salesforce Adaptable?" Page 2