Sales Organization and Sales Force Management
What this domain tests
Identification of sales organisation structures, the basis on which territories are specialised, and the arithmetic of deciding how many salespeople a firm needs.
Structures
- Line organisation - authority flows straight down from sales manager to salespeople; simple, quick decisions, but the manager must know everything.
- Line and staff - line managers command; staff specialists (trainers, market researchers, sales analysts) advise. Suits large firms.
- Functional organisation - specialists each supervise one activity (training, service, promotion) across the whole force.
- Committee - a group decides on major selling policies.
Bases of specialisation
Geographic (territory), product, customer/market, and combination (hybrid). Product specialisation suits technical or wide product lines; customer specialisation suits buyers with very different needs such as institutions versus retailers; geographic is cheapest for a single product line.
Worked example (workload method)
A firm has 800 active customers, each needing 12 calls a year. One salesperson can make 20 calls a week over 48 working weeks.
- Total calls needed = 800 × 12 = 9,600 calls a year.
- Calls one salesperson can make = 20 × 48 = 960 calls a year.
- Salespeople required = 9,600 ÷ 960 = 10. Reasoning: the workload method divides total selling effort by the effort one person can deliver; it uses customers and call frequency, not sales revenue.
Sales force management cycle
Recruit → select → train → assign territory and quota → motivate and compensate → supervise → evaluate → develop or replace.
Traps that cost marks
- Calling a structure “line and staff” when only line authority exists.
- Forgetting that span of control limits how many salespeople one manager can supervise.
- Using sales value instead of call workload in the workload method.
- Ignoring that a new territory may need a smaller quota while it is being built.