Marketing managers face several sales force strategy and design questions. How should salespeople and their tasks be structured? How big should the sales force be? Should salespeople sell alone or work in teams with other people in the company? Should they sell in the field, by phone, or using online and social media? We address these issues next.

The Sales Force Structure

A company can divide sales responsibilities along any of several lines. The structure decision is simple if the company sells only one product line to one industry with customers in many locations. In that case the company would use a territorial sales force structure. However, if the company sells many products to many types of customers, it might need a product sales force structure, a customer sales force structure, or a combination of the two.

In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company’s full line of products or services to all customers in that territory. This organization clearly defines each salesperson’s job and fixes accountability. It also increases the salesperson’s desire to build local customer relationships that, in turn, improve selling effectiveness. Finally, because each salesperson travels within a limited geographic area, travel expenses are relatively small. A territorial sales organization is often supported by many levels of sales management positions. For example, individual territory sales reps may report to area managers, who in turn report to regional managers who report to a director of sales.

If a company has numerous and complex products, it can adopt a product sales force structure, in which the sales force specializes along product lines. For example, GE employs different sales forces within different product and service divisions of its major businesses. Within GE Infrastructure, for instance, the company has separate sales forces for aviation, energy, transportation, and water processing products and technologies. No single salesperson can become expert in all of these product categories, so product specialization is required. Similarly, GE Healthcare employs different sales forces for diagnostic imaging, life sciences, and integrated IT products and services. In all, a company as large and complex as GE might have dozens of separate sales forces serving its diverse product and service portfolio.

Using a customer (or market) sales force structure, a company organizes its sales force along customer or industry lines. Separate sales forces may be set up for different industries, serving current customers versus finding new ones, and serving major accounts versus regular accounts. Organizing the sales force around customers can help a company build closer relationships with important customers. Many companies even have special sales forces to handle the needs of individual large customers. For example, GE Aviation has a special Boeing sales team. And P&G sales reps are integrated into Customer Business Development (CBD) teams. Each CBD team is assigned to a major P&G customer, such as Walmart, Safeway, or CVS Health. For example, P&G’s Walmart CBD team consists of hundreds of P&Gers who partner with Walmart buyers in Walmart’s hometown of Bentonville, Arkansas. The CBD organization places the focus on serving the complete needs of each major customer. It lets P&G “grow business by working as a ‘strategic partner’ with our accounts,” not just as a supplier.3

When a company sells a wide variety of products to many types of customers over a broad geographic area, it often employs a complex sales force structure, which combines several types of organization. Salespeople can be specialized by customer and territory; product and territory; product and customer; or territory, product, and customer. For example, P&G specializes its sales force by customer (with different sales teams for Safeway, CVS Health, or other large customers) and by territory for each key customer group (territory CBD representatives, territory managers, regional managers, and so on). No single structure is best for all companies and situations. Each company should select a sales force structure that best serves the needs of its customers and fits its overall marketing strategy.

Other Sales Force Strategy and Structure Issues

Sales management must also determine who will be involved in the selling effort and how various sales and sales-support people will work together.

Outside and Inside Sales Forces

A company may have an outside sales force (or field sales force), an inside sales force, or both. Outside salespeople travel to call on customers in the field. In contrast, inside salespeople conduct business from their offices via telephone, online and social media interactions, or visits from buyers. The use of inside sales has grown in recent years as a result of increased outside selling costs and the surge in online, mobile, and social media technologies.

Some inside salespeople provide support for the outside sales force, freeing them to spend more time selling to major accounts and finding new prospects. For example, technical sales-support people provide technical information and answers to customers’ questions. Sales assistants provide research and administrative backup for outside salespeople. They track down sales leads, call ahead and confirm appointments, follow up on deliveries, and answer customers’ questions when outside salespeople cannot be reached. Using such combinations of inside and outside salespeople can help serve important customers better. The inside rep provides daily access and support, whereas the outside rep provides face-to-face collaboration and relationship building.

Other inside salespeople do more than just provide support. Telemarketers and online sellers use the phone, internet, and social media to find new leads, learn about customers and their business, or sell and service accounts directly. Telemarketing and online selling can be very effective, less costly ways to sell to smaller, harder-to-reach customers. Depending on the complexity of the product and customer, for example, a telemarketer can make from 20 to 33 decision-maker contacts a day compared with the average of four that an outside salesperson can make. In addition, whereas the cost of a business-to-business (B-to-B) field sales call can average close to $600, a routine industrial telemarketing or online contact might average only $25 to $75.5

Although the federal government’s Do Not Call Registry put a dent in telephone sales to consumers, telemarketing remains a vital tool for most B-to-B marketers. For some smaller companies, telephone and online selling may be the primary sales approaches. However, most of the larger companies also use these tactics extensively, either to sell directly to small and midsize customers or to assist their sales forces in selling to larger ones.

In addition to costs savings, in today’s digital, mobile, and social media environments, many buyers are more receptive to—or even prefer—phone and online contact versus the high level of face-to-face contact once required. Today’s customers are more inclined to gather their own information online—one study showed that a typical buyer reports contacting a sales rep only after independently completing about 60 percent of the buying process. Then buyers routinely use the phone, online meetings, and social media interactions to engage sellers and close deals. “With virtual meeting software such as GoToMeeting.com and WebEx, communications tools such as Skype, and social media sites such as Twitter, Facebook, and LinkedIn, it’s become easier to sell with few if any face-to-face meetings,” says an inside sales consultant.6

As a result of these trends, telephone and online selling are growing much faster than in-person selling. One recent study found that inside sales positions are growing 300 times faster than outside sales positions. Another study also notes the emergence of the “hybrid sales rep,” a modern cross between a field sales rep and an inside rep who often works from a remote location. Some 41 percent of outside sales activity is now done over the phone or a mobile device, from a home office or a company office or on the go.7 For many types of products and selling situations, phone or online selling can be as effective as a personal sales call.

Team Selling

As products become more complex and as customers grow larger and more demanding, a single salesperson simply can’t handle all of a large customer’s needs. Instead, most companies now use team selling to service large, complex accounts. Sales teams can unearth problems, solutions, and sales opportunities that no individual salesperson could. Such teams might include experts from any area or level of the selling firm—sales, marketing, technical and support services, research and development, engineering, operations, finance, and others.

In many cases, the move to team selling mirrors similar changes in customers’ buying organizations. Many large customer companies have implemented team-based purchasing, requiring marketers to employ equivalent team-based selling. When dealing with large, complex accounts, one salesperson can’t be an expert in everything the customer needs. Instead, selling is done by strategic account teams, quarterbacked by senior account managers or customer business managers.

For example, the P&G Walmart Customer Business Development team is a complete, multifunctional customer service unit consisting of more than 300 people. The team includes a CBD manager and several CBD account executives (each responsible for a specific P&G product category), supported by specialists in marketing strategy, product development, operations, information systems, logistics, finance, and human resources.

Team selling does have some pitfalls, however. For example, salespeople are by nature competitive and have often been trained and rewarded for outstanding individual performance. Salespeople who are used to having customers all to themselves may have trouble learning to work with and trust others on a team. In addition, selling teams can confuse or overwhelm customers who are used to working with only one salesperson. Finally, difficulties in evaluating individual contributions to the team-selling effort can create some sticky compensation issues.

At the heart of any successful sales force operation is the recruitment and selection of good salespeople. The performance difference between an average salesperson and a top salesperson can be substantial. In a typical sales force, the top 30 percent of the salespeople might bring in 60 percent of the sales. Thus, careful salesperson selection can greatly increase overall sales force performance.

Beyond the differences in sales performance, poor selection results in costly turnover. When a salesperson quits, the costs of finding and training a new salesperson—plus the costs of lost sales—can be very high. One sales consulting firm calculates the total costs of a bad sales hire at a whopping $616,000.8 Also, a sales force with many new people is less productive, and turnover disrupts important customer relationships and sales team morale.

What sets great salespeople apart from all the rest? In an effort to profile top sales performers, Gallup Consulting, a division of the well-known Gallup polling organization, has interviewed hundreds of thousands of salespeople. Its research suggests that the best salespeople possess four key talents: intrinsic motivation, a disciplined work style, the ability to close a sale, and, perhaps most important, the ability to build relationships with customers.9

Super salespeople are motivated from within—they have an unrelenting drive to excel. Some salespeople are driven by money, a desire for recognition, or the satisfaction of competing and winning. Others are driven by the desire to provide service and build relationships. The best salespeople possess some of each of these motivations. However, another analysis found that the best salespeople are driven by a strong sense of purpose: “The salespeople who sold with noble purpose, who truly want to make a difference to customers, consistently outsold the salespeople focused on sales goals and money.” Selling with such a sense of customer-related purpose is not only more successful, it’s also more profitable and more satisfying to salespeople.10

Super salespeople also have a disciplined work style. They lay out detailed, organized plans and then follow through in a timely way. But motivation and discipline mean little unless they result in closing more sales and building better customer relationships. Super salespeople build the skills and knowledge they need to get the job done. Perhaps most important, top salespeople are excellent customer problem solvers and relationship builders. They understand their customers’ needs. Talk to sales executives and they’ll describe top performers in these terms: good listeners, empathetic, patient, caring, and responsive. Top performers can put themselves on the buyer’s side of the desk and see the world through their customers’ eyes. They don’t want just to be liked; they want to add value for their customers.

That said, there is no one right way to sell. Each successful salesperson uses a different approach, one that best applies his or her unique strengths and talents. For example, some salespeople enjoy the thrill of a harder sell in confronting challenges and winning people over. Others might apply “softer” talents to reach the same goal. “The truth is, no two great sales reps are alike,” says one sales consultant. “You might thrive on fierce competition, while a colleague wins by being a super-analytical problem solver. Or maybe you have a tremendous talent for building relationships, while your fellow top performer is a brilliant strategist. What’s most important is that you win business your way.”11

When recruiting, a company should analyze the sales job itself and the characteristics of its most successful salespeople to identify the traits needed by a successful salesperson in its industry. Then it must recruit the right salespeople. The human resources department looks for applicants by getting names from current salespeople, using employment agencies, searching the internet and online social media, posting ads and notices on its website and industry media, and working through college placement services. Another source is to attract top salespeople from other companies. Proven salespeople need less training and can be productive immediately.

Recruiting will attract many applicants from which the company must select the best. The selection procedure can vary from a single informal interview to lengthy testing and interviewing. Many companies give formal tests to sales applicants. Tests typically measure sales aptitude, analytical and organizational skills, personality traits, and other characteristics. But test scores provide only one piece of information in a set that includes personal characteristics, references, past employment history, and interviewer reactions.

New salespeople may spend anywhere from a few weeks or months to a year or more in training. After the initial training ends, most companies provide continuing sales training via seminars, sales meetings, and online learning throughout the salesperson’s career. According to one source, American firms spend approximately $20 billion on sales training each year. Although training can be expensive, it can also yield dramatic returns. For instance, one recent study showed that sales training conducted by ADP, an administrative services firm, resulted in a return on investment of nearly 340 percent in only 90 days.12

Training programs have several goals. First, salespeople need to know about customers and how to build relationships with them. Therefore, the training program must teach them about different types of customers and their needs, buying motives, and buying habits. It must also teach them how to sell effectively and train them in the basics of the selling process. Salespeople also need to know and identify with the company, its products, and its competitors. Therefore, an effective training program teaches them about the company’s objectives, organization, products, and the strategies of major competitors.

Today, many companies are adding digital e-learning components to their sales training programs. Online training may range from simple self-paced text- and video-based product training and internet-based sales exercises that build sales skills to sophisticated simulations that re-create the dynamics of real-life sales calls. One of the most basic forms is virtual instructor-led training (VILT). Using this method, a small group of salespeople at remote locations logs on to an online conferencing site, where a sales instructor leads training sessions using online video, audio, and interactive learning tools.13

Training online instead of on-site can cut travel and other training costs, and it takes up less of a salesperson’s selling time. It also makes on-demand training available to salespeople, letting them train as little or as much as needed, whenever and wherever needed. Although most e-learning is web-based, companies can offer on-demand training from anywhere via almost any mobile device.

Many companies are now using imaginative new e-learning techniques to make sales training more efficient and effective—and sometimes even more fun. For example, learning solutions company Bottom-Line Performance has developed a digital game-based sales-training tool called Knowledge Guru, which helps salespeople learn and remember key product, company, and customer facts as well as selling skills and processes.14

Using Knowledge Guru, companies can create single-pass games that teach foundational knowledge to new salespeople or for new products or extended-play games with performance challenges for teaching new selling skills. Salespeople can play the learning games alone or in competition with others, offline or online on a smartphone, tablet, or desktop. All the while, sales trainers can track individual salesperson learning performance. Several Fortune 500 companies use Knowledge Guru to add fun and engagement to training tasks that can sometimes be dull or intimidating. For example, IT networking company Cisco Systems uses Knowledge Guru as part of each module within its certified sales associate program. According to a Cisco program manager who helped introduce Knowledge Guru into the program, “Before they can work with customers, new [sales] associates must obtain a deep knowledge of our architectures and technologies. Knowledge Guru is essential to reinforcing this technical knowledge, and participants have rated Knowledge Guru highly as a learning tool.” Most important, the game really works, helping salespeople achieve an average retention rate of 87 percent against training objectives across all Cisco users.

To attract good salespeople, a company must have an appealing compensation plan. Compensation consists of four elements: a fixed amount, a variable amount, expenses, and fringe benefits. The fixed amount, usually a salary, gives the salesperson some stable income. The variable amount, which might be commissions or bonuses based on sales performance, rewards the salesperson for greater effort and success.

A sales force compensation plan can both motivate salespeople and direct their activities. Compensation should direct salespeople toward activities that are consistent with the overall sales force and marketing objectives.15 For example, if the strategy is to acquire new business, grow rapidly, and gain market share, the compensation plan might include a larger commission component, coupled with a new account bonus to encourage high sales performance and new account development. In contrast, if the goal is to maximize current account profitability, the compensation plan might contain a larger base-salary component with additional incentives for current account sales or customer satisfaction.

In fact, more and more companies are moving away from high-commission plans that may drive salespeople to make short-term grabs for business. They worry that a salesperson who is pushing too hard to close a deal may ruin the customer relationship. Instead, companies are designing compensation plans that reward salespeople for building customer relationships and growing the long-run value of each customer.

When times get tough economically, some companies are tempted to cut costs by reducing sales compensation. However, although some cost-cutting measures make sense when business is sluggish, cutting sales force compensation across the board is usually an action of last resort. Top salespeople are always in demand, and paying them less might mean losing them at a time when they are needed most. Thus, short-changing key salespeople can result in short-changing important customer relationships. If the company must reduce its compensation expenses, rather than making across-the-board cuts, companies should continue to pay top performers well while turning loose low performers.

New salespeople need more than a territory, compensation, and training—they need supervision and motivation. The goal of supervision is to help salespeople “work smart” by doing the right things in the right ways. The goal of motivation is to encourage salespeople to “work hard” and energetically toward sales force goals. If salespeople work smart and work hard, they will realize their full potential—to their own and the company’s benefit.

Supervising Salespeople

Companies vary in how closely they supervise their salespeople. Many help salespeople identify target customers and set call objectives. Some may also specify how much time the sales force should spend prospecting for new accounts and set other time management priorities. One tool is the weekly, monthly, or annual call plan that shows which customers and prospects to call on and which activities to carry out. Another tool is time-and-duty analysis. In addition to time spent selling, the salesperson spends time traveling, waiting, taking breaks, and doing administrative chores.

Figure 16.2 shows how salespeople spend their time. On average, active selling time accounts for only 37 percent of total working time.16 Companies are always looking for ways to save time—simplifying administrative duties, developing better sales-call and routing plans, supplying more and better customer information, and using phone, email, online, or mobile conferencing instead of traveling.

Figure 16.2

How Salespeople Spend Their Time

Figure 16.2 Full Alternative Text

Many firms have adopted sales force automation systems: computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere. Companies now routinely equip their salespeople with laptops or tablets, smartphones, wireless connections, videoconferencing technologies, and customer-contact and relationship management software. Armed with these technologies, salespeople can more effectively and efficiently profile customers and prospects, analyze and forecast sales, engage customers, make presentations, prepare sales and expense reports, and manage account relationships. The result is better time management, improved customer service, lower sales costs, and higher sales performance. In all, technology has reshaped the ways in which salespeople carry out their duties and engage customers.

We have thus far described how management communicates what salespeople should be doing and how it motivates them to do it. This process requires good feedback, which means getting regular information about salespeople to evaluate their performance.

Management gets information about its salespeople in several ways. The most important source is sales reports, including weekly or monthly work plans and longer-term territory marketing plans. Salespeople also write up their completed activities on call reports and turn in expense reports for which they are partly or wholly reimbursed. The company can also monitor the sales and profit performance data in the salesperson’s territory. Additional information comes from personal observation, customer surveys, and talks with other salespeople.

Using various sales force reports and other information, sales management evaluates the members of the sales force. It evaluates salespeople on their ability to “plan their work and work their plan.” Formal evaluation forces management to develop and communicate clear standards for judging performance. It also provides salespeople with constructive feedback and motivates them to perform well.

On a broader level, management should evaluate the performance of the sales force as a whole. Is the sales force accomplishing its customer relationship, sales, and profit objectives? Is it working well with other areas of the marketing and company organization? Are sales force costs in line with outcomes? As with other marketing activities, the company wants to measure its return on sales investment.

The fastest-growing sales trend is the explosion in social selling—the use of online, mobile, and social media to engage customers, build stronger customer relationships, and augment sales performance. Digital sales force technologies are creating exciting new avenues for connecting with and engaging customers in the digital and social media age. Some analysts even predict that the internet will mean the death of person-to-person selling, as salespeople are ultimately replaced by websites, online social media, mobile apps, video and conferencing technologies, and other tools that allow direct customer contact. “Don’t believe it,” says one sales expert. “There may be less face-to-face selling,” says another. “But on the seller’s side, there needs to be someone in charge of that (customer) interaction. That will remain the role of the salesperson” (see Real Marketing 16.1).17 Thus, online and social media technologies won’t likely make salespeople obsolete. Used properly, however, they will make salespeople more productive and effective.

The new digital technologies are providing salespeople with powerful tools for identifying and learning about prospects, engaging customers, creating customer value, closing sales, and nurturing customer relationships. Social selling technologies can produce big organizational benefits for sales forces. They help conserve salespeople’s valuable time, save travel dollars, and give salespeople new vehicles for selling and servicing accounts.

Social selling hasn’t really changed the fundamentals of selling. Sales forces have always taken the primary responsibility for reaching out to and engaging customers and managing customer relationships. Now, more of that is being done digitally. However, online and social media are dramatically changing the customer buying process. As a result, they are also changing the selling process. In today’s digital world, many customers no longer rely as much as they once did on information and assistance provided by salespeople. Instead, they carry out more of the buying process on their own—especially the early stages. Increasingly, they use online and social media resources to analyze their own problems, research solutions, get advice from colleagues, and rank buying options before ever speaking to a salesperson. One study of business buyers found that 92 percent of buyers start their searches online and that, on average, buyers completed nearly 60 percent of the buying process before contacting a supplier.18

Thus, today’s customers have much more control over the sales process than they had in the days when brochures, pricing, and product advice were available only from a sales rep. Customers can now browse corporate websites, blogs, and YouTube videos to identify and qualify sellers. They can hobnob with other buyers on social media such as LinkedIn, Google+, Twitter, or Facebook to share experiences, identify solutions, and evaluate products they are considering. As a result, if and when salespeople do enter the buying process, customers often know almost as much about a company’s products as the salespeople do. And when customers do call in salespeople, they are more often doing it digitally, with the expectation of real-time engagement.

In response to this new digital buying environment, sellers are reorienting their selling processes around the new customer buying process. They are “going where customers are”—social media, web forums, online communities, blogs—in order to engage customers earlier. They are engaging customers not just where and when they are buying but also where and when they are learning about and evaluating what they will buy.

Salespeople now routinely use digital tools that monitor customer social media exchanges to spot trends, identify prospects, and learn what customers would like to buy, how they feel about a vendor, and what it would take to make a sale. They generate lists of prospective customers from online databases and social networking sites, such as InsideView, Hoovers, and LinkedIn. They create dialogues when prospective customers visit their web and social media sites through live chats with the sales team. They use internet conferencing tools such as WebEx, Zoom, GoToMeeting, or TelePresence to talk live with customers about products and services. They provide videos and other information on their YouTube channels and Facebook pages.

Today’s sales forces are also ramping up their own use of digital content and social media to engage customers throughout the buying process. A recent survey of business-to-business marketers found that, although they have recently cut back on traditional media and event spending, they are investing more in social media, ranging from proprietary online customer communities to webinars and social media and mobile applications. Consider Makino, a leading manufacturer of metal cutting and machining technology:19

There’s a hot new video on YouTube these days, featured at the Makino Machine Tools YouTube channel. It shows a Makino five-axis vertical machining center in action, with metal chips flying as the machinery mills a new industrial part. Sound exciting? Probably not to you. But to the right industrial customer, the video is downright spellbinding. YouTube is just one of a wide variety of social media initiatives that Makino uses to complement its salespeople in their efforts to engage and inform customers and enhance customer relationships. For example, Makino hosts an ongoing series of industry-specific webinars that position the company as an industry thought leader. Makino produced and archived hundreds webinars on topics ranging from how to get the most out of your machine tools to how metal-cutting processes are done. Webinar content is tailored to specific industries, such as aerospace or medical, and is promoted through carefully targeted online ads and email invitations. The webinars help to build Makino’s customer database, generate sales leads, build customer relationships, and prepare the way for salespeople by ­serving up relevant information and educating customers online. Makino also uses Facebook, YouTube, and Twitter to inform customers and prospects about the latest Makino innovations and events and to demonstrate the company’s machines in action. Such digital content and social media don’t replace salespeople. Instead, they help salespeople build even more fruitful customer relationships. When it comes to B-to-B selling these days, Makino has learned, social marketing is the space to be.

Ultimately, social selling technologies are helping to make sales forces more efficient, cost-effective, and productive. The technologies help salespeople do what good salespeople have always done—build customer relationships by solving customer problems—but do it better, faster, and cheaper.

However, social selling also has some drawbacks. For starters, it’s not cheap. But even more, there are some things you just can’t present or teach via the internet—things that require personal engagement and interaction. For these reasons, some high-tech experts recommend that sales executives use online and social media technologies to spot opportunities, provide information, maintain customer contact, and make preliminary client sales presentations but resort to old-fashioned, face-to-face meetings when the time draws near to close a big deal.