The structure of a sales force has significant bearing on its success. For example, a rep used to selling to a given region might flounder when asked to concentrate on just one industry nationwide. If each of your company’s products require deep and specific technical knowledge, it might not make sense to have reps sell all products by territory.
It’s simply not true that sales talent translates into all situations. Take a software representative who sells exclusively to manufacturing companies, and ask them to start selling hardware across all verticals. They’re probably not going to be as good at one of these assignments as the other. Salespeople who excel get very good at excelling in a particular environment, and organizational structure is the bedrock of that environment.
Sales Organization Structure
Sales organization structure refers to the design of the sales team. Businesses may use an inside or outside sales model, geographic or industry territory approach, product model (split by product line or type), SMB/mid-market/Enterprise split, or some combination of the above.
In his book Aligning Strategy and Sales, Frank V. Cespedes, senior lecturer of business administration at Harvard Business School, explains in depth how organizational design impacts selling effectiveness, and emphasizes the importance of choosing a structure carefully. In the chart below, he lays out the pros and cons of four commonly used structures. Accounts and opportunities can be divided by:
- Product/service line
- Customer/account size
- Industry/vertical segment
Take a look, and then think about whether a reorg is in order.
Source: Table 8-1 from “Aligning Strategy and Sales” by Frank V. Cespedes. Reprinted here with permission.
Sales Organization Chart
Here’s an example sales organization chart. This can be modified depending on which organizational structure you choose (i.e., by geography/territory, product/service line, customer/account size, or industry/vertical segment).
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