Sales Force

Topics: Sales, Marketing, Customer service Pages: 23 (6637 words) Published: September 2, 2013
www.hbr.org

The organization and goals of a sales force have to change as businesses start up, grow, mature, and decline.

Match Your Sales Force Structure to Your Business Life Cycle by Andris A. Zoltners, Prabhakant Sinha, and Sally E. Lorimer

Reprint R0607F

The organization and goals of a sales force have to change as businesses start up, grow, mature, and decline.

Match Your Sales Force Structure to Your Business Life Cycle by Andris A. Zoltners, Prabhakant Sinha, and Sally E. Lorimer

COPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

Smart bicycle-racing teams match their strategies to the stages of a race in order to win. In the flat stretches, team members take turns riding in front because it’s easier for the team leader to pedal when someone ahead is cutting the wind. In the mountains, some riders make the task easier for the leader by setting the pace and by choosing the best line of ascent. In the time trials, a few team members maintain steady speeds over long distances to lower the team’s average finishing time. Talent always matters, but in most races, the way teams deploy talent over time, in different formations in different contexts, makes the difference between winning and losing. That’s a lesson sales leaders must learn. Although companies devote considerable time and money to managing their sales forces, few focus much thought on how the sales force needs to change over the life cycle of a product or a business. However, shifts in the sales force’s structure are essential if a company wants to keep winning the race for customers. Specifically, companies must alter four factors

over time: the roles that the sales force and selling partners play; the size of the sales force; the sales force’s degree of specialization; and how salespeople apportion their efforts among different customers, products, and activities. These variables are critical because they determine how quickly sales forces respond to market opportunities; they influence sales forces’ performance; and they affect companies’ revenues, costs, and profitability. Admittedly, it isn’t easy for a company to change the composition and activities of its sales force. Salespeople and customers resist change, often quite fiercely. If a company starts hiring specialists instead of general-purpose salespeople, for example, or reassigns accounts from sales reps in the field to telesales staff, existing salespeople will have to learn how to sell different products and will have to terminate some customer relationships. If they earn commissions or bonuses, their income may fall in the short run. Customers, too, will have to adjust to new processes and establish relationships with new salespeople. As a result, busi-

harvard business review • hbr.org • sales • july–august 2006

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Match Your Sales Force Structure to Your Business Life Cycle

Andris A. Zoltners (andy.zoltners@ zsassociates.com) is a professor of marketing at Northwestern University’s Kellogg School of Management in Evanston, Illinois. He is also a cochairman of ZS Associates, a global businessconsulting firm headquartered in Evanston. Prabhakant Sinha (prabha .sinha@zsassociates.com) is a cochairman of ZS Associates. Sally E. Lorimer (slorimer@comcast.net) is a marketing and sales consultant and a business writer based in Northville, Michigan. Zoltners, Sinha, and Lorimer are the authors of three books on sales force management.

nesses tend to change their sales structures only when major events—such as the failure to meet targets, a change in rivals’ strategies, or mergers—force them to do so. This conservatism doesn’t serve companies well. The sales force structure that works during start-up is different from what works when the business is growing, during its maturity, and through its decline. The four life-cycle phases aren’t mutually exclusive; some companies display characteristics of more than one stage at the same...
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