Your sales organisation is responsible for generating top-line revenue for your company by engaging buyers to purchase products or services. For salespeople to effectively close deals, they must be able to focus on sales-critical activities. However, most salespeople will tell you they are frequently tasked with activities that would be better suited to other areas of the business or, where possible, sales operations or sales enablement functions.
How a sales organisation is organised or structured directly impacts your sales effectiveness and profitability as a company.
What is the sales structure?
Sales structure refers to how you segment your sales team into specialised groups or teams. It is how you determine which way to organise your sales team for your industry, which could be by the regions your company serves, the products and services you offer to markets, the headcount of your sales team, and importantly the size of your customers.
The sales force structure is important as it sets sales teams for success. It is about having the right salesperson, appropriately skilled, to service your customers. After all, you would not put a newly hired salesperson with limited experience in charge of your major accounts; similarly, a senior seller with deep domain experience in a specialised industry vertical to make general sales.
The careful design of your sales department will allow you to capitalise on individual capabilities and experiences while also ensuring the right salespeople are connected and targeting the right customers.
What roles contribute to a sales structure?
Depending on the size of your company, you will have the opportunity to have four contributors to sales growth. The optimum team has all four in place that enables high-performance salespeople to be attracted to your business. An overview of the four contributing areas is:
Sales Leadership/Sales Management
- Develops and analyses sales revenue strategy
- Communicates with marketing to align marketing and sales strategies
- Manages day-to-day communications with the sales team
- Communicates with other divisional managers
- Manages and is responsible for the performance of the sales team
Sales Team
- Engages with customers and new buyers to close deals and generate sales revenue
- Updates CRM, manages their pipeline, attends sales meetings
- Completes onboarding and training to develop their skillset
Sales Operations
- The administrator of the sales leadership role – they manage the day-to-day operations of a sales organisation, such as forecasting and sales tool administration
- Tracks and reviews sales performance metrics, qualified lead conversions, sales goals, and sales compensation incentive plans
- Ensures operational compliance of sales team members
Sales enablement
- Prepares salespeople for customer engagements via training and onboarding activities
- Manages sales tools and marketing collateral
- Assists in customer onboarding
Sales operations support sales leadership, sales teams, and, ideally sales enablement, so they will be more productive and efficient in delivering top-line revenue. A sales team that is adopting other tasks will not gain the necessary traction to drive revenue growth. Your company needs to invest in the structure to be successful.
What are the types of Sales Organisation Structures?
Structures for sales teams are based on the demands of your industry and, importantly, where you are focusing on finding growth. The sales cycle of your products and the sales process being applied will play a role in how your sales organisation structure is established. Growth businesses require a different structure to mature companies, as shown below.
The hunter-farmer model has been around for many years. It focuses on having your best sellers (hunters) target new customers and move them through the pipeline until closed. The farmer then manages the customer relationship to protect and grow the business.
Today the model has changed to meet the new buyer process. The hunter role is a combination of marketing and sales prowess and is often titled business development manager. The marketing department is responsible for lead generation of sales-ready leads, and experienced sellers are required to close that business and win sales.
This process will quickly move new customers through the pipeline and manage the larger, more complex sales opportunities. This is ideal for fast-growing companies looking to secure above-market new customer acquisition.
The account manager will remain the custodian of the customer relationship.
The risk with this model is the creation of silos and miscommunication across the sales team. There is also a high risk of poor customer experience during the handover period if systems are not in place to ensure all representations made to the customer during the purchase are fulfilled.
The traditional sales representative model is where an individual salesperson is responsible for the customer’s lifecycle, from prospecting to engagement and then managing the customer relationship. The sales reps manage the full cycle of the customer with the company.
As the individual is fully responsible for acquiring and growing the accounts, the company is at risk of being the only conduit to the customer. They consider themselves the industry and customer experts. If that individual leaves, the customer may follow them to their next place of employment.
Companies with smaller sales teams opt for this model as they often have limited funds for the sales organisation. The downside to this model is that most salespeople will opt to service existing customers, and targeting new customers becomes elusive. This slows, if not stops, the companies ability to scale. The slowest growth companies operate this sales structure model.
Sales leaders can further segment their sales teams by factors, such as:
- Geography/Territory
- Product and/or service offering
- Customer size
- Customer growth capacity
- Customer vertical – industry or profession
The enterprise sales model is where an account executive will be responsible for one or two major customers. They are specialists in product and application knowledge and experience in selling at the C-Suite level and working long-term with influencers within the company. They are measured by not only sales goals but also customer success with the products.
One of the key factors to the structure is providing the bandwidth for growth. For example, investing in sales operations can be a major breakthrough for some companies as it allows sales leaders to be effective in coaching and guiding the sales team. In contrast, sales operations deliver the reporting and chase team members on compliance issues.
A Review of Sales Structure is an Annual Event for Growth Companies
Taking the right steps in the sales structure review determines profitability for the company. These are the steps to take:
1. A review of the product lifecycle to define which products and services are in introduction, growth, maturity, and decline. Investing sales energy and efforts in the right cycle of the product is important.
2. Review the product and service profitability to understand where investments of resources are affordable and ROI can be achieved.
3. A review of customers and, importantly, your target customers to establish the sales effort required to reach those customers consistently to stimulate their buying. The customers should be looked at through product, location, market share, growth capacity, and vertical. Consideration of marketing’s contribution should also be included in this phase.
4. The most important is for top-down cost and effectiveness and bottom-up cost efficiencies. Sales Focus Advisory does this through capacity planning disciplines related to lean sales and marketing. The cost savings and efficiencies often allow companies to adjust their team headcount to include sales operations personnel opening the door to more growth—the overall cost of sales lowering through initiatives uncovered in the capacity planning process.
When the structure is validated and meets all four business demands, you are then set to establish quotas and KPIs to keep the team focused and winning in the coming year.
If you would like to discuss a review of your sales structure, its efficiencies, and effectiveness, please contact us directly.
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You may also be interested in reading these articles:
- Role of Sales Operations Specialist – A Must-Have Position
- Sales Enablement Means the Success of Your Sales Team
- Sales Models Have Changed – How It Affects Business Strategy
- Sales Territory Optimisation to Maximise Growth
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