The structure of a sales force has significant bearing on its success. For example, a sales person 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 not a given 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 organisational structure is the bedrock of that environment.
Sales organisation 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 organisational design impacts selling effectiveness, and emphasises the importance of choosing a structure carefully. Frank highlights four commonly used structures.
Geography/Territory Org Structure
Organizing your sales team by geography or territory allows each salesperson to develop familiarity with a specific geographic location. They can build rapport with local businesses, get to know regional competitors, and track target accounts.
It can also be easier to evaluate your reps by taking into account the performance and market potential of a specific geographic location.
Product/Service Line Org Structure
If your company sells several different products or services, it can help to align salespeople to those products and services. Similar to geographical expertise, it allows your reps to become the expert on a specific product you sell, thereby better able to communicate its value and use case for individual clients.
Customer/Account Size Org Structure
Organizing your sales org by account size is another popular structure. The skills a rep needs to sell to an SMB are different than those of selling to an enterprise account. These businesses have different goals, will ask different questions, and have very different budgets. By allowing sales people to become familiar with the intricacies of these accounts, you’ll better meet the needs of the customer and your team.
Industry/Vertical Org Structure
Different industries will use your product/service in different ways. Make sure your team is well-versed in how to position your offering to these various verticals by organising your sales team accordingly.