Unit 2: Sales Force Management

Sales Force Management

Introduction to Sales Force Management

Sales Force Management (SFM) is the process of planning, directing, controlling, and evaluating the sales team to achieve the company’s sales goals effectively.

It includes

• Hiring the right people
• Training and motivating them
• Setting sales targets
• Monitoring performance

In short: Sales Force Management = Managing people who sell your products.

Types of Sales Organizations and Their Structures

A Sales Organization Structure defines how the sales team is arranged, who reports to whom, and how responsibilities are divided.

A. Line Organization

• The oldest and simplest type.
• Direct chain of command: each salesperson reports to one superior.
• Suitable for small organizations.

Example: Sales Executive → Sales Manager → General Manager

• Advantages: Clear authority and quick decisions
• Disadvantages: Limited specialization

B. Line and Staff Organization

• Combines line authority with staff specialists who give advice or support.
• Suitable for medium and large firms.

Example: Sales Manager supported by training, HR, and research experts.

• Advantages: Expert guidance + control
• Disadvantages: Can cause confusion if duties overlap

C. Functional Organization

Specialists manage specific sales functions like advertising, customer service, etc.

Salespeople may receive instructions from multiple managers.

Example: One expert for product training, another for territory management.

• Advantages: Specialized skills
• Disadvantages: Multiple bosses may confuse employees

D. Geographic / Territorial Organization

• Salespersons are assigned territories based on regions.
• Suitable when products are similar across areas.

Example: North Zone, South Zone, East Zone, West Zone

• Advantages: Better local customer relationship
• Disadvantages: May duplicate efforts in overlapping areas

E. Product-Based Organization

• Sales team divided based on product lines.
• Suitable for firms with diverse product portfolios.

Example: Sales reps for – Electronics, Furniture, and Clothing divisions.

• Advantages: Deep product knowledge
• Disadvantages: Higher cost due to duplication of effort

F. Customer / Market-Based Organization

Team organized according to customer type or industry. Example: Industrial clients vs. Retail clients.

• Advantages: Focused service and specialization
• Disadvantages: Coordination challenges among teams

G. Mixed / Hybrid Structure

Combination of two or more structures. Example: Geographic + Product-based.

• Advantages: Flexibility
• Disadvantages: Complex to manage

Recruitment of Sales Force

Recruitment is the process of attracting and identifying potential candidates for sales positions.

Sources of Recruitment

Source	Example
Internal	Promotions, transfers, employee referrals
External	Advertisements, campus recruitment, job portals, agencies

Steps

• Identify manpower needs
• Prepare job description & profile
• Attract applicants through various sources
• Screen applications

Selection of Sales Force

Selection involves choosing the right candidate who fits the job requirements.

Selection Process

• Preliminary Interview – basic qualification check
• Application Form – educational and work details
• Written Test – aptitude or communication test
• Personal Interview – assesses confidence, motivation, and selling skills
• Reference & Background Check
• Final Selection & Offer Letter

Qualities of a Good Salesperson

• Communication skills
• Persuasion power
• Confidence
• Product knowledge
• Patience & integrity

Training and Development of Sales Force

Sales training aims to improve the knowledge, skills, and attitude of salespeople to increase performance and customer satisfaction.

Objectives

• Understand company products and policies
• Improve communication and negotiation skills
• Handle customer objections
• Increase motivation and confidence

Types of Training

Type	Explanation
Induction Training	Introduces new recruits to company, policies, and culture
Product Training	Teaches product features and benefits
Sales Technique Training	Focus on prospecting, presentation, closing sales
On-the-Job Training	Learning through practical field experience
Refresher Training	For experienced staff to learn new trends or products

Development

• Long-term improvement through workshops, mentoring, and continuous learning.
• Helps build future sales leaders.

Summary Table

Component	Meaning	Example
Sales Force Management	Managing sales team to achieve company goals	Planning, directing, evaluating
Sales Organization Types	Structure of sales team	Line, Product, Geographic
Recruitment	Finding candidates	Internal & external sources
Selection	Choosing right people	Interview, tests, checks
Training & Development	Skill improvement	Product & sales technique training

In short: Sales Force Management is about building, guiding, and empowering the right sales team — from hiring to training — so they can effectively represent the company and drive sales success.

Sales Force Management (SFM)

Sales Force Management involves planning, directing, and controlling the activities of a company’s sales personnel to achieve sales objectives effectively and efficiently. It includes recruiting, training, motivating, compensating, and evaluating salespeople.

Types of Sales Organizations and Their Structure

Type of Sales Organization	Description	Example
Line Organization	Simple structure where authority flows directly from top to bottom.	Small businesses
Line & Staff Organization	Staff members provide expert advice to the line managers.	Medium-sized firms
Functional Organization	Each salesperson specializes in one function such as prospecting, selling, or servicing.	Insurance companies
Geographical Organization	Salespeople are assigned specific territories or regions.	FMCG companies
Product-based Organization	Sales team divided based on product lines.	Automobile, Pharma
Customer-based Organization	Salespeople handle specific customer segments (e.g., retail, corporate).	Banks, B2B companies
Hybrid Organization	Combination of above structures to suit complex operations.	Multinational companies

Recruitment and Selection of Sales Force

Recruitment

The process of attracting potential candidates for sales positions.

Sources 

• Internal: Promotion, transfer, referrals.
• External: Advertisements, job portals, campus recruitment, consultancy firms.

Selection Process

• Application screening
• Written tests/interviews
• Group discussions
• Background verification
• Final selection and appointment

Objective: To select individuals who fit the job requirements and company culture.

Training and Development

Purpose: To improve selling skills, product knowledge, and customer-handling ability.

Types of Training

• Induction Training: Orientation for new recruits.
• Product Training: Detailed information about company products.
• Sales Techniques Training: Prospecting, negotiation, closing, and follow-up.
• Behavioral Training: Communication, body language, emotional intelligence.
• Ongoing Development: Workshops, refresher courses, field coaching.

Methods

• On-the-job training
• Role plays
• Case studies
• E-learning modules

Sales Force Motivation and Compensation

Motivation: Essential to maintain enthusiasm, performance, and commitment among salespeople.

Motivation Techniques

• Monetary rewards (bonuses, commissions)
• Recognition (awards, certificates)
• Career advancement opportunities
• Sales contests and incentives

Compensation Components

• Fixed Pay: Base salary for job stability.
• Variable Pay: Commission based on performance.
• Benefits: Insurance, travel allowance, incentives.

Designing Incentives and Contests

Sales Incentives: Rewards given for achieving or exceeding sales targets.

Types

• Cash bonuses
• Travel incentives
• Gift vouchers

Sales Contests: Short-term competitions to boost motivation and sales volume. Example: “Top Seller of the Month” or “New Product Launch Drive”.

Sales Forecasting

Definition: Estimating future sales based on past data and market trends.

Methods

• Qualitative: Expert opinions, sales force composite, market research.
• Quantitative: Time series analysis, regression models.

Importance: Helps in budgeting, inventory control, and performance planning.

Sales Budget

A financial plan that estimates sales revenues and expenses for a specific period.

Components

• Sales revenue forecast
• Selling expenses
• Marketing expenses
• Profit margin targets

Sales Quota

Definition: A target or goal assigned to a salesperson or sales territory.

Types

• Volume quota (number of units sold)
• Value quota (sales revenue)
• Profit quota (margin-based)
• Activity quota (calls, visits, demos)

Sales Territory Management

Sales Territory: A specific geographical area assigned to a salesperson.

Objectives

• Ensure coverage of the entire market.
• Minimize travel time and cost.
• Improve customer service and sales efficiency.

Sales Reporting Mechanism and Monitoring

Sales Reports Include:

• Daily call reports
• Order reports
• Expense reports
• Performance summaries

Purpose

• Evaluate sales force effectiveness.
• Identify problems and opportunities.
• Monitor progress toward goals.

Sales Force Productivity

Ways to Improve Productivity

• Use of CRM tools
• Regular training
• Clear targets and incentives
• Reducing administrative workload

Metrics:

• Sales per salesperson
• Conversion ratio
• Average deal size
• Customer retention rate

Sales Force Appraisal

Definition: The process of evaluating salespersons’ performance against predetermined standards.

Methods

• Self-evaluation
• Supervisor evaluation
• 360-degree feedback
• Key Performance Indicators (KPIs)

Appraisal Criteria

• Achievement of targets
• Customer satisfaction
• Product knowledge
• Communication and teamwork