What is Sales Organisation? Introduction, Types

What is Sales Organisation?

A sales organization is a department or team within a company that is responsible for the sale of its products or services. It can refer to the overall structure and strategy for sales, as well as the specific individuals, roles, and responsibilities involved in the sales process.

The following factors influence the structure of the sales organisation:

• Nature, size, and financial conditions of the organisation
• Sales policies
• Distribution methods
• Region
• Number of products and services
• Size of the sales force
• Customer categories

Sales organisation structure is the division of your sales team into specialised groups according to the number of products offered, customer categories, or geographical region.

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Types of Sales Organisations

The sales organisation is the unit of an organisation that is responsible for the sales and distribution of goods and services. A sales organisation comprises a group of individuals who handle different aspects of the sales function such as selling, distribution, advertising, etc.

The sales organisation works towards increasing sales volume and maximising revenue for the firm. It helps to define and allocate the responsibilities and duties of the sales force. It promotes coordination of activities of the sales department and its interaction with the other departments such as advertising, promotion, and distribution.

As stated earlier, the structure of a sales organisation refers to the segmentation of the sales team into specialised groups. This structure is decided by various factors such as the region, the number of products and services, the size of the sales force, and the customer categories.

A sales organisation performs the following functions in an organisation:

• Detailed market analysis, including products and competitor research
  
  
• Developing appropriate sales policies
  
  
• Sales forecasting based on relevant data
  
  
• Advertising and marketing decisions
  
  
• Pricing decisions
  
  
• Branding and positioning decisions
  
  
• Decisions regarding distribution channels
  
  
• Selection, training, motivating and controlling the sales force
  
  
• Decisions regarding sales quotas and compensation plans
  
  
• Allocation of sales quotas, sales duties, and territories
  
  
• Maintenance of sales and salespersons data
  
  
• Purchase related decisions
  
  
• Creation of demand for products
  
  
• Processing and handling of the orders received
  
  
• Collection of dues for credit sales

Therefore, the structure of the sales organisation is critical for the success of a selling enterprise. A proper structure allows the firm to make the most of individual skills and knowledge whilst ensuring that the right sales reps are targeting the right customers.

The salesperson is a critical component of the sales organisation and is responsible for several activities in a sales company. A sales organisation is structured in a manner that helps to easily identify the activities performed by an individual or group.

Sales Organisations Models

The structure helps to clearly define the roles and responsibilities and promotes coordination that allows those involved to work efficiently and achieve the sales goals of the company. Sales organisations are generally modelled in three ways. Each of these models has its benefits and limitations as we will understand in the upcoming paragraphs.

Assembly Line Sales Organisation Structure

This structure is quite popular in small and mid-sized companies. In the assembly line structure, sales teams are divided based on the job description of each salesperson. It is so named because of the similarities between sales operations under this model with manufacturing assembly lines. Like a manufacturing assembly line, the strategy breaks down the sales process into individual tasks.

For example, the lead generation team is responsible for generating leads, finding information about each prospect and arranging the data in an easy to understand manner, while the sales development team is responsible for qualifying the leads that the lead generation team has gathered.

Once qualified, they are passed to the account executive team, which is responsible for closing the sale and responding to concerns. Once the sale is closed, they are passed to the customer success team, which ensures that customers stay on board and find value in the product.

The benefits of this model are the following:

• Specialisation leads to increased operational efficiency
• Increases the reps’ expertise in specific sales activities
• Quicker sales process

The limitations of this model are the following:

• Increased risk of running into silos
  
  
• The numerous handoffs may decrease the quality of customer experience
  
  
• Costs may increase due to task specialisation

Island Sales Organisation Structure

In the island model, every seller is unspecialised and possesses knowledge of several different areas. Here, the same rep manages a single customer from prospecting to on boarding, i.e., the rep generates, qualifies, and even closes leads. This type of sales organisation offers reps greater autonomy to build and grow customer relationships.

The benefits of this model are the following:

• It makes customer-seller relationships more streamlined
• It maximises the individual output of the reps

The limitations of this model are the following:

• It promotes an individualistic and competitive culture
  
  
• Managing numerous accounts at different stages of the customer lifecycle can be quite challenging
  
  
• Individual success may become more important than collaboration
  
  
• It is harder to scale up this structure

Pod Sales Organisation Structure

The pod model combines elements from both the island and assembly line models. Like the island model, a single pod manages a customer from prospecting to on boarding. But like the assembly line model, reps of each pod specialise in a specific phase of the customer journey.

The pod model is preferred by larger organisations that have a large sales force they want to organise because it is easier to assign pods to certain product lines, geographies, accounts, etc. as needed.

The benefits of this model are the following:

• Less risk of silo formation between roles and functions
  
  
• Better customer experience due to smoother handoffs as a result of enhanced collaboration
  
  
• Sales team adjustments are more responsive

The limitations of this model are the following:

• Individual motivation may be tough
• Poor performers may ride on the achievements of performers