Page 60 - HBR's 10 Must Reads - On Sales

ZOLTNERS, SINHA, AND LORIMER
Idea in Brief

Although companies devote con- influence sales reps’ performance,
siderable time and money to man- and they affect companies’ rev-
aging their sales forces, few focus enues, costs, and profitability.
much thought on how the structure
of the sales force needs to change In this article, the authors use
over the life cycle of a product or a time-series data and cases to
business. However, the organiza- explain how, at each stage, firms
tion and goals of a sales operation can best tackle the relevant is-
have to evolve as businesses start sues and get the most out of their
up, grow, mature, and decline if a sales forces. During start-up,
company wants to keep winning smart companies focus on how
the race for customers. big their sales staff should be and
on whether they can depend upon
Specifically, firms must consider selling partners. In the growth
and alter four factors over time: phase, they concentrate on get-
the differing roles that internal ting the sales force’s degree of
salespeople and external selling specialization and size right. When
partners should play, the size of businesses hit maturity, compa-
the sales force, its degree of spe- nies should better allocate existing
cialization, and how salespeople resources and hire more general-
apportion their efforts among purpose salespeople. Finally, as
different customers, products, organizations go into decline, wise
and activities. These variables are sales leaders reduce sales force
critical because they determine size and use partners to keep
how quickly sales forces respond the business afloat for as long as
to market opportunities, they possible.

important. In addition, executives must decide when to invest in spe-
cialist sales forces. When businesses hit maturity, the emphasis shifts
to making sales forces more effective by appointing account manag-
ers and better allocating salespeople’s resources, and making them
more cost-efficient by using less expensive people such as telesales
staff and sales assistants. Finally, as organizations go into decline,
sales leaders’ attention shifts to reducing the size of sales forces and
using even more cost-efficient ways to cover markets. In the follow-
ing pages, we’ll explore in depth how companies can develop the best
sales force structures for each of the four stages of the business life
cycle. (See the exhibit “The four factors for a successful sales force.”)

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