Core Functions and Organizational Structure of the Sales Department
Main Activities of the Sales Department
The Sales Department is crucial for maintaining the company’s financial health and expanding into new markets, often managing the pace of production.
Core Functions of the Sales Team
- Setting Objectives: Create clear, realistic, and achievable objectives to foster company growth and improve results.
- Tracking Performance Indicators (KPIs): Establish Key Performance Indicators to monitor sales performance weekly and monthly. These indicators define objectives for sales plans. Key KPIs include:
- Number of Sales
- Lead Generation
- Conversion Rate
- Average Ticket
- Customer Lifetime Value (CLV)
- Generating Sales Strategies: Develop robust sales strategies, including forecasting potential problems, to ensure the team is prepared and knowledgeable about the company, leading to successful sales outcomes.
- Providing Customer Service: Focus on empathizing with and understanding the customer. Offering excellent service and helping solve problems builds trust, facilitating increased sales.
- Promoting the Company: The Sales and Marketing teams collaborate on promotional efforts, such as participating in events and executing promotional campaigns.
Key Roles within the Commercial Department
- Commercial Director
- In charge of the commercial department.
- Sales Manager
- Organizes, plans, and supervises the sales area.
- Supervisor
- Responsible for staff training.
- Sales Agent
- Handles direct customer service and sales transactions.
Sales Management Principles
- Management
- Focused on client relationships and treatment. Client interaction must be planned strategically to increase sales and benefit the company.
- Purpose
- Defining objectives and collaborating with employees on necessary activities to achieve those objectives.
- Objectives
- Organizing proposals and assigning various activities to different personnel.
Organizational Design Concepts
- Division and Specialization of Labor
- Classifying activities very specifically. If an activity is complicated, it can be divided into specialized groups.
- Stability & Continuity
- Activities are assigned based on the functional area, often without considering individual employee preferences.
Types of Sales Organization Structures
- Vertical Organization
- The traditional structure, flowing from the sales executive down to subordinate levels. This is typically suitable for medium and small companies.
- Horizontal Organization
- This structure is often adopted when marketing objectives and sales strategies require flexibility. A method must be chosen for structuring the sales force, such as:
- By geography
- By type of product
- By type of client
- By sales function
- Centralized
- Decision-making authority is concentrated at the top levels.
- Decentralized
- Decision-making power is delegated to lower levels or individual groups, allowing them to make decisions without constant approval from the manager.
Optimization of Sales Forces: Geographical Organization
This method organizes the sales force by assigning each agent a specific geographic territory to manage all sales activities for the company’s products.
Advantages
- Low Cost: Since only one sales agent covers each territory, and areas are often smaller than in other structures, travel time and expenses are minimized.
Disadvantage
- Lack of Specialization: Each salesperson is responsible for all products and all sales functions, potentially limiting deep expertise.