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May 5, 2010Customer Strategist Ycel Ersz:

Organizing Sales Teams Around the Customer

In today's complex selling environment, many organizationshave come to realize that relying on new product features isnot enough to attract more customers. Many are discovering that they need toorganize internally around their customers.

This involves creating new avenues of sustained growth, which hinges on evolvingthe sales strategy. Sales organizations should adopt a targeted customersegmentation approach that aligns sales with customer segments.

This alignment requires a reorganization that begins with segmenting customersby their transaction histories, buying processes, and needs and preferences.When salespeople understand customers' net present value along with keysegmentation, it maximizes conversion ratios and increases activity per customer.

By focusing on segmentation efforts, executives can better assess customers'potential value and ways to realize this value. Different buying processes anddecision mechanisms of buyers necessitate different sales services to differentcustomers.

Some customers will require a specialized sales force while others do not. Thesales force selling aircrafts to airlines, for instance, will require sales staff withtechnical knowhow, as well as staff knowledgeable about maintenance andfinancing. Dealing with a grocery chain, on the other hand, is mostly about hardbargaining.

When organizing a sales force, there are five approaches:

1. Generalistic: With this approach, each sales representative sells the entire

product range to all customers in each defined territory. This tends to be themost efficient structure, but the more heterogeneous the environment, the more

effectiveness will suffer. This strategy works best when companies have fewunsophisticated products, very similar customers with simply buying processes,and when efficiency matters.

2. Market based: Organizations are segmented by geography, sector, account

size, or customer needs and each segment is served by a different group withinthe sales organization. Depending on customers' buying process, the team mayinclude one or more people. This approach works best when there are differentcustomer segments and a complex buying process, when customer knowledgemakes an important difference, and when efficiency doesn't bring effectiveness.

3. Product based: Sales teams are assigned to product or product groups,

ideally in parallel with marketing teams assigned to the same products.Depending on the sophistication of products or customers' buying processes,team sizes may vary. This works best when the company sells broad,sophisticated, and diverse products and product knowledge is of the utmostimportance.

4. Activity based: In this approach, sales teams are organized around the salesprocess. A specialist team performs different sets of tasks and accounts are setup according to acquisition versus account maintenance, as well as nationalversus local teams. This works best when there are complex activities in theselling process that require special knowledge and when the tasks within thesales process require different skill sets.

Don Peppers and Martha Rogers, Ph.D., coined the termone-to-one marketing more than 15 years ago. They are

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Customer Strategist Ycel Ersz:Organizing Sales Teams Around theCustomer

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tomer Strategist Ycel Ersz:
Organizing Sales Teams Around ... http://www.peppersandrogersgroup.com/blog/2010/05/organizing-sales...

2 10/11/2011 20:37

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tomer Strategist Ycel Ersz:
Organizing Sales Teams Around ... http://www.peppersandrogersgroup.com/blog/2010/05/organizing-sales...

2 10/11/2011 20:37