This paper presents a Sales Force Effectiveness Framework that organizes the complexities of sales organizations, providing a holistic approach to defining and assessing sales force effectiveness. Sales practitioners can use the framework to diagnose sales force issues and develop multi-dimensional solutions, either when responding to external and internal events or when striving to improve. Sales researchers can use the framework to discover ways to expand their research focus to benefit practitioners. The framework is supported by an inventory of sales force effectiveness issues from sales leaders and recent academic publications.

Sales Force Architecture decisions encompass four questions: What is the role of selling partners in customer promotion? How big should the sales force be? How should the sales force be structured? What is the best product/market allocation of sales force resources? These decisions strongly influence both the efficiency and the effectiveness of the sales force investment and are directly linked to company profitability. Customer strategies change throughout the business lifecycle. During the startup stage, the business is focused on creating awareness and generating quick uptake in high-potential market segments that are responsive to selling effort and are likely to become early adopters of the new product or service. As business takes off and enters the growth stage, customer strategies evolve to emphasize increased penetration of initial market segments and expansion into new segments. As growth slows and the business enters the maturity stage, customer strategies focus on retention and continued effective coverage of market segments developed during the growth stage, but with added emphasis on serving these segments efficiently and profitably. Finally, during the decline stage, customer strategies take on an even stronger efficiency focus as the business aims to protect the most profitable and retainable customer relationships while exiting unprofitable segments. As customer strategies evolve throughout the business lifecycle, the emphasis of management attention to critical sales force architecture issues evolves as well. While all of these sales force architecture decisions are important during every stage of the lifecycle, the decisions that receive the greatest attention at each stage are those that have high impact, have significant scope for error, and are particularly difficult to address effectively, given the customer strategy that the business is pursuing and the challenges that the business faces during that stage. This paper summarizes how customer strategies and therefore the emphasis of management attention to different sales force architecture issues varies throughout the four lifecycle stages.

Most large pharmaceutical companies have initiated global or regional programmes to enhance sales performance. In the authors' experience with such productivity enhancement initiatives in hundreds of situtions, there have been clear differentiating factors separating the efforts that work and those that do not. Hugh gobal salesforce budgets, typically 10-20 percent of sales, are the norm for pharmaceutical companies because the drive to grow product sales - new and existing - is intense. But even as the investment has been escalating for many companies, so has the dissatisfaction with the difficulties of organising, motivating, coordinating and running these megaforces.

In this paper, we identify sales and marketing activities and common impediments to their integration. We then discuss the concept of sales-marketing integration and distinguish it from related concepts such as involvement and communication. Following this, we discuss approaches businesses can use to improve sales-marketing integration as well as their potential costs and drawbacks. The paper concludes with a set of propositions identifying the conditions under which sales-marketing integration has the greatest impact on firm performance.

Sales territory alignment is the assignment of accounts and their associated selling activities to salespeople and teams. Models, systems, processes, and wisdom have evolved over 1,500 project implementations for 500 companies with 500,000 sales territoreis. Optimization models have evolved over time to explicitly consider travel time along road networks and customer disruption. Personal computers with continually increasing speeds and storage capabilities, the Internet, and mapping databases have enabled the development of systems that communicate alignments visually to sales managers. Because of their combinatorial complexity, multiple conflicting objectives, and personnel aspects that touch everyone in the salesforce, the alignment models were unable to completely solve the sales territory alignment issues faced by companies. Consequently, processes that add local managerial knowledge were used to communicate and enhance model-derived solutions, while achieving very high implementation rates. The territory alignment team gains knowledge with every sales territory alignment. Alignment insights get codified. Alignment experts improve every model-derived solution. This wisdom becomes part of subsequent alignments and triggers further innovation. Over time, the role of processes and wisdom becomes larger than the role of the models and systems.

New developments and trends in selling and sales management are creating demands and opportunities that require adaptation and new approaches on the part of both sales organizations and academic researchers. This article summarizes critical dimensions of change in the environment that affect the practice of selling and sales management and introduces the papers that follow in this Anniversary Special Issue of JPSSM.

Over 25 years, we have developed many sales-force and modeling insights through over 2,000 projects with several hundred selling organizations in over 50 countries. Content insights are useful in making sales-force decisions. Examples are that profitability is flat for a wide range of sales-force sizes; phased sales-force growth is rarely optimal; focused strategies dominate scattered strategies; most sales territories (55 percent) are too large or too small; and no compensation plan satisfies everyone. Implementation insights concern model building, use, and implementation, for example, a model's economic value can come from such sources as reduced uncertainty, accuracy, increased speed, objectivity, and stakeholder involvement; theory and practice have different and complementary perspectives; experience and wisdom are sometimes better than models; and models provide insights, while people make decisions.

The authors have a wide-spectrum of experience in territory alignment arising from research as well as direct interaction with over 300 sales forces. Based on their experience, they believe sales territory alignment is one of the most frequently overlooked sales force productivity areas. Many sales forces are losing millions of dollars each year because of territory imbalances. Well-managed companies are overcoming the many obstaclels to good territory design by using a cogent process to realign territories. This process ensures that consistent, objective criteria are used to evaluate alignment needs, yet recognizes the importance of incorporating local management judgment.

The sales force is entrusted with the company's most critical asset, the customer, and drives a company's success. The product so extraordinary or so poor that it overrides the sales force's best (or worst) efforts is rare. Already challenged to handle everything from specialized, high-tech products to OTC product pricing, packaging and supply issues, the medical sales organization must also adapt to the buyer's changing needs and to the Internet's mushrooming possibilities. Product proliferation and buyer consolidation require flexibility and responsiveness; consolidation and competition within the market necessitate change. The web of computers connecting customers with each other and with suppliers provides a new dimension in information dissemination and communication that was previously thought impossible.

An agency theoretic model-based approach that can assist sales force managers set optimal sales quota-bonus plans.

In many organizations, marketing investment-level decisions precede the associated resource allocation decisions and are based on market-level sales response data, often with no attention to the impact of rules used to allocate resources to submarkets. Such top-down budgeting is commonly based on a perception that aggregate sales and profitability are affected much more by the level than by the allocation of the investment. The authors analyze the effects of different resource allocation rules assuming alternative specifications of submarket sales response functions and show that allocation decisions significantly influence aggregate sales response functions, investment-level decisions based on these functions, and realized profit. The authors also show aggregate sales and profit are usually more sentitive to improvements in allocation rules than to increases in investment levels and conclude that resource allocation decisions warrant more attention in marketing budgeting.

This paper analyzes the problem of designing the structure of multiproduct sales forces selling in an environment where purchase decisions are made on a straight rebuy or modified rebuy basis. It addresses two key issues pertaining to structure: How many sales forces should the firm have and which products should be assigned to each sales force? First, the key determinants of sales force structure are identified and described. Next, a mathematical programming model is formulated that can aid firms in designing the structure of their multiproduct sales force. An application is then described in detail including sales response specification, parameter estimation, solution procedure, and model implementation. Insights from several of the numerous implementations of the model in the pharmaceutical industry are also summarized.

Distribution channel design is a complex decision involving (a) the strategic choice of the appropriate channel structure, and (b) the tactical selection of the appropriate intermediaries. This paper presents a decision framework and a model to aid management in the tactical selection of the channel intermediaries and the target markets they should serve. The proposed model-based decision approach is illustrated with an actual industrial marketing application. The optimal intermediary network selected by the model is compared to an intuitive network recommended by sales management.

The results from the computational testing of an algorithm designed to solve large-scale multiple-choice knapsack problems are described. Data list structures, sorting techniques, and fathoming criteria are investigated. It is determined that considerable storage space can be eliminated from the original implementation of the algorithm without affecting execution time. Also the insertion of a heap sort in the algorithm does provide a substantial reduction in computing time when solving the larger problems. Theoretical results relating to the multiple-choice knapsack are presented.

The future of a business depends on the future of the markets it serves. To ensure its future viability, a business offering a multiple end-use product or service must assess the ability of each of its current or prospective markets to contribute to the goals and objectives of the business. A structured approach to market selection and evaluation is presented that can aid in the planning required to allocate limited resources among multiple end-use markets.

The sales territory alignment problem may be viewed as the problem of grouping small geographic sales coverage units into larger geographic clusters called sales territories in a way that the sales territories are acceptable according to managerially relevant alignment criteria. This paper first reviews sales territory alignment models which have appeared in the marketing literature. A framework for sales territory alignment and several properties of a good sales territory alignment are developed in the course of the review. A general sales territory alignment model which accommodates these properties is developed. A solution procedure for the general model is presented. Finally, an actual implementation of the general model is described. The implementation provides a comparison of the general model with a similar model which has been frequently cited in the marketing literature.

The evolutionary change in an integer programming model and resulting algorithmic modifications are traced for an actual sales force time allocation application. The need to solve problems quickly dictated a special purpose structure-exploring algorithm. But as new practical considerations arose and were incorporated into the model, algorithmic modifications were needed.

A specially-structured integer programming model, called the multiple-choice nested knapsack model, is developed in this paper. The model is characterized by variables which are partitioned into multiple-choice sets and resource constraints which are nested across the multiple-choice sets. The application of the model in the areas of merchandise catalog planning and sales resource allocation is described. An algorithm for the model is presented and the results of the computational testing of the algorithm are provided.

An optimization model for the audit-staff scheduling decisions faced by public accounting firms is developed in this paper. The model is an integer programming model designed to assign audit-staff to audit engagements in the most effective way. It is shown how the model can be incorporated into a decision support system for audit-staff scheduling. Other components of the decision support system include a judgmental scheduling system and a data base containing relevant scheduling information. The interrelationship between these components is described in detail. Finally, the optimization model is compared with other models which have been developed for this decision.

A versatile computer model for audit-staff scheduling based on a zero-one integer program was presented by Balachandran and Zoltners [1981] (BZ). This paper extends the work of BZ by demonstrating how precedence constraints, due dates, penalty costs, resource leveling, and other audit considerations can be added to the zero-one integer program for audit scheduling. These additional features help improve the realism of the scheduling model, thus making the model more practical for applications.

A practical conceptual framework for sales resource allocation modeling is presented in this paper. A literature review of sales resource allocation models is described in terms of this framework. The conceptual framework also lends itself to several integer programming models which may be used to address the variety of sales resource allocation decisions faced by every sales organization. A general model for sales resource allocation is developed which incorporates multiple sales resources, multiple-time periods and carryover effects, non-separability, and risk. Several actual model implementations are discussed which illustrate the practical application of the integer programming models. The model implementations utilize recent advances in integer programming theory which enables sales managers and sales representatives to quickly develop and evaluate alternative sales resource allocation strategies.

The bounded interval generalized assignment model is a many-for-one assignment model. Each task must be assigned to exactly one agent; however, each agent can be assigned multiple tasks as long as the agent resource consumed by performing the assigned tasks falls within a specified interval. The bounded interval generalized assignment model is formulated, and an algorithm for its solution is developed. Algorithms for the bounded interval versions of the semiassignment model and sources-to-uses transportation model are also discussed.

Deciding which items to include in a sales catalog and how much space should be allocated to each item is a major planning problem facing many large retailers and catalog firms. The steps in the catalog planning process include compiling a list of candidate items, developing one or several ad size "strategies" for each item, estimating the sales and contribution which would be realized as a result of each strategy, and then selecting a set of strategies which effectively allocate the space available in the catalog to some subset of items. This paper describes the planning process in detail. All integer programming model is presented which incorporates merchandising policy constraints in optimally choosing the items and ad strategies to be included in the catalog. The organizational implications of using such a model are also explored. A simple example of the application of the model to planning the tennis equipment lines of a major mass merchandiser appears as an appendix.

This paper addresses the time management problem confronted by sales representatives. The sales representative planning his itinerary must decide the best way to ration time among the accounts comprising his territory. The time management problem is formulated as an integer program whereby each admissible call frequency for each account is represented by a zero-one decision variable. A branch-and-bound integer programming algorithm for this problem is presented. The algorithm is unique in that two integr programming formulations of the problem are used simultaneously in the search procedure and an approximation-cumrelaxation is evaluated at each branch in the search. Computational testing of the algorithm shows that it can solve many realistic time management problems optimally in fractions of a second.

This paper discusses the inadequacy of the gross margin criterion for pricing a product line during times of resource scarcity. A decision criterion called the contribution-per-resource unit is developed and applied when a firm desires to maintain the product line's current prices. A pricing and product-mix determination procedure is illustrated for firms wishing to analyze the effects of potential price increases.

The sales territory alignment problem may be viewed as the problem of grouping small geographic sales coverage units into larger geographic clusters called sales territories in a way that the sales territories are acceptable according to managerially relevant alignment criteria. This paper first reviews sales territory alignment models which have appeared in the marketing literature. A framework for sales territory alignment and several properties of a good sales territory alignment are developed in the course of the review. A general sales territory alignment model which accommodates these properties is developed. A solution procedure for the general model is presented. Finally, an actual implementation of the general model is described. The implementation provides a comparison of the general model with a similar model which has been frequently cited in the marketing literature.

The multiple-choice knapsack problem is defined as a binary knapsack problem with the addition of disjoint multiple-choice constraints. The strength of the branch-and-bound algorithm we present for this problem resides with the quick solution of the linear programming relaxation and its efficient, subsequent reoptimization as a result of branching. An implemented version of this algorithm has performed well on a large set of test problems. We cite computational results as well as a comparison with a previously reported algorithm. Several useful applications of the multiple-choice knapsack problem are also suggested.

This paper defines the components and characteristics of an important class of models called weighted assignment models and identifies these elements in a number of existing and potential applications. The weighted assignment model represents problems with the following characteristics: A set of tasks must be divided among a set of agents, and each task must be completed by only one agent. Tasks may be completed at one of several predetermined levels. When an agent completes a task at some levels, a resource possessed by the agent is consumed and a system disutility is incurred. The weighted assignment model may be used to determine the best assignment of tasks to agents and the task completion levels so as to minimize total system disutility while satisfying the agent resource constraints. In the first part of the paper, a general formulation is presented, and its relationship to assignment models, transportation models, knapsack models and various fixed charge models is established. In the second part of the paper, a number of applications are described which demonstrate the usefulness of weighted assignment models. These applications include machine loading problems, personnel assignment problems and districting problems. Computational results for several of the applications are presented to document the tractability of the models.

In this paper, the analytical representation of food preference is used in a separable non-linear program to yield the serving frequencies of menu items for a finite time horizon. The frequencies obtained in this way insure cost and nutritional control. Subsequently, the scheduling problem dealing with item assignments to meals and days is formulated as an integer program consisting of several transportation problems linked by weekly nutritional constraints. This problem is solved using a branch and bound algorithm which employs Lagrangian relaxation to obtain bounds and to decide on branching strategy.

A recent article described a mathematical programming model and heuristic solution procedure to realign sales territories. This report presents two linear integer programming models for sales territory alignment to maximize profit. Emphasis is placed on the development of models which are easy to implement.

Some easy postoptimality analysis for zero-one programming is developed. First, a procedure is presented for obtaining a set K of 0-1 solutions whose objective function values are within a specified tolerance of the optimum. Then sufficiency conditions for K to contain the optimum of a revised problem are derived. Computational experience with a number of test problems indicates that K can be economically obtained and that the sufficiency tests provide a significant postoptimization capability.

Sales leaders face constant challenges and opportunities. This book provides current and aspiring sales leaders with innovative yet practical solutions to many of the most common issues faced by today’s sales organizations. The book shows how to: • Assess how good your sales force really is; • Identify sales force improvement opportunities; • Implement tools and processes that have immediate impact on sales effectiveness. Written by the authors of a leading series of sales management guidebooks, this 200-250 page book blends strategic insight with pragmatic advice.

The book is designed to help sales, marketing, finance and human resource managers and executives obtain the concepts, tools and processes necessary to create incentive compensation plans that will empower the sales force and profoundly impact the organization. Bringing together a depth of experience, theory, insight and detail, this comprehensive sourcebook describes the major compensation issues and explains in detail innovative approaches for designing and implementing effective sales force incentive plans. The book is filled with real-world examples and case studies that can help you create incentive plans to motivate salespeople in a variety of sales roles including field sales, telesales, service reps, and key account managers. The book is the third in a series of practical sales management guidebooks written by these leading authorities in the field of sales force management.

Sales Force Design for Strategic Advantage focuses on strategic aspects of sales force management. Until now, business executives and managers facing sales force design challenges have had few good options when seeking a reference book. Sales force management books tend to be broad and general or they focus on topics such as sales force compensation and training. In fact, we could not find a book (before this one) that focused specifically on sales force design. All general sales management textbooks have chapters that address sales force design issues, but they tend to cover the issue superficially and lack practical insights. Alternatively, several consultants have written books on marketing and channel strategies which include sales forces, but while interesting and useful, these books lack the depth of experience, theory, insight, and detail that a sales executive facing a significant sales force design challenge requires.

A comprehensive compendium of knowledge, ideas and techniques for improving sales force effectiveness in today’s rapidly changing environment, based on in-depth analysis and insights from more than 25 years of teaching, research and consulting with hundreds of companies in more than 50 countries, and providing a practical, hands-on guide to sales management.

Using a fresh mix of talented cartooning and seasoned management, marketing, and learning expertise, The Fat Firm reveals the inner workings of real companies. It illustrates a host of situations in which people, cultures, and processes allow excess, waste, and inefficiency-in other words, fat-to creep into a firm and weaken its competitive edge. Most important, the book offers innovative advice on how firms can slim down and stay successful over the long haul.