Research Details

Abstract

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.

Type

Article

Author(s)

Andris Zoltners, Prabhakant Sinha, Sally Lorimer

Date Published

2006

Citations

Zoltners, Andris, Prabhakant Sinha, and Sally Lorimer. 2006. Match Your Sales Force Structure to Your Business Life Cycle. Harvard Business Review.(7-8): 81-89.