| Personal Selling and Sales Promotion 469

Chapter 16 | Personal Selling and Sales Promotion 469

The product structure can lead to problems, however, if a single large customer buys many different company products. For example, several different GE salespeople might end up calling on the same large healthcare customer in a given period. This means that they travel over the same routes and wait to see the same customer’s purchasing agents. These extra costs must be compared with the benefits of better product knowledge and attention to individual products.

Customer (or market) sales force Customer Sales Force Structure. More and more companies are now using a customer structure

(or market ) sales force structure , in which they organize the sales force along customer

A sales force organization in which or industry lines. Separate sales forces may be set up for different industries, serving current salespeople specialize in selling only to

certain customers or industries. customers versus finding new ones, and serving major accounts versus regular accounts.

Many companies even have special sales forces to handle the needs of individual large cus- tomers. For example, above its territory structure, Stanley Black & Decker has a Home De- pot sales organization and a Lowe’s sales organization.

Organizing the sales force around customers can help a company build closer relationships with impor- tant customers.

Consider Hill-Rom, a leading sup- plier of medical equipment, including hospital beds, stretchers, and nurse communication systems, which recently restructured its product-based sales force into

a customer-based one: 4

Hill-Rom divided its sales force into two customer- based teams. One sales force focuses on “key” customers—large accounts that purchase high- end equipment and demand high levels of sales force collaboration. The second sales force focuses on “prime” customers—smaller accounts that are generally more concerned about getting the fea- tures and functions they need for the best possible price. Assigning the separate sales forces helps

Leading medical-equipment supplier Hill-Rom recently adopted a

Hill-Rom better understand what the different

customer-based sales force structure, which helped it focus more intensely

types of customers need. It also lets the company

on the needs of large key customers. In the two years following the sales force redesign, sales growth doubled.

track how much attention the sales force devotes to each customer group.

For example, prior to restructuring its sales force, Hill-Rom had been treating both key and prime customers the same way. As a result, it was trying to sell smaller prime customers a level of service and innovation that they did not value or could not afford. So the cost of sales for prime customers was four to five times higher than for key customers. Now, a single account manager and team focus intensely on all the areas of each key customer’s business, working together to find product and service solutions. Such intensive collaboration would have been difficult under the old product-based sales structure, in which multiple Hill-Rom sales reps serviced the different specialty areas within a single key account. In the two years following the sales force redesign, Hill-Rom’s sales growth doubled.

Complex Sales Force Structures. When a company sells a wide variety of products to many types of customers over a broad geographic area, it often combines several types of sales force structures. Salespeople can be specialized by customer and territory; product and territory; product and customer; or territory, product, and customer. For example, Stanley Black & Decker specializes its sales force by customer (with different sales forces calling on Home Depot, Lowe’s, and smaller independent retailers) and by territory for each key cus- tomer group (territory representatives, territory managers, regional managers, and so on). No single structure is best for all companies and situations. Each company should select a sales force structure that best serves the needs of its customers and fits its overall marketing strategy.

470 Part Three | Designing a Customer-Driven Strategy and Mix

A good sales structure can mean the difference be- tween success and failure. Over time, sales force struc- tures can grow complex, inefficient, and unresponsive to customers’ needs. Companies should periodically review their sales force organizations to be certain that they serve the needs of the company and its customers.