Stellar sales talent is essential to any team’s success, but it isn’t everything. Even the most skilled reps can flounder if they aren’t operating within an effective organizational structure.
If, for example, you take someone great at selling cybersecurity solutions to tech companies and have them switch to marketing hospital technology, they likely won’t perform as well. Your sales management process must be optimized for your staff, and vice versa.
A sales management structure — or sales organizational structure — is the design of your sales team. Your management structure takes into account whether you’re using an inside or outside sales model, your territory approach, your product model and more. Pairing an effective structure with data from a sales management CRM system can result in an incredibly high-performing team.
Salesforce's 2023 State of Sales report revealed that sales reps spend only 28% of their week selling, compared to 34% in 2018. That means they're spending too much time on mundane work. High-performing sales teams are relieved of distractions by strictly enforced, automated or closely monitored sales practices put in place by management.
When a sales team is well-structured, there are clear lines of communication to help reps make quick decisions and get deals over the line. Each person has a full understanding of their responsibilities. Collectively, this leads to reduced conflict between team members and increased engagement with prospects.
There are four types of sales structures commonly used by today’s businesses:
Which one you’ll choose will depend on what you’re selling, how many people are on your team and who your clients are.
This approach assigns each rep a specific territory demarcated by geographic location. It lets each person on your team become very familiar with their assigned segment of your audience.
That familiarity fosters building relationships with local businesses and vendors, tracking sales targets and keeping an eye on competition in the given region. A geographic approach can also make it easier for managers to track a rep’s performance by examining the numbers by region.
Geographic structures are organized with a sales manager at the top of the chain. Under them are territory managers in charge of reps for their specific region. The sales reps on the ground comprise the bottom level.
Rather than a geographic area, people on your team are assigned to specific products and services. They become experts in that offering, and that deep knowledge aids them in their work.
This structure type has a sales manager at the top with direct reports grouped by product line. There are no intermediary managers in this case.
Dividing reps by customer type or size of account is another popular way to structure sales teams. Given that it takes different skills to sell to a small business versus an enterprise-stage one, it wouldn’t make sense to assign all sales reps to every account regardless of size.
The goals and budgets of these accounts will be different, as will the questions they ask. You have to be attuned to each stakeholder's needs and decision-making power. This sales structure allows your reps to become experts in their respective accounts.
As with the product or service line structure, groups of reps report to a sales manager with no intermediary. Each group of reps handles a different size of account — usually divided into small to medium, mid-market and enterprise.
This organizational structure makes the most sense for companies that have a product or service used by clients in multiple industries. Reps become experts on their assigned industry verticals, making them well-positioned to offer your solution in a customized way.
This structure is similar to a regional organizational chart. At the top is the main sales manager and under them are vertical leads, to whom the reps on the ground report.
Once you’ve nailed down which sales structure your company needs, visually illustrate it. Visual representations help everyone at your business track the chain of command. They also help other departments know who to communicate with if the need arises.
➡️ You don’t need to sketch your flow chart with pen and paper or haphazardly render it with text boxes in Word. Platforms like Lucidchart let you map out a flowchart in no time.
No matter which of these organizational structures works best for your team, there are ways to make everyone more efficient. If you haven't automated opportunity tracking, quoting, follow-up notifications and more, get inspired with these sales automation success stories.