In Match Your Sales Force Structure to Your Business Life Cycle, they start comparing how you should constantly modify the sales force you use over the product’s or business’ life cycle. There are four factors that over time, companies must specifically alter: size, role, degree of specialization and effort. One of the trickiest things with salespeople and customers is that they do not aim towards change, they strongly resist it. Both people get to comfortable, which often leads to failure of meeting targets, which is when they are forced to change. In difference to earlier years, businesses know go through the four phases a lot quicker, which means that the sales force must be flexible. As said on the case, research has shown that businesses are more successful when their sales force structures change in a way that they loosely correspond to the stages a product of business goes through in their life cycle.
One of the critical decisions smart companies focus on is to either create their own sales forces or just depend on selling partners. But when businesses hit maturity, they must focus on being more cost-efficient and focusing on making their sales forces more affective. When forming their own sales force, it could end up costing a business lots of money if they don’t make the right decisions. Therefore, when you chose to tie up with other companies, you do not have to pay any costs of building and maintaining sales forces. But by doing this, many businesses end up depending on their selling partners for too long, since they do not have control over the selling activity and cannot rely on customer relationships.
When starting up a company, it is obvious that product lines are narrow, and you have a small market. When they start expanding, sales managers have to focus on two things: size and specialization. In order to achieve as a company, you will need to set up a reputation. But just like anything, companies will hit their maturity or decline period. When this happens, salespeople will try to change their way of selling, companies will need to consider splitting up their sales forces and form two groups: those focused on the new products and those focused on the old. By optimizing resources, companies will focus on the effectiveness of their sales force. This means in focusing on their salespeople, not on the customers since you do not have factual data in which product they will want, yours or your competitor’s. What companies should avoid is playing it easy by selling easy-to-sell products. Effectiveness does not come easy for a company, just like everything else. They will need to find the most inexpensive ways for them to get their work done.
When in the decline period, this means that the company’s customers have shifted to their rivals due to products losing their edge. It may be possible that decline periods are temporary, which means that executives focus on the probability of a turnaround. These often demand a different sales force than what the company already has, which almost always means the possibility of downsizing sales forces in the short run.
After reading this case, I would have to agree with it for the most part. I do think that companies have to constantly change or update their sales force, since comfort never equals to success. Customers and markets are always changing, times are evolving. When discussing the four stages of a company, I had to agree with it for the most part. For example, nowadays, society is more centered with everything being paperless. Years ago magazines and newspapers were practically the norm of what an adult should read if I’m honest. But now since everything is electronic, you don’t have to read in a newspaper about current events. You can just turn on the television and keep up to date with events happening at your hometown, state, country, or even neighboring countries.
Last semester, I took a class where I had to research the Meredith Magazine company. I had to look up different magazines that they had and their target audience, and be able to see which their strongest suit was, and which was not. Meredith is known for its home, food, and family magazines, having a high growth rate. But ever since we have become a paperless-society, people do not buy magazines as much as they used to. This means that Meredith had to do something about it while being at their maturity phase. They did go through their decline phase, which meant that their sales were not as good as they used to be. As sales started declining, executives over at Meredith Magazine came up with a solution, which was to be a part of this electronic-centered society. Today, you can read many articles featured on the magazine on Meredith’s website. Many magazine companies and even newspapers are also doing this technique.
The only thing I would disagree with this text is the part where it talks about salespeople and customer relationships not being that important for the sales force. As a customer, I do consider buying a product even more if the relationship I have with the worker is great. It shows interest and knowledge of the product, so I feel that it helps when I work towards deciding.
I feel that this article is relevant to the Sales Management class since we focused on targeting the right audience and how to approach them with certain factors you always have to take into consideration, such as their background. I feel that the article did have way too much parts that didn’t seem to fit into the reading, and often I had to really focus on what I was reading. Maybe give more examples that is known to almost every generation. Besides that, the article was well-written.