What is the most effective sales team structure for a small business?

As a small business owner, you know how important it is to have a sales team that can generate leads, close deals, and retain customers. But how do you organize your sales team to achieve these goals? What is the most effective sales team structure for a small business?

1 The common sales team structures

When structuring your sales team, consider your industry, product, market, and customer segments. Common sales team structures include territory-based, where reps are assigned to specific geographic areas; product-based, where reps are specialized in selling one or more products or services; customer-based, where reps are divided into groups based on the type, size, or industry of the customers they serve; and hybrid, which combines two or more of the above structures. A hybrid approach can create a more flexible and customized approach.

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2 The advantages and disadvantages of each structure

When selecting a sales team structure for your small business, it is essential to weigh the pros and cons of each type. Territory-based structures can reduce travel costs and increase local knowledge, but can create uneven workloads and territorial conflicts. Product-based structures can enhance product expertise and improve customer satisfaction, yet increase training costs and create silos. Customer-based structures can improve customer loyalty and referrals, but can also increase complexity and duplication. Finally, hybrid structures offer more flexibility, yet require more overhead and communication challenges.

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3 The factors to consider when choosing a structure

When selecting a sales team structure for your small business, you need to consider various factors, such as your business goals and the complexity of your product. Additionally, take into account the diversity of your customers and the length of the sales cycle. Finally, factor in the size of your sales team and how you manage, train, and motivate them. By considering all these elements, you can choose the best solution for your business.

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Harry Chalakyan

CEO at Novagel 1 Ltd
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Firstly, prepare your metrics by using ERP or CRM system trying to get as much potential for your structure. Then, you need the right team and in my own point of view it should be organized by region and by type of the customers so, probably you'll need key accounting as well.

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4 The best practices to follow when implementing a structure

Once you have decided on a sales team structure for your small business, you need to follow some best practices to ensure its success. It is imperative to communicate clearly with your sales reps, explaining their roles, responsibilities, and expectations. Additionally, aligning incentives with the chosen structure and business goals is essential, as well as rewarding performance and achievements. Leveraging technology is also key, using a CRM system that supports the structure and helps track and manage sales activities. Finally, evaluating and adjusting should be done regularly by monitoring performance and outcomes using relevant metrics, analyzing the data, and making changes as needed.

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Tom Miller

Risk Management | Revenue Growth | Forecasting | Client Retention | Strategic Planning | Performance Management | Process Optimization | Cross-Functional Collaboration | Team Management | Stakeholder Management
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Communication is the most critical success factor for me. Next are strategic alignment and data-driven decision-making. Now, a best practices checklist: • Align roles and objectives efforts with the company objectives and document them in the sales plan. • Link rewards to performance and business objectives with public recognition of the exceptional achievements of individuals and teams at all levels. • Use CRM systems tailored to sales structures for efficient tracking and management and use it as a sales tool rather than a management tool (a critical success factor!). • Implement clear selection and advancement criteria for all stages in the sales process. • Regularly review performance metrics to refine strategies and drive improvement.

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5 The examples of successful sales team structures

To inspire you, here are some examples of successful sales team structures used by small businesses in different industries. For instance, a software company that sells a cloud-based platform for project management has a hybrid sales team structure that combines product-based and customer-based segments. Each sales rep specializes in selling a specific product module and serves a specific customer segment. Another example is a catering company that offers menus and services for different occasions and events, which uses a customer-based sales team structure that divides its reps into groups based on the type of event. Additionally, a clothing store that sells apparel and accessories for men, women, and children has a territory-based sales team structure that assigns its reps to different regions. Each rep is responsible for all the customers and prospects in their assigned region.

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Derrick Chevalier

𝑵𝒆𝒈𝒐𝒕𝒊𝒂𝒕𝒊𝒐𝒏 𝑺𝒌𝒊𝒍𝒍𝒔 ▩ 𝑴𝒆𝒅𝒊𝒂𝒕𝒊𝒐𝒏 ▩ 𝑬𝒙𝒆𝒄𝒖𝒕𝒊𝒗𝒆 𝑷𝒆𝒂𝒌 𝑷𝒆𝒓𝒇𝒐𝒓𝒎𝒂𝒏𝒄𝒆 𝑪𝒐𝒂𝒄𝒉 ▩ 𝑨𝒖𝒕𝒉𝒐𝒓 ▩ 𝑻𝒓𝒂𝒊𝒏𝒆𝒓 ▩ 𝑪𝒐𝒏𝒔𝒖𝒍𝒕𝒂𝒏𝒕 ▩ 𝑲𝒆𝒚𝒏𝒐𝒕𝒆
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Implement a hybrid commission/bonus fee structure that encourages collaboration among the sales team. Sales teams inevitably reflect an 80/20 performance curve, where 80 percent of sales will be made by 20 percent of the team. The best sales people have no incentive to help, to guide, or to contribute to the closing ratios of the other team members. Give them reasons by structuring split commissions, and incentives for assisting other team members in closing sales. Then add a tiered bonus system based on the team's ability to hit specific targets such as a dollar figure, overall closing ratio of sales calls to closed sales etc. The best people will earn more, the average people will earn more, espirit de corps,, will improve.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Abdolreza Fahimi

Senior executive
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It is absolutely depends on the level of product complexity and number of audiences For basic simple product with huge demands sales team shall maintain product availability through the sales channel for e.g. FMCG, however for technological products with limited audience, the team should be capable enough for transferring product knowledge, understand customer needs and … indeed in that case every single sales could be a project which need to plan Of course there are a lot of categories and segments in between which would tuned accordingly The geographical sales team structure only works when there are different regional regulation, significant cultural difference,.. otherwise it only means a territory for inter team competition

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What is the most effective sales team structure for a small business?

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1 The common sales team structures

2 The advantages and disadvantages of each structure

3 The factors to consider when choosing a structure

4 The best practices to follow when implementing a structure

5 The examples of successful sales team structures

6 Here’s what else to consider

Small Business

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What is the most effective sales team structure for a small business?

1

2

3

4

5

6

1 The common sales team structures

2 The advantages and disadvantages of each structure

3 The factors to consider when choosing a structure

4 The best practices to follow when implementing a structure

5 The examples of successful sales team structures

6 Here’s what else to consider

Small Business

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