Although companies devote considerable time and money to managing sales forces, few focus much thought on how the structure of the sales force needs to change over the life cycle of a product or a business. The organization and goals of a sales operation have to evolve as the organization goes through the stages of businesses start up, growth, maturity and decline if they want to continue maximizing profitability and customer share.

Although companies devote considerable time and money to managing sales forces, few focus much thought on how the structure of the sales force needs to change over the life cycle of a product or a business. The organization and goals of a sales operation have to evolve as the organization goes through the stages of businesses start up, growth, maturity and decline if they want to continue maximizing profitability and customer share.

Specifically, companies must consider and alter four factors over time: the differing roles that internal sales people and external selling partners should play, the size of the sales force, its degree of specialization, and how the sales people apportion their efforts among different customers, products and activities. These key factors are critical because they determine how quickly sales forces respond to market opportunities. They influence sales people’s performances and affect company’s revenues, costs and profitability.

Many companies are out of step with their sales force structure and business life cycle carrying excessive and often unnecessary cost in the sales operation.

During the start-up, smart companies focus on how big their sales force should be and on whether they can depend upon selling partners. In the start-up phase you are creating awareness and you need to generate fast product up-take. The most critical factors in this phase is the need for both selling partners and a sales force to generate the required momentum in the market.

In the growth phase they concentrate on getting the sales force degree of specialization right and the size right. In this phase the degree of specialization in the sales force is significantly increased as they are required to penetrate deeper into existing segments and develop new ones.

When businesses hit maturity, companies should better allocated existing resource and hire more general purpose sales people. The focus in this phase is on efficiently serving and retaining existing customers. The degree of specialization remains relatively high to meet customer’s individual needs.

Finally as organizations go into decline, wise sales leaders reduce sales force size and use partners to keep the business afloat for as long as possible. The emphasis remains with efficiency, protection of critical customer relationships and exiting of unprofitable segments.

The necessity of reviewing your sales force structure and business life cycle or product life cycle is a priority for companies seeking increased profits.

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