The five steps in setting up a sales organisation are: define sales objectives, identify the activities needed, group activities into positions (by territory, product, customer or a mix), assign the right people to each position, and provide for coordination and control through reporting lines, quotas, reviews and a CRM.
A sales organisation is the structure that turns a company’s sales targets into people, territories and reporting lines. A startup selling software to 50 enterprise clients and an FMCG company reaching 10 lakh retail outlets need very different structures, but they build them through the same five steps.
Here is each step, with what it looks like in practice. For why structure matters, see the need and importance of a sales organisation.
5 Steps in Setting Up a Sales Organisation
1. Define Sales Objectives
Start with what the organisation must achieve: revenue, volume, market share, new accounts, distribution reach. A consumer goods firm might target adding 20,000 outlets in a year; a SaaS firm might target 40 new enterprise contracts. Objectives decide everything that follows.
2. Identify the Activities Needed
List the work required to hit those objectives: prospecting, demonstrations, order taking, distributor management, merchandising, collections, key-account management, sales analysis and training.
3. Group Activities Into Positions
Bundle related activities into jobs, then decide how to divide the sales force: by territory (North, South), by product (home care, personal care), by customer type (retail, institutional, modern trade) or a combination. Decide the span of control; field sales managers commonly handle 6 to 10 reps.
4. Assign People to Positions
Recruit, select and train people who fit each role. A key-account manager needs different skills from a rural sales rep. See the employee selection process.
5. Coordinate and Control
Set reporting lines, targets, sales quotas, review meetings and a CRM so managers can track performance and step in early. Link pay to the right results through the sales compensation plan.
Common Ways to Structure a Sales Force
| Structure | Works best when | Example |
|---|---|---|
| Territorial | Products are similar, customers spread out | FMCG field sales by region |
| Product-based | Products are technical or very different | Pharma reps by therapy area |
| Customer-based | Buyer types need different handling | Separate teams for modern trade, general trade, e-commerce |
| Mixed | Large firms with complex portfolios | Region plus key-account teams |
Next steps: designing sales territories and setting sales quotas.
