Sales organization charts are an important tool for businesses that want to optimize their sales operations. By creating a chart, you can visualize the different roles and responsibilities within your sales team. This can help you improve communication and collaboration between team members, as well as better manage your territory and customer base.
In this guide, we will discuss sales organization charts for different types of sales organizations and their corresponding reporting structures. We will also provide tips on organizing specialty functions within a company.
Four types of sales organization charts and their pros and cons
The structure of a sales organization has a huge impact on its success. A rep who is familiar with one region may have difficulty selling to other industries across the country. If each product requires specialized technical knowledge, it might not be a good idea for reps to represent all products by territory.
It is simply not true to say that sales skills can be used in all situations. Ask a software representative who only sells to manufacturing companies to be able to sell hardware in all verticals. They won’t be as proficient in one of the two.
Salespeople who excel are able to thrive in a particular environment. Org charts are the foundation of that environment.
What is a sales organization structure?
Structure refers to the organization of a sales team. Businesses may use an inside or outside sales model, geographic or industry territory approach, product line or type, SMB/mid-market/Enterprise split, or some combination of the above.
What does a sales structure design have to do with selling effectiveness? Why is it important that you choose the right org charts for your company?
Below is a chart which outlines the pros & cons of four common sales organisation charts. You can divide accounts by:
- Service/product line
- Customer/account size
- Industry/vertical segment
Let’s take a look into their pros and cons.
1. Structure of a sales organization based on territory or geography
By organizing sales teams by geography or territory, each salesperson can get to know a specific area. They can build relationships with local businesses and learn about their regional competitors.
It is easier to evaluate your reps when you consider the potential market and performance of a specific area. It is important to keep in mind that sales reps can be restricted by geography and territorial organizational structures, which can lead to silos in the sales team that can limit their ability to develop cross-functional expertise.
2. Structure of a sales organization based on product/service lines
If your company sells these products or services, it can be a great way for salespeople to align with each other. It’s similar to geographic expertise. This allows reps become experts on a product and can communicate its benefits to clients.
This structure has the potential downside that sales reps may be more focused on features than the best solution for customers.
3. Structure of the sales organization based on account or customer size
Another popular way to organize your sales staff is by account size. An SMB account requires a different skill set than an enterprise account.
These businesses have different goals, ask differing questions, and have different budgets. By allowing your customers to learn about the intricacies and details of these accounts, you can better serve your customers as well as your reps.
This organizational structure can make managing resources more difficult for teams. This structure is not sustainable if there is constant communication between members of the team to ensure that clients receive the same level service.
4. Structure of a sales organization based on vertical or industry
Different industries will use your product/service in different ways. Your sales team must be knowledgeable about how your product/service can work in different industries.
This is the most expensive way to set up a sales department.
Why are sales organization charts important? A clearly defined visual representation of your sales team’s organization can help teams work together, improve communication efficiency, and help other departments identify the right people to reach out to for better alignment.