Your sales team organization matters, because it can affect the sales that you make and the

revenue you bring in.

Let's talk about what the different kinds of sales organizational structures are and list some pros and
cons.

Types of Sales Organizational Structures

Changes can be Big or Small. For a new business organization, structuring the sales department needs
identification of specific objectives business organization wants to achieve. Hence, Sales organization
depends upon objectives in reference to business organization.

For existing organizations, sales organization structure may need some changes if there are new
objectives or some problem is identified. Problem can be Process or People oriented.

In general, if more than 1/3 of salespeople are underperforming in “top three performance metrics”,
there is likely a sales structure problem.

There are four main types of sales organizational structures:

1. Functional Structure

2. Geographic Structure

3. Market-Based Structure

4. Product Sales Force Structure

Each one has its own pros and cons that you should consider before implementing any of the structures
in your organisation.

1. Functional Structure

Function structure refers to the sales organization structure that focuses on specialization within the
marketing team. This means that everyone has their own purpose to fulfill within the team based on
their specialties, interests, and other factors.

Having a sales team that runs by a functional structure is more efficient, but it does come with a
plethora of problems. It may sound great to have each person specialize in their tasks, but “sales” is a
much interwoven department. This means that people need to coordinate a lot in a sales team that
runs by a functional structure.

Having specialization can also be difficult when you're handling clients and accounts from different
geographic regions. Some people may not be able to handle multi-lingual accounts or they may not
know how to interact with people of different cultures.
In addition, there may be some problems with duplicate information. As tasks and to-dos run around
the office, it's likely that multiple people are going to end up with the same account at the same time.
This is because processes tend to run simultaneously in the sales team.

Having duplicate processes going around may sound efficient at first, but it can be detrimental to an
account. This is especially if both sales associates are interacting with a customer at the same time. It
can be overwhelming to perform multiple processes on the same client at once.

2. Geographic Structure

Geographic sales structures sound like what they are. Sales teams that run by this structure organize by
location.

So, let's say that you have some clients in Atlanta, others in Boston, and others in New York. With a
geographic organizational structure, you're likely to break your sales team between these cities. This is
also known as a territorial sales force structure.

Geographic sales structures are extremely popular in the sales world. They come with too many benefits
like:

 First, sales teams that are organized based on the geographical location of their clients cost
much less. It doesn't take a lot to leave certain sales reps in certain areas. If you weren't
organizing based on region, you may have to move your sales reps all over the place, which can
add up in cost over time.

 Second, a successful sales team in one geographic area leads to continued growth in that area
as well as the surrounding areas. By taking care of one region at a time, you're more likely to be
successful in caring for that region. (suitable, when expansion potential is there in an area and
company wants to expand)

 Third, clients in a certain geographical area will come to know your sales rep in that area
extremely well. Even if you have multiple, it's likely that it's a small team that will split up the
clients in the area.

If customers get to know your sales representatives well, you're more likely to make more sales and
increase customer loyalty. This means more revenue in the future and better customer relations overall.

Plus, those existing customers may bring more customers, with referrals (positive word of mouth).
That being said, it may be difficult to decide on your layout. You need to know where to place territory
lines for your sales reps to follow.

Plus, the sales reps that are located in these different areas won't be able to specialize. This can make
more difficult sales tasks harder for sales personnel. (I.e. such structure is more suitable for products
that do not require special product training or knowledge)

3. Market-Based Structure

A market-based structure, also known as a customer sales force structure, refers to a sales team that is
organized by customers or industry. More likely, they're grouped by industry.

By placing your sales reps in a specific industry, you're giving them a chance to specialize in that industry
and the needs of the companies within that industry. Plus, by becoming experts, your sales reps will
have a better chance to grow stronger relationships with your current and potential clients.

For companies that aren't focused on one industry or a few industries, it's likely that a market-based
structure would be advantageous. This is especially given that higher-ups on the management team can
bounce around from industry to industry that the sales reps are specialized in.

By organizing your team strategically in this way, you'll be able to make more sales and build stronger
bonds with your clients.

Unfortunately, market-based structures come with higher costs and difficulties in sorting the location of
different companies. Obviously, companies don't base their location on what industry they're in
(entirely). This means that some tech companies are in San Francisco, others are in Nashville, and others
are in Minnesota.

You'll have to move your sales reps around a lot to make up for the splotchy (zig-zag) geography of
different industries. This can raise your costs and leave your sales reps whipping from one area to the
next.

4. Product Sales Force Structure

The product sales force structure focuses on the products that clients make. This can be based on
individual products or product types. This organizational structure is the most specialized of all of these
options. 

With this kind of sales organizational structure, you may find that your sales reps are more attuned to
how to sell to certain companies based on the products they have. In fact, you'll have sales reps that can
handle one product type at once company and the same product type at another company.
This kind of specialization is great if your company focuses on one industry, but it can become a little
much when you're bringing multiple industries with multiple products in at once.

Sales reps can get interwoven with too many factors. This may cause communication issues and the
need for more coordination with each, individual sales rep.

Benefits of Good Sales Organization Structure:

 Reduce conflict between team members

 Increase engagement from the sales team members

 A more knowledgeable sales team that is ready to face a variety of situations

 Better coordination of activities between team members

 Better communication between coworkers

 Clearer communication of expectations and goals for the team

 Improved decision-making based on the team's expectations and goals set prior

 Possibility for more customers and more sales with a more cohesive team.

Every business needs an organized sales structure that brings every team member together. The better
organized your team is, the better they will perform. This means that they'll pull in more revenue for the
company and may even start some new business relationships.