// Blog

4 Key Components of Your Sales Organization's Structure

blog author
Written by Mike Schultz
President, RAIN Group

In sales forces of any size, changing the sales organization structure is an uphill battle. Structure relates to the organization of selling at the company, including sales compensation, territory design, account and lead assignments, and more.

Too often we see companies with sub-par structures and leaders who are unwilling to change.

Leaders who are willing to do what it takes to optimize sales structure have better odds of achieving Elite and Top Performance. Learn how we define Elite and Top Performance vs. The Rest in our recent sales study.

For example, consider account and lead assignment. In our Top-Performing Sales Organization research, we found that only 36% of The Rest agree that accounts are assigned to the people best suited to succeed with them versus 77% of Elite Performers, and 60% of Top Performers.

In other words, nearly two-thirds of The Rest do not agree accounts are handled by the right people. And The Rest represent 80% of all respondents.

A gut response might be that this is inexcusable. However, it’s understandable.

Some accounts may have been sourced and built by a particular seller. Let’s assume that an account represents $1m in revenue. However, as the years have progressed, it should now be $10m in revenue, and this account owner is not suited to grow it. Redistributing the account away from the person who sourced and managed it for years is not a decision to be made lightly. While it’s understandable why accounts are sometimes led by people not up to the task, it doesn’t make it a good business practice. Leaders must have the courage to make the change if it’s best for the business.

Structure is one of the eight components of the Sales Performance WheelSM. When we analyze sales structures, we tend to study the following four components:

  1. Sales Force Structure

    Leaders must decide how they will structure their sales force to capture maximum revenue and margin. Direct sales force? Channels? Inside/outside sales hybrid? Something else?

    They also need to design the roles, including defining what sellers are supposed to produce in each role.

    It’s also critical to think about sales force structure in light of the rest of the organization. How will they partner with marketing?

  2. Sales Compensation

    This is a topic near and dear to everyone’s heart. Leaders love to jump to sales compensation to fix their problems. While it’s certainly a factor in sales force effectiveness, it’s just one. Still, compensation has a major effect on who you can hire, who stays, what sellers do (and don’t do) on the job, their levels of motivation, and more.

  3. Territory Design

    The idea for most sales organizations is to capture all available profitable revenue from the market. The challenge is few sales organizations have the footprint to cover all available buyers. Leaders must apportion territories to help sellers find and win as much profitable business as possible.

    It’s not as simple as assigning geographies, however. When it comes to territory design, leaders must consider industry, expertise areas, approach to strategic accounts, competition, and more.

  4. Territory, Account, and Lead Assignment

    The charge here is simply this: getting the right people assigned to the right territories, accounts, and leads, who can deliver the most value and have the greatest success. This one might seem simple, but it’s one of the greatest challenges sales leaders face.

When your sales organization structure is poor, it’s difficult to attract and keep the right people, and you leave significant revenue-growth opportunity in the market untapped. If you’re looking to improve sales performance, it’s wise to consider if your sales organization structure is up to par.

Last Updated September 28, 2023

Topics: Sales Management