Companies need to design territories for peak productivity and to effectively manage the cost of sales. Poorly designed territories limit revenue generation and increase cost of sales–at the same time.
Sales assignments typically come in two forms: named accounts or geographic territories. The approach to analyzing and designing the best territories should consider several important factors:
- Sales strategy: Is the goal to increase share among existing customers, acquire new customers, or both?
- Support roles: Gone are the days of the lone wolf field sales person. Today’s engagement models usually involve lead generation and qualifying resources, field and inside sales pairing, product and technical overlay specialists, and customer success and renewal roles. The makeup of the “team” has direct influence on the territory design.
- Workload: Too often, companies burden sales people with too much territory to cover. This often results in drive-by selling–unfocused, reactive effort. Instead, sales leaders should base territories and account loads on salesperson workload estimates which account for the design of the sales team.
Using analytics and benchmarking, sales leaders must regularly evaluate deployment decisions to drive results:
- Well-balanced territories that yield greater productivity and cost savings
- Workloads that balance hunting vs. prospecting
- Accurate investments in both new and established markets
Optimally sized sales organizations and well-balanced territories can yield 10-20 percent increases in sales productivity and may even generate cost savings.
For sales leaders, territory design is a critical discipline to unlock productivity and keep sales costs in line. Interested in learning more about the Alexander Group’s Sales Territory practice?
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