Sales Leaders spend significant resources to increase sales force productivity via performance management, training programs, and sales compensation plan changes, but often invest too little in sales territory design and optimization. Sales organizations that thoughtfully design and optimize sales territories can realize 10%-20% increases in sales productivity.
Effective territory design includes a number of key elements:
Territory design and optimization should be an annual process. If territories are not adjusted periodically, sales organizations can encounter situations where growth is constrained in up to 20%-30% of territories. This phenomenon results from the fact that sellers in large territories have to spend too much time maintaining the business that is already built. To compound the issue, sellers in larger territories are usually the best sellers.
To free the best sellers from maintenance selling, sales leaders should holistically evaluate territories and shift workload from high workload to low workload territories. This will ensure all territories have an opportunity to grow.
As with all organizational change, territory changes can create confusion for customers. Following a proven change management process and implementing an effective communication and transition strategy will allow customers to understand the rationale and also embrace the changes. Balanced territories usually translate to better service from sales representatives, and therefore, happier customers. By providing better service, a sales organization can expect to increase business with current customers and more easily win new customers.
Sales leaders across all industries can’t afford to overlook the potential of territory design and optimization – the gateway to increased sales productivity.
Contact one of our Sizing and Territory Design leaders today.