Sales Territories

A protégé called and asked for my ideas on organizing sales territories.
It was a false alarm as her bosses already had a plan, and it was a lot
worse than their previous setup.

Traditionally, we divide sales territories by lines of business,
geography, or method of presentation (size of customer). All three
methods are creating increasing liabilities in an internet connected
world with public reputations.

Segregating lines of business – Every company I know is trying to reload
their customers to purchase a broader range of their offerings.
Upselling and cross-selling are usually less expensive than creating new
accounts, and a broader reliance on our products creates a more stable
customer.

Geography – Numbers runners have their own city blocks for weekly
collections. That started before 1900. Concern about the cost of long
distance calls and travel for multimillion dollar sales are antiquated.
Today, I have customers on three continents and have had a succession of
national territories. Remember that story of the prospect going to
someone else because they didn’t like the rep?

Method of presentation – Let’s figure out the presentation that creates
the most highest margin accounts and integrate that presentation to
every channel we can. Then cannibalize it every quarter.

Key Accounts – Every time I have seen one sales representative
responsible for a customer, the customer is well served when the rep is
flourishing, poorly served when the rep declines. Getting key account
responsibility usually marks the beginning of decline. We band together
in organizations to provide better service. Why do we keep that
advantage from our customers? Top competitors won’t.

The truth is, setting sales territories is an attempt to control the
sales force and the customers. It is not an optimal use of time for
management. I had one manager take away several million dollars in
completed sales saying he was “load balancing the team.” Many of those
sales were subsequently repudiated.

Setting customer responsibilities should be done by the same people
responsible for purchasing from your organization – the customers.

We can’t have faceless reps any more. Each rep needs to develop a public
competency that will appeal to their customers and attract prospects.
That starts with knowing everyone who buys in your accounts and making
it easy for your existing accounts and future accounts to find you. That
might include social media, but it starts with basic sales shoe leather
tradecraft. Doc Searls, who started “Markets are conversations,”
a decade ago, has a brilliant post today that reputations
are not brands.

The purpose of arranging sales responsibilities is to maximize sales and
margins. That means delivering the best experience to customers and
prospects. When it is done right, it is blatantly obvious to everyone
who cares.

Can I get an Amen?