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April 4, 2017

How to Maximize Your Sales Team's Efficiency With Territory Management

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Willie Sutton, a famous bank robber, is best known for his response to a reporter who once asked him, “Mr. Sutton, why do you rob banks?” Willie’s response? “Because that’s where the money is.”

While I don’t propose that salespeople model their lives after Sutton’s, there was a simple brilliance to his strategy. Sutton knew where the money was, and that’s where he focused his professional efforts.

Salespeople, on the other hand, often waste their time calling on prospects and customers who offer a low return on their investment. They call on the most logistically convenient prospects, the prospects they’re most comfortable engaging in conversation, or the ones they’ve known the longest or the best. There’s a long list of ways salespeople misallocate their time.

That’s why helping your sellers prioritize their effort is such an important (and under practiced) part of sales management. In this area, you don’t need to spend a single dollar on additional sales training or enablement. Your salespeople could sell substantially more by just knocking on better doors.

Sales Territory Management

In our book "Cracking the Sales Management Code," we label this activity of prioritizing seller effort as territory management. Territory management is a powerful sales process, because it is focuses on improving sales force efficiency (versus effectiveness).

To make salespeople more effective, you must invest in sales training, reinforcement, and other long-term strategies.

To make salespeople more efficient, you simply need to help them make the best use of their time. You could have a more productive sales team tomorrow if you could ensure they were targeting their most valuable prospects.

The process of territory management is a straight-forward series of tasks that provides clear guidance to the sales force.

Step 1: Segment and Prioritize Your Customers

Not all prospects and customers are created equal.

Whether they generate more profits for your company or they are otherwise strategically important, some are “A” customers that you must have. Some are “B” customers that you really want. And some are “C” customers that are nice to have.

To efficiently deploy your sales force against them, segment your customers into prioritized buckets.

Step 2: Determine How Much Attention Each Segments Receives

Once you’ve prioritized your customers, assess what type of attention each group warrants and in what measure. For instance, you may determine that your “A” customers merit weekly face-to-face meetings with your outside sales reps, while your “C” customers should each receive a monthly phone call from your inside reps.

Perhaps your VP of Sales should visit the As each quarter, while your Cs only communicate with your front-line salespeople. This is the core of territory planning -- designing appropriate “call patterns” across your target customer segments.

Step 3: Balance Your Sales Territories

If it’s been a while since you went through this exercise, your territories are likely out of balance.

Some sellers will have too many customers, and some will have too few. You’ll need to reassign customers or re-draw territories to ensure there is sufficient sales capacity to accomplish your goals. For that matter, you might have too many salespeople, or too few. You might need to shift people’s roles or otherwise massage your org chart. Do whatever it takes to align your sales force with your desired customer segments.

Step 4: Execute

Finally, you need to communicate the new customer assignments to your team and enable them to execute their territory plans. Let me go ahead and inform you that this is where you will fail if you do not put mechanisms in place to track your sales call activity. Unless you can measure the implementation of all your planning, you will fall victim to the whims of your salespeople. Tag your customers with segment designations in your CRM tool and then log your sales calls for each.

Step 5: Measure and Iterate

The goal here is obvious: Make sure your salespeople address their best prospects first, their second-best prospects second, and their third-best prospects third. Prioritize, prioritize, and then prioritize again. Then execute, execute, and execute again.

The same principles apply whether your sellers are consultative, transactional, or both and whether your customers are large, small, or in between. Whatever selling resources you have and whatever prospects you want to target, the goal is to mix and match them until you’ve allocated your resources as efficiently as possible.

Imagine for a moment Willie Sutton is your head of sales. Would he approve of the way your sales force is allocating their time? When they wake up each day, are they frequenting major banks or the neighborhood lemonade stands? Are they returning from each day’s labor with bags full of cash or fists full of pennies? Are they spending their time on the right activities? Do they know with confidence where the money is?

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Topics: Sales Management

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