Balancing Sales Territories

When you go through this potential-estimating exercise, you will almost certainly discover wide differences in total sales potential across territories. Some will have enormous potential while others will have surprisingly little.

Adding actual sales (annual) data for each of the territories is likely to produce an even more important message:

High sales potential does not lead to high actual sales in many cases.

You will probably see some of your best producers working territories with relatively low sales potential while some of the lower performers are working in high potential territories.

This sales performance vs. sales potential ranking offers two vital planning insights:

1.   Your best sales performers can be clearly identified by their sales-to-potential ratio.

2.   Your best opportunities for growth may lie in targeting under-producing but high-potential territories.

We will look at the first of these in the final page on best practices approaches.

Under-Producing High-Potential Territories

The first thing you need to know is why these territories may be under-producing. Are they assigned to a new or weaker sales rep? Are they simply too large to be worked effectively by a single rep? Are the high-potential accounts in the territory different in some significant way from the rest of the accounts?

Splitting up such territories may be a good first step since this can be done roughly by equalizing potential between the new territories. Drive-time issues must also be addressed in such redefinitions but this is pretty standard. The goal here should be to bring both of the newly split territories up to at least average sales performance.

You may also find in some cases that it is better to split an under-performing territory so that the new ones overlap geographically but separate accounts by specific needs, expertise or technology.

If you find that the high-potential accounts are different from the other accounts, then you may want to consider adding a sales specialist to support the current rep. The specialist might, for example, be recruited from the particular industry or technology that these "different" accounts require. Or, you could replace the rep with a specialist.

Finding that you have a new or weaker rep, you will probably consider actions such as teaming the new rep with an experienced producer or by replacing a weaker rep.

Best Practices Implications

Our final commentary looks at how a best practices approach might use the result of a sales territory potential analysis.  ...more...

 

Paydirt

Getting fast, substantial payback from your analytical work here is almost certain.

This approach identifies under-penetrated accounts and assesses rep performance. Both of these can typically be addressed effectively in the short-term.

In general, there are likely to be quite a large number of relatively minor actions that you can implement at low cost and quickly. Results from these actions should be apparent within a fairly short time frame.

Much of the power of this methodology lies in its ability to identify improvement targets and to track results of your improvement actions.

As noted in our best practices pages, a relatively small improvement in sales productivity can have a very large impact on overall profits.