By Donncha Carroll, Tom Hill and Kevin Andres

Most sales leaders are all too familiar with the process of blowing up and reassembling territories every three or four years. The need for realignment is usually obvious but the process of change is disruptive to operations and the carefully developed relationships between sales professional and customer. Making large scale change can erode trust between customers and company but also with employees – there is a better way.

Changes in the Market

The market changes much more quickly today when compared to the past. Businesses start and fail at a rate never seen before. In fact recent data from the Bureau of Labor Statistics shows that approximately 65% of new businesses fail during the first 10 years. For the companies that survive this gauntlet, we note that their average age (based on the S&P 500) is under 20 years, down from 60 years in the 1950s.

This level of churn in customers creates a greater level of imbalance between territories sooner than they did in the past. So, the major redesign initiatives that are more typical of the past are effective, but only for a short time. Account number, size, importance and complexity are changing within and across territories more quickly and along with them resource requirements and the optimal service approach. One of our clients in the technology space reported that “in our mid-size customer segment, we have real difficulty managing subsidiary accounts that roll up to larger enterprise customers as we work to establish fair territories and rules of engagement between sales teams.”

Agile Sales Territory Design & Management Implications for Business

All of this can have serious implications for the sales team as these changes tend to impact both productivity and efficiency. As the market shifts, account priorities often stay unchanged with accounts that are growing in importance get less attention than they should, while accounts of diminishing importance receive too much investment. Many sales professionals tend to call on the accounts where they are welcome and have a good existing relationship vs. where opportunity exists to really grow the account. As a consequence of this increasing misalignment between needs and sales/service approach you might see:

    • Territories growing or declining at a high rate in either dollars or number of accounts = workload changing dramatically making some territories less serviceable than others.
    • Greater distribution of account size or potential within one or more territories = challenges in prioritizing smaller accounts that may be better served by inside selling resources.
    • Goals are increasingly difficult to set as territory fundamentals shift = “high performing” sales reps tend to turnover at a high rate.


Four Steps for Building an Agile Sales Territory Design Approach

      1. Starting with Principles: Applying a principle-based approach is key because establishing commonly held objectives provides the foundation for every decision related to territory design downstream. Principles of agile sales territory design might include things like:
        ▪   Design for the role not the person
        ▪   Goals move with the account
        ▪   Time spent on high value sales activities is maximized
        ▪   Territories can be served effectively by one person
        ▪   Design should balance opportunity across territories
      2. Engaging Resident Knowledge: Engaging front line and sales management in building the initial design will kickstart the change management process by ensuring the approach holds up under scrutiny from respected resources. Their involvement will ensure good capture and even better usage of on-the-ground intelligence to shape the first iteration of the change. Securing their involvement will also ensure their support for the actions that come later and all along the change journey. Perceptions that valued accounts will be unfairly reassigned or that changes in goals don’t accurately reflect changes in opportunity will be more quickly dispelled once the design team agrees on the methodology.
      3. Building the Team: It’s important to create a simple process and set of rules for account changes that can be easily understood and followed. The process is typically developed and run by Sales Operations. Although in the real world not every decision is cut and dry and so it’s a good practice to identify a moderator or small committee that can resolve issues that come up to ensure fast and efficient decision-making.
      4. Designing and executing the process: Now that the foundation is set, it’s time to get to work. Required activities include:
        ▪   Build a consistent measurement approach providing complete, accurate and trusted information
        ▪   Update assumptions continuously around account segment, size and service needs
        ▪   Develop guidelines that govern how and when accounts are identified and moved
        ▪   Design a methodology for recalculating and comparing workload between territories
        ▪   Provide some discretion latitude for leaders to make the right call when the rules don’t apply

Ready to discuss your agile sales territory design strategy? We’d love to hear from you.

Additional perspectives for sales leaders:

The Power of Sales Operations

Unlocking Future Growth Through Sales Channels

Navigating Troubled Sales Waters

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