5 Reasons You Need to Redesign Your Sales Territories

March 13, 2012 at 7:01 AM

 

When you originally designed your sales territories, you are attempting to do 3 things:

  1. Organize the workload across territories in order to allow for equal coverage and representation of existing customers and prospects
  2. Balance Territory revenue potential across territories to allow for even rewards and incentives to all sales reps
  3. Economize and Increase Efficiency of your sales force overall, whether by reducing travel time or increasing vertical industry expertise

When you initially designed these sales territories, everything is (or at least should be) golden. Sales reps are happy, VP of Sales is satisfied, and the organization as a whole is content as revenue numbers grow.

However, over time the structure and balance of your sales territories naturally decays. Growth slows, sales reps become restless, and the VP of Sales breathes down everyone’s neck to boost the numbers before he gets replaced. There are a few main reasons why you may need to redesign your sales territories.

sales territory redesign

Do I Need to Redesign My Sales Territories?

Consult our list to determine if you need to make some changes to your sales territories:

  1. Change in the Size of the Sales Force (expansion or contraction) – A sales force of 8 sales reps will undoubtedly split up a territory differently than a sales force of 18. As your organization’s staff size changes, you must take into account the effect it has on your sales territories. After you implement a couple short-term fixes to accommodate for fluctuations in your sales force, territories can easily get out of alignment. Don’t put off a full redesign for too long if you’ve been doing some hiring or firing.
  2. Change in the Products or Services Offered – If your organization launches a new product or service, this can have huge effects on the alignment and balance of your sales territories. What happens if one territory has a greater demand for this new product? All of a sudden that territory needs more representation from your sales force. You also may need to shuffle your sales reps around depending on product expertise. As we’ve discussed before, it’s crucial that clients view your sales reps as the experts  Don’t let new products or services be launched without first closely analyzing your sales territories.
  3. Changes to Client Classification – You don’t only have to make sales territory alterations to accommodate your own organization. You may have to perform a redesign to account for client changes as well. In the present-day business world, organizations are always shifting. Over time, your clients will either grow or shrink – it’s inevitable. That VCR manufacturer account you landed isn’t going to be what it was in 90s. I suggest you adjust your territory design accordingly.
  4. Supporting Sales Rep Career Progression – As sales reps grow in their respective careers, and advance through your organization, they will naturally shift into different positions. The original reason that you designed a sales territory around a strong regional rep in a major metro area is bound to change when he/she becomes a national rep.
  5. Making Accommodations for Sales Rep Requests – Sales reps will often make specific requests concerning their sales territories. Examples may be along the lines of, “I live closer to this territory,” or “I drive through this territory every day,” or “I have stronger connections in this territory.” Either way, it can alter your sales territory design. However, once that rep moves on, these accommodations no longer make sense. Your territories are now in need of redesign.

Call to Action: If you want to learn more about best practices when redesigning your sales territories, view the recorded webinar I hosted last December called "Instant Improvements for Segmenting Your Accounts - How to Determine the Real Potential of Your Territory".

Also, sign up for our next webinar: Each month a sales consultant from our firm presents a best practice taken from one of our clients.  You can sign up for the next one here:

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Topics: Sales Analysis, Territory Design

Posted by Bryce Record

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