Remember back when you were 5 or 6 years old and you and a sibling or next-door neighbor would be fighting over the newest toy… “It’s mine!” “No, it’s mine!” No, it’s mine… gimme!” And back and forth it went… until your mother stepped in to mediate the dispute.
Well, if you work for a firm with more than one person responsible for sales – especially if they are compensated for new business growth – then unless you’ve got a very structured and manageable way to keep leads and clients separate for each rep, you’re going to end up with that same 5-year-old tug-of-war in your office. And it ain’t pretty! But there’s a fairly easy way to fix it…
What we’re talking about here is having clearly defined sales territories – that is, clearly established ways to categorize clients and potential clients so that there is never (or at least rarely!) any squabble over who “owns” a particular client.
Here are some options to consider when creating territories for your firm:
- By Size: Have very clear guidelines about creating territories based on the number of employees a firm has – pretty clear, but it requires a little data-gathering on the front end. One small warning – put a rule in place if the firm changes size.
- By Geography: The old standby… and generally pretty clear. One warning – make sure you have a rule in place on how to handle clients with multiple locations… that is, offices in more than one of your defined territories.
- By Vertical served: E.g. one rep gets ‘CPG’ and ‘healthcare,’ the other gets ‘technology’ and ‘automotive’ – you get the picture. One of the nice things about this structure is that it allows your reps to develop a certain level of expertise in their respective verticals.
- By Client type: A little different than verticals (above); for example, this structure might work for a focus group facility that caters to several different types of clients – end users, full-service research firms, ad agencies, law firms and independent moderators.
A few other thoughts on territories…
- Consider a territory called ‘house accounts.’ This is for those clients who will not be assigned to anyone because they fall outside of any defined guidelines. This is also where some clients will be put who don’t need to be called on for one reason or another (e.g. it’s the owner’s cousin).
- Try to make it as fair as possible to the current (and future) reps. For example… you split your two reps by geography – east and west of the Mississippi River. That means that your East Rep gets New York and Chicago… which might be unfair in terms of total sales opportunity.
- Finally, success with creating territories is all about communication. The clearer the territory delineation, the less arguments you’ll have. Make sure you communicate the territories definitions clearly when they are established. Be very clear with any new hires. And if you decide to change them… communicate clearly then, too. Finally, make sure everyone in your firm knows the territories, as well – that way, when a call comes in to them from a prospective client, your employees know who to send it to for follow-up.
Properly created, monitored and communicated, sales territories provide an effective way to manage sales reps, reward sales reps and set expectations for them as they go about their jobs. Do it right and you create a competitive sales advantage over those firms that still squabble in the sandbox.