Rethinking Sales Territories

Posted by Trish Bertuzzi on Thu, Jun 13, 2013

 

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I consider myself a fairly traditional Sales Manager – in that I generally don’t think “new” equates to “better.”

In terms of Sales Territories, I've always believed in the need for defined territories. My reasoning being that they create focus and accountability. (That and the fact that they're a hedge against most in-fighting between reps).

But the times they are a’ changing and so is my thinking.

Although I’ve been dubbed the “Godmother of the Outbound Mafia” (thanks to Craig Rosenberg for the title), I do recognize that the ripple effects from inbound marketing and social prospecting need to be addressed.

Equitable territories are as simple as Rubik's cube.

Territories can be carved up based on potential, but not on interest. Market dynamics don't respect the neat lines we’ve drawn on a map. Although Marketing would love to ensure even lead distribution - it just doesn’t happen.

Rather than building in complexity to compensate for unfairness, I'm seeing companies begin to move away from traditional (line in the sand) sales territories.

I want to share 3 examples of companies that have rethought conventional wisdom.

Silverpop: Function & Segment

Silverpop has done something really interesting with their Demand Generation team. First, they've segmented them into inbound and outbound. Inbound Reps receive leads round-robin. Second, outbound reps are aligned by market segment: enterprise, mid-market and smb.

Bruce Field, VP Sales & Demand Generation of Silverpop provides more detail:

Attempting to fairly assign targeted performance goals and distribute inbound lead volume to Demand Generation teams can be problematic. A reliance on strict geographic territories usually leads to some individuals receiving low volumes with an inability to achieve goals despite skill and effort while others may achieve their goals too easily.

Utilizing a round robin approach has allowed us to create a truly level playing field and provides greater visibility onto our star performers.

HootSuite: Named & Pool

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HootSuite has taken the no-geo territories philosophy all the way to their sales team. Inside Sales Reps are assigned 250 accounts across geographies. All other accounts are kept in a pool which can be prospected into by anyone. The ISRs can own a contact but not the account until an opportunity is created.

Darren Suomi, VP Sales of HootSuite provides more detail:

Geographical territories tend to be unfair in how they are cut up as they usually have a concentration of certain types of customers. (i.e. NY & CA typically do better for Technology and Media). Our strategy addresses that issue.

An added benefit is that if a rep has a particular expertise from past experience they have the freedom to explore it without having to be boxed in by a territory. We also believe that referrals are key to expanding business. If a rep gets a referral from a client they are free to run with it vs. having to pass it to another rep. There is sense that a rep needs to be on the ball and not miss out on an opportunity by ignoring non-named accounts. By knowing that other reps can go after accounts there is more urgency to get to them. 

Net/net: As a new industry, the market dictates a lot of where we go so we are trying to be fluid and have the ability to adapt quickly vs. being slow moving and boxed into a certain way of doing things.

ConnectAndSell: Pool [squared]

ConnectAndSell has taken a truly iconoclastic approach. First, they have no Lead Gen team front-ending the sales process. All leads go directly to Sales.

Second, there are no territories. From an inbound perspective the leads are queued in a lead pool that the reps can pull from to build call lists. From an outbound perspective, prospect accounts are pooled and reps can reach out to any subset in which they have interest.

To me, this approach reads, “You don’t own a patch or a bunch of accounts. You own a revenue quota – good selling!

Mark Godley, VP Market Development of ConnectAndSell provides more detail:

We were pretty nervous about throwing out conventional wisdom and designing an unorthodox market coverage strategy.

I’m happy to report that we now have an amazingly dynamic methodology in place that allows reps to pursue territory potential as they wish while also optimizing market coverage for our company. It has worked far beyond our expectations and bookings are up hugely as a result.

So there you have it.

For some time, I’ve been revisting the conventional thinking around territories.

Don’t get me wrong, no system is 100%. A critical success factor for each of these organizations is having a strong technology infrastructure to support, monitor and report on account ownership.

So maybe I'm no longer such a traditional Sales Manager. I’m attracted to the idea of thinking higher and bigger than the day-to-day. And where possible and necessary, coloring outside the lines.

So what do you think? I would love to hear from real practitioners about what you’re doing. If you run an inside sales team, how are you bending the old rules? Educate us. We are all part of the inside sales community!

PS – Many, many thanks to Bruce, Darren & Mark for sharing!
 

(Photo credit: Risk by Scott Hamlin) 

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Topics: inside sales strategy, target marketing, executive interview

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