Strategic Territory Alignment Of Sales
Strategic Territory Alignment Of Sales : The alignment of sales territories is ultimately a matter of people. The necessary calculations can be made by any computer, but ultimately, what you have to deal with is the resistance to change of the people who make up the network.
Poor performance of the sales force is often attributed to deficiencies in the capabilities of each of the salespeople. However, on many of these occasions, rather than looking at the capabilities and motivation of people, we must look at the structure of sales territories.
A bad design of the territories can be caused by the opposite problem. Sometimes we overestimate the capabilities of salespeople who are simply lucky enough to be working in high-potential territories.
On the other hand, a poor design of sales territories also directly affects the levels of service provided to customers.
The process that allows us to redesign sales territories is called territory alignment.
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What Is Territory Alignment?
The sales force has a limited capacity and the clients need a certain coverage on their needs of visits and orders. Assigning the coverage of these customer needs to each of the members of the sales force is what we call sales territory design.
- Changes in the size of the sales force due to restructuring.
- Signals issued by clients.
- Messages from the sales force itself.
- Changes in the structure of demand and demographic changes.
- Launch of new products.
However, the alignment of the territories is not exempt from difficulties. There are a whole series of forces that act against it and should not be underestimated.
These are the main forces to fight against when introducing changes in sales territories.
1. The redesign of territories directly affects people’s lives.
The change of territories may require the movement of people and their families to different cities. Even if this is not necessary, each affected salesperson will have to visit new customers whom he does not know and with whom he must develop new relationships. Often, territory movements are also associated with changes in reporting lines and changes in direct superiors. All these sources of discomfort and even stress mean that the redesign and alignment of the territories are perceived as threatening to the members of the network.
2. Territory redesign temporarily disrupts customer relationships.
In many markets, sellers need to develop a deep relationship with customers in order to get a healthy dose of relevant information. Territory changes decisively affect the flow of these relationships and must be carried out by anticipating a smooth change process before the territory change is complete.
3. The incentive plan and variable remuneration discourage change.
Incentive plans introduce behaviors in the sales force that are not completely aligned with the company’s interests. For example, compensation plans based on sales volume lead to a desire for more customers than salespeople can best serve. Growth-based plans make you want territories with a higher number of potential customers. The reality is that sellers with good territories never want to leave them and will always see any changes in light of possible deviations in their results. The greater the weight of the variable part in the remuneration of salespeople, the greater the brakes there will be in the process of realigning territories. Therefore, it is advisable to review the compensation plan together with the territory redesign plan.
4. The data required for redesign always appears to be greater than the data actually available.
Realigning the territories of a sales force often requires some tough decisions. These decisions are made with greater confidence when there is data to support them. However, when faced with difficult decisions, data needs always exceed availability. The lack of confidence in the customer database, in the updating of routes and sales reports or estimates of potential customers, are some of the arguments used to delay decisions or processes necessary to redesign territories.
Some Recommendations To Face The Process
1. Focus on territory, not people.
Territories are built to serve customers. Alignment processes are designed to improve sales potential, not to satisfy salespeople. It is not convenient to design the territories according to the specific skills of specific people. Imagine that these people can leave the company at any time.
When making decisions in a territory, it is necessary to ask the following questions:
- Is this decision the best regardless of who is the current seller in the area?
- Is this the best decision considering customers?
2. A balanced workload helps to maximize the correct coverage of clients.
Customers in each territory will receive balanced service if different vendors have a similar workload. However, if the size of the sales force is not adequate, customers may be visited with excessive or insufficient frequency beyond the fact that all are equally affected by this circumstance.
3. Incentives must be designed for work and personal performance, not that of the territory
On many occasions, mediocre salespeople receive awards that they do not deserve simply because they have had to work in a large territory. These inequalities are a cause of demotivation in the network. Having balanced territories helps introduce balance in rewards and incentives.
4. Avoid the trap of overvaluing local expertise
The process of realigning the territories should start with a global analysis, followed by a series of guidelines that can be later adjusted by sellers and supervisors.
Doing it the other way around means that the decisions that most affect performance are made without taking into account a global perspective and only taking into account the local interests of each territory.
5. Prepare a transition schedule
Transition programs are designed to minimize the break or temporary interruption of profitable customer relationships. Given that the redesign of territories is usually associated with a considerable load of discomfort and uncertainty, it seems appropriate to prepare the transition with time and attention to detail.
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