Is poor sales performance always down to the rep? Or could it be their territory?
Poor performers sometimes find their way into the sales force – despite best efforts in recruitment. Once identified, a common solution is to manage them out. But is this always the right plan? In our experience, poor territory design can sometimes inadvertently cause a good seller to look like a poor performer. Salespeople who struggle to reach targets are classified as poor performers, but in reality, a poor territory could be restricting their success. So how do bad territories occur, what are the consequences, and how can you deal with them?
How do bad sales territories occur?
The root cause is poor design and allocation. But the problem is frequently perpetuated because of a fear or disruption and favouritism. Top performers are assigned territories with the highest amount of opportunities; new people may get given territories with appreciably lower opportunity.
It’s not unusual for sales leaders to become overly attached to their high fliers. And that’s completely understandable – they help them achieve their targets and they’re usually very good socially, they become friends. It’s also quite hard to move away from viewing a rep as a top performer even if they have a bad year. There can be a tendency to rationalise poor results away, putting them down to causes beyond the rep’s control. This way of thinking leads to a fear of disruption and a culture that tolerates imbalances.
What are the consequences?
A major impact is a vastly reduced sales capacity. When the high performers are given the richest territories with an over-abundance of opportunities, they can’t cover them all effectively. On the other side of the fence, other sellers fail because they are allocated territories with insufficient opportunity.
Such a workload imbalance has another effect. Over time, salespeople who started out as hunters are transformed into farmers. They end up being so busy dealing with existing accounts, they have little time to close new sales. So the burden of growth is placed on the average and below average sellers. To make matters worse, ambitious sellers in the farming territories often leave because they are frustrated, they enjoy growing a business, not farming.
Unbalanced sales territories slow growth and increase sales costs. If they’re not dealt with effectively, it can result in high staff turnover which is always undesirable being very disruptive and expensive. Your sales team become demoralised and customers are often left confused and dissatisfied with your service; they defect to better organised competitors.
How can you deal with them?
A thorough review of your sales territories will show you the steps you can take to eradicate the negative features of unbalanced territories. Indeed, organisations with high performing sales teams undertake such a review on a regular basis, usually annually.
The review process will deliver the information you need about your reps, customers and prospects and their relationships to each other. It should include some key actions:
• Calculation of account, prospect and territory opportunity potential
• Development of a workload model
• Estimation of the optimum workload in each territory
• Development of a territory balance index score; at a minimum this must include workload and sales opportunity
• List of territories that are 20-30% above or below the average index score
• Where possible rebalance outlier territories keeping disruption to a minimum
Rebalancing territories provides all salespeople with equal opportunities for success and effectively increases selling capacity. Companies can measure performance and know that they have truly identified the high performers. It’s often quite an eye opener. When given the right ingredients for success, many of those low performers will shine. Conversely, many top performers who surpass others when they are in the highest opportunity territories may turn out to be not as good as thought.
Take the first step to improving your sales. Call us for an informal chat on 01733 890790 or go to our contact form
