As the COVID impact increases remote working, virtual conference calls, and online purchasing, sales leaders need to be asking a simple question:
Should we actually eliminate geographic territories?
The simple answer is “No, but…..”. We all must recognise that for >100 years the entire DNA of the sales profession has been based on geography. Whether business-to-business selling, wholesale distribution, or retail outlets, being “close to your customers” meant building 1:1 relationships, solving customer problems locally, physically delivering products, and providing training and support services. No matter how “virtual” buyers become, shredding an entire sales infrastructure is both difficult and a threat to retaining revenue streams.
But the painful fact is that many customers are bypassing local sales channels in favour of online and virtual channels. Progressive sales leaders recognise a few inevitable trends:
Face-to-face meetings are harder to schedule
Customers are self-educating online without local sales support
Customers expect greater sales expertise and experience in their specific industry or profession; reps can’t be experts in every industry
Local sales reps also can’t keep up with the product knowledge depth needed to support broad, complex product lines
Many sales leaders argue – rightly – that these issues can be overcome and managed by what the profession calls “overlay” sales teams – subject matter experts (SMEs) for specific industries and products. These SMEs are typically remote, tele-based resources that customers and local sales resources can access for specific issues. Every company now has teams of “industry specialists” and “product specialists.” If these resources are not available or too expensive, the preferred alternative is large libraries of digital content with industry case studies and product specs that buyers can access. All good, right?
Not so fast. Many innovative sales leaders – typically from start-ups or companies that have gone through major restructuring – are asking a different question:
Why assign leads by a customer’s zip code when they could be routed to the “best available sales resource”?
Traditional sales teams place the “local rep” as the hub and coordinator of all sales opportunities and therefore planning. This can work well in many cases. But increasingly innovative sales leaders are “routing leads” and “account management” directly to sales resources (whether virual, tele or field) with deep expertise in either a prospect’s industry and/or product need.
At WBA, we call this “dynamic lead routing” or just “dynamic territories.” Most companies are already using some sort of prospect segmentation or even predictive analytics to target, prioritise, and route leads. In almost every case, lead response times, conversion rates, and win rates increase when industry and/or product experts are involved earlier in the sales process.
But too often, geographic centric sales models struggle with “dynamic routing” because it can create channel conflict (who owns the account, who gets credit, how does compensation work, etc.). Furthermore, truly dynamic territories often remove the concept of individual rep quota and territory distributions, which is hard for sales management to get over, given existing processes have been embedded over decades. Sales reps fear losing control of their local franchise to “virtual” sales channels – and customers get turned off by the channel conflict.
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