Welcome to The Pipeline.

Shrink Your Way To Success19

They say you can’t shrink your way to success, but perhaps there are situations in sales where you can.  By shrinking your territories, strategically where it make sense.  A common concern I hear from sales leaders across all verticals is that they don’t feel that reps are fully covering their territories.  This concern applies to coverage for existing accounts, or harvesting the new business opportunities.   Without going too deep this happens because they create territories based on zip codes or borders of provinces or states, rather than the makeup of the territory, the realities of what can be properly covered by any given rep.   It is true that the economy has had a real impact on leaders ability to properly respond, but there is still room for data driven creative approaches.

But instead many, not all, do different things, shifting lower revenue accounts to an inside team, which works until the inside team has too much volume and all one has done is shift the glut from one team to the other, without an improvement in coverage or revenue.

One approach that intrepid leaders can look to is too shrink the size of territories, based on a number of factors driven by deal size, length of cycle, nature of the offering (new or mature), is the focus margin or market share, is there opportunity for organic growth, or strictly competitive account growth, and others.

By systematically reducing the size of the territory, along with adjustments based on the elements above, you can actually create focus and coverage, and as a result greater revenues, by continuing to
logically shrink territories.  If you focus is new accounts, the shrinking territory will create a focus on accounts that would be over looked in the perceived plenty in larger territories, take away the clutter and the opportunities become more clear.  If you are about covering and growing existing accounts, then again, concentrated territories make for concentrated effort, and better results.

Two caveats, an obvious one is that at one point you will have to add headcount to service new territories.  This however is easier to do when you have data to support both the reshaping of territories and the opportunities created.  This will not always be easy, and will require some concessions, but over the long run, better than inefficient territories, over looked opportunities, and the stress of losing business.

The other is to ensure you have the right people in the right territories.  Not all sales people have the same skills.  Some hunt better, while others are much better at fostering relationships and growing existing accounts.  As you shrink territories you need to move your assets around.  But if you do it right, and in concert with the sales teams, you’ll find that the assets want to move to territories that play to their strength.  This produces another up side, the reps tend to do better in their element, which just accelerates the results.

So go ahead shrink it.

Next Step

  • Analyse and segment targets, then overlay them on a map to see where the opportunities are, not state lines
  • Decide what kind of assets make sense for the territories based on you analysis above
  • Share your plan with the reps, sales people are hoarders by nature, they will fear the shrink, but will welcome the upside if you present it.

What’s in Your Pipeline?
Tibor Shanto

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