by Tibor Shanto – firstname.lastname@example.org
Ever wonder why some companies can generate as much revenues with less sales people than others with more? I think it has to do with the hoarder mentality that permeates sales thinking. “The more territory, the more accounts I get, the better I will do”. Yet often the opposite is true, more often than not, less is more in sales accounts and territories.
I remember when I was given responsibility for a new region, eight sales people looking after 13 states. First thing I asked them to review the status of their top ten accounts, recent activity, and their specific plans for the next 12 months (pre CRM days). Each of the eight territories, had some 300 – 500 accounts; on average, the top ten accounted for 72% of revenues in the territories, ranging from a low of 64% to a high of 82%. Coincidentally, around the percentage mark of where they were to quota. Their coverage plan was routine rather than inspiring, and growth was going to be more from momentum and rhythm, rather than execution of a structured plan.
I then asked them when they last saw or spoke to account number 25, account number 51, and number 100. As you may expect, #25, sometime in the last six months, one remembered speaking to number 100 at Christmas, mostly because they called in to update their password, a call they transferred to their inside account support person.
When I asked them what can be done to hit their goals, all but one suggested that we add accounts to their territories that were homeless due to a recent departure. When I suggested that I was actually planning to go the other way, reduce the number of accounts down to about 50 per rep, the hording gene really kicked in. “That crazy Canadian, I always knew they were socialists, he is looking to nationalize my accounts, reduce my empire”.
Well I wasn’t going to nationalize, but give it to the support team, who were dealing with accounts number 50 and on as it was. This would make for less clutter for the territory reps, and provide the clarity they needed to work with their clients, prospect for new opportunities, and drive success. They thought I was nuts, when I suggested they can have as many accounts as they want to prospect and bring on, 20, 50, 100, whatever they liked. But with nearly 72% of their revenue coming from ten accounts, it would be easier to grow the ten, add a few juicy new accounts to make goal, rather than spending their time counting accounts from a distance.
The hoarding gene is strong in sales; after all, some of these reps become managers, then directors, and eventually VP’s. You can tell when you meet them, the solution to everything is adding more resources, more territory, more reps, more accounts; behind on the numbers, “give me another rep”. At the same time you meet others, who after analysing the data, look to optimize territories to maximize client experience and revenues, shrinking territories to create focus, rather than growing them and creating dilution.
One of the only good things to be said for the recession is it showed many organizations that they could in fact deliver more numbers with less headcount. Reducing creates focus which drives creativity, when you reduce, the competent reps step up and deliver, while others demonstrate why you may be better off with less. Sellers always tell you that in sales it is “quality over quantity”, why not apply that to territories and reps as well?
So to answer the question as to how many reps can dance on the head of a pin? A lot less than you think you need to have on that head.
What’s in Your Pipeline?