Optimize Your Sales Force Design
For years we have advised clients across B2B industries on how to develop growth strategies and accompanying implementation plans. We have discovered that underperforming sales organizations can be the reason go-to-market plans fail. Even plans with well-crafted value propositions and marketing support will fall short if the sales organization cannot deliver results. While there are many reasons sales organization struggle – having the wrong strategy, processes, or talent – poor sales force design is a common and correctable problem.
Sales force design concerns the number, type, and structure of sales resources, and how they are deployed to cover a geography. With an optimized design, the maximum opportunity for geography can be captured with the most cost-effective sales force. Getting the greatest marginal benefit from your design is complex calculus, especially for sales forces that are large, wide-ranging, and multi-layered. We recommend starting at the micro level – sales territories covered by individuals or small teams of sales representatives – to evaluate sales force design. In our work, we have found that answering these four simple questions can provide an initial assessment of your organization’s sales force design. The assessment, if completed thoroughly and honestly, provides clear direction around the actions needed to optimize your sales force design.
1. Are your sales territories defined correctly?
All sales territories should be established in areas or geographies with high sales potential. A territory’s sales potential is comprised of both (I) sales to existing accounts and (II) market development opportunity (i.e., acquiring new customers). Oftentimes organizations fail to consider the latter when determining territories. One of our clients traditionally determined sales territories based solely on their current sales. With this design, geographies with existing customers were well-serviced, while high sales potential geographies with only a few accounts were not adequately covered. This limited the organization’s ability to grow through developing new business. After helping our clients understand where the undeveloped opportunity was, we redrew their territory maps to ensure better coverage.
2. Are your sales territories balanced?
In addition to having high potential, all sales territories should be balanced. This means territories should have sales potentials and associated workloads that don’t vary widely between one another. With balanced territories, salespeople have more equitable opportunity to be successful and consequently rewarded. An important part of balancing territories is incentivizing market development, given that acquiring new customers generally involves more time and is more difficult than selling to existing customers.
Related Reading: Is Your Sales Organization Equipped to Deliver Your Strategy?
3. Is your sales force the right size?
As you redraw and balance sales territories, keep in mind the size of your current sales force may not match your needs. After reevaluating the potential of a territory, if you find it has significantly more growth opportunity than once thought, it might be worth dividing that territory and adding headcount with new hires or by reallocating talent. Alternatively, you may consider reassigning talent elsewhere if you have an overabundance of highly experienced salespeople covering the same territory.
4. Does your sales force structure contain the right roles?
Oftentimes territories differ in terms of the customers’ demographics, needs, and market maturity. These differences can necessitate having multiple sales roles with different skill sets. Having a “one size fits all” sales role deployed across all territories may not be the best way to maximize growth. For example, the market for our client’s product was much more mature and accepted in one region compared to another. In the mature region, our client’s sales generalists were successful at selling to customers familiar with the product. However, these generalists struggled to cultivate new business in the immature region, which required a consultative value-based selling approach. We advised our client to create a business development specialist role to hunt for opportunities and educate potential customers on the product’s benefits. Other types of roles can be defined depending on what sales approach works for each territory (e.g., technical sales, consultative sales, solutions sales).
If you find the answers to these questions don’t reflect positively on your organization, it may be time to rethink your sales force design. In our experience, utilizing a quantitative and qualitative research approach is necessary to successfully determine sales resources and map out balanced territories.
When optimizing your sales force design appears to be too difficult or unnecessary, taking steps to optimize your channel represents another path to profitable growth. Restructuring your channel and choosing the right partners could be a more impactful, cost-effective solution than a sales force redesign.
Related Reading: The Imperative for Active Channel Management