How does DHL, the most international company in the world with 285,000 employees in 220 countries, design its sales territories? SBI spoke with Tim Robertson, the logistics industry leader’s U.S. vice president of sales and marketing, to find out.
The objective of territory design is simple. You want to put your best salespeople in the territories with the most potential. Robertson has laid out a six-step process used by DHL to allocate the right reps to the right territories.
The objective of territory design is simple. Put your best salesperson in the territories with the most potential.
The first step is baselining current performance on items such as revenue, product mix, customer and prospect count, and close rates. DHL completes this critical step by starting with sales strategy and market segmentation. Then, they take it down to a channel analysis, and finally to the individual sales rep.
The second piece of the puzzle is analyzing customer spend. For Robertson, the diamonds are in the details. DHL looks at not only the available customer spend but also tries to project the lifetime value of each customer.
Next, they determine the mark potential. In this case, you must take the output from step two down to the account level. The result is a stack ranking of accounts, top to bottom based on spend potential. “While this is a mission-critical step in territory design,” says Robertson, “I cannot overemphasize the role that the sales manager plays in weekly coaching sessions.” It is one thing to have all the data, but the sales manager must drive the actual activity.
The next step in territory design is producing initial territories. Greg Alexander, CEO of SBI, explains that there are three ways to do this: the customer-driven approach, the activity-driven approach, and the geographic approach. In the first method, a sales territory consists of a list of named accounts. The second involves a workload analysis. The third is based on geographic assignment; a rep sells to all customers in a given location.
The fifth step is all about rebalancing territory assignments. At this stage, focus should be placed on the number of customers, prospects, and market potential.
The final stage is creating territory plans, which also involves assigning goals for these territories. “This is an essential part of driving sales performance,” says Robertson. “We’re also continually making adjustments throughout the year. If we see a weakness, we make a quick adjustment.”
Use these six simple steps to properly design territories to make your number.
How it Feels to Make Your Number
It has never been more important for the product team, marketing department, and the sales organization to work together, but it’s easier said than done. Turn to page 46 to learn the prescription for developing your 2016 sales strategy, with critical inputs from product management and marketing.