When you think of your top rep across the company, do you have superman? Hopefully, but maybe it’s simply the territory. Get the territories right and you’ll increase the likelihood of making your number overall.
Today’s article is focused on Territory Alignment and determining the objective criteria to design the territories. I recently interviewed Jim Mears, the Senior Vice President for Motorola Solutions. He demonstrated how to balance customer requirements, company revenue expectations and sales rep workload to grow revenues. Jim and I followed the Territory Alignment phase on pages 299 – 303 of the PDF.
Jim is responsible for the go-to-market teams in the U.S. and Canada. Motorola Solutions provides mission-critical communication systems to public safety and commercial customers around the world. Jim is uniquely qualified to demonstrate how to balance customer requirements, company revenue expectations and sales rep workload to grow revenues. I wanted to share with the audience a valuable deep dive from my interview where Jim and I discussed Objective Criteria required for territory design.
When determining territories there needs to be objective criteria. It can’t be subjective. Too many times territories are adjusted based on gut feel or negotiations with an ‘A’ player you want to retain. Jim shares with us the objective criteria he used when redesigning his territories. For the full interview with Jim, click on the podcast.
In summary, Jim used the following objective criteria when creating a territory. Jim, who’s been doing this a long time was able to rattle off several things right away.
- Revenue in the territory
- Competition is in the territory
- Buying history of the territory
- Buyer behavior, what’s the service need post-buy and then this concept of the customer life cycle and understanding when a customer needs to engage with a salesperson and when maybe they don’t.
- Buying cycle which in Jim’s case, Motorola’s case, it’s a five to seven year cycle. In your case it might be five to seven months cycle.
Those are examples of objective criteria that you might use to design your territories. Are those the right ones for you? Maybe, maybe not. Maybe some of them are, maybe none of them are. The point here is you need to understand what matters for you and come up with your objective criteria when developing territories. Let’s go deeper now into Jim’s use case and example so you can think through it and apply the learning to your business.
To give you context, here is a quick overview of the Motorola Solutions go-to-market team. For a long period of time all of accounts were assigned to a direct rep and for the most part they were all serviced by direct reps. Jim’s team had years, if not decades of buying history and that history was used those to formulate the territories and where people were assigned.
Very quickly as the industry became more competitive it became evident that some of the areas probably didn’t justify any longer a pure direct rep. That’s when Jim started to create a combination between direct representation and what Jim refers to as manufacturer reps. These are partners out there that do a tremendous job also on the service side also became sales agents for the company.
Jim continued to take a look at the territory and the amount of revenue it brings. He decided to either divide and conquer in some cases, or consolidate depending on competition and buying history. It really continued to evolve as the territory and the customer’s buying habits changed. Motorola’s sales are typically long cycle, big ticket items. A small to midsize county that’s buying its next generation public network, when they buy it they still need to continue to be serviced and we want to be there in front of them every day, every week doing that.
In most cases the buying cycle may not really ramp up for another five to seven years, so it becomes a maintenance account more from the standpoint of servicing the account. A lot of times our partner can take that and we can shift the focus of a more expensive direct rep on that next big opportunity. Jim used heat maps inside the company that change depending on where the customer is in their buying cycle and what their next generation system looks like.
Taking action on the objective criteria was made possible with discipline of summarizing activities in the CRM. The daily and weekly coaching so far as the amount of things that are going into the pipeline, the velocity of the projects that are running through the pipeline, the types of conversations the sales team are having with their customers in trying to drive and create demand, drive and create opportunities to execute and close business.
The CRM data informs what has happened in accounts where nothing has been sold. In a mature customer for the next several years, the sales managers that work with the salespeople identify where those conversations are happening. They’re also able to say, “Hey, I think we may need to shift and realign the territory in the state of X based on the things that have happened over the last couple of years and the deals that we’ve been able to close.”
Jim talked about the activity of the salesperson, the call activity, the amount of pipeline that might be in a forecast. Territory alignment is about balancing customer requirements, so what are the customers requirements? Do they need to be called on everyday? Once a week? Once a month? Once a year? Face-to-face? Over the web? Over the phone? Via email? What are their requirements?
Then you consider company revenue expectations, so what do we need out of that territory? That’s largely based on what’s the spend potential and the propensity to buy in that given fiscal year. Then you’ve got sales rep workload which is what Jim was just talking about. If I’m a sales rep and I have 500 accounts, I’m not going to be able to touch them with much frequency.
Territory misalignment is a common cause of missed revenue targets. Crack the code to unleash the sales potential in your people. Download our 10th annual workbook, How to Make Your Number in 2017.
Would you like some help validating that you have your team aligned to work the right opportunities? Come visit me in Dallas Texas at The Studio. In advance of the meeting, my team can review your data to understand what the workload looks like at the sales rep level and how to match that up with the requirements of the territories themselves. If that’s an exercise that you think could help, consider coming down to The Studio and spending time with me. I will put a room full of experts in the room and we’ll dive into your data and you’ll leave with a plan to optimize territories.