Market Share: Establishing a Sales Territory

August 31st, 2009 by

By Pat Hinds

I am currently working on a contract with a small company that has recently hired a new sales person. The owner of the company is an entrepreneur and like most successful entrepreneurs is very good at sales. The challenge for the entrepreneur is not sales skills, but the lack of experience in managing new sales people. One mistake I see small companies make (including my client) is they do not establish a sales territory for their staff.

Most companies have products that address a wide array of customers (or so they think); as a result of having such a large target market they do not establish sales territories. The small companies only set a sales target for the sales rep and they make the assumption that the sales person will figure out what customers to target. Most founders of companies have a vision of what is required to make the company a success; consequently, they know their target market and will make as many calls as required to be successful. The entrepreneur makes the mistake of assuming the sales person they have hired has a similar understanding of which prospects they need to call; and how many calls are required to meet the sales expectations.

Companies can address the gap between the entrepreneur’s expectations and the sales person execution by establishing sales territories that are aligned with their sales expectations. The sales territory establishes a unit of sales measurement that will allow the sales mentor (the entrepreneur) to work with the sales rep to review activities.

The sales territory can be designed by geography, market segment, vertical or any combination of these variables. Once you have established the territory you need to provide the business intelligence so the rep can establish a target list of accounts that align with the new territory. The list needs to be compiled in a sale force automation technology to ensure that the sales person’s activity is tracked, and even more importantly, the feedback from sales prospects is captured providing an information loop that will help coach the sales rep.

Listed below is a quote on the value of a measurable goal:

“The more specific and measurable your goal, the more quickly you will be able to identify, locate, create, and implement the use of the necessary resources for its achievement. “
Charles J. Givens

Topics: Business Intelligence