Geographical territories have been the fundamental building blocks of sales organizations for as long as national sales teams have existed. However the time has come to change that paradigm. Buyers' and sellers' geographical locations have become almost entirely irrelevant for many sales organizations. And there are far better criteria than geographic boundaries to organize a sales team's efforts.
We are in the midst of a sales revolution. More and more selling is happening remotely. Inside sales teams are where smart companies are growing their sales organizations, while field sales teams continue to narrow their focus.
The typical buyer doesn't want you to turn up in their conference room or on their doorstep to educate them. They already know about your solution because they've done their research and learned on their social networks and the Internet. They have identified questions for your sales team, and they want answers quickly. They want to speak to you by phone, email, text or tweet, but probably not face-to-face. Even if you still have a field sales team, look at what that team is doing now. They probably take phone calls four to five times more often and spend much less time in meetings than even five years ago.
Despite this logical line of thinking, geographic territories remain the dominant approach. In fact, 30 percent of sales teams assign territories by geography, according to a recent Bridge Group survey. The same study also found this lead is eroding.
I really have to challenge this thinking. If your team is conducting sales from inside company offices, why are they organized into geographical territories across the country or the globe? How important is local knowledge in a sale? For most companies, the answer is "not very important." There are so many effective new ways to organize a sales team's activity, and at most, geography should be just one of the many factors that determine how leads are distributed.
The Rise of Affinity-Based Sales Organizations
Distribute your leads based on affinity not geography. How do you judge affinity? There are many different ways to assign accounts and opportunities based on affinity, but my favorite methods are "sales performance" and "social proximity." I have seen these two methods alone lead to some of the most ground-breaking results.
For example, we use sales performance to distribute leads at my organization by running an algorithm to see, based on the variables we currently know about the opportunity, who has the best sales performance on that type of account. We use Velocify's software to do this instantly, every time an inbound lead gets logged into Salesforce, but I have seen companies do this with named accounts using a spreadsheet too.
The secret to a successful performance-based distribution program is to remain flexible as you implement it. This means that just because I have the best sales record with pharmaceutical companies in the Mid-West, does not mean I should be sent every opportunity that meets these criteria. Just send me more of those than someone who has a worse sales record with that type of opportunity. The reason for this is the system needs to learn. If all my best leads go to my best reps for instance, lower-performing reps will never get the chance to prove their ability to convert good leads. It's all about ratios. Our experience with implementing performance-based programs at a number of organizations is that a typical rep can more than double their lead conversion by receiving more leads similar to those that they have been found to be "skilled" at converting. For any sales leader, that isn't just a compelling reason to rethink geographic territories, it should be a burning call to action to make the switch today.
Recently, I was lucky enough to talk with one of the world's foremost authorities on social selling, Jill Rowley, about how to use social proximity to distribute leads. In an upcoming column, I'll share our discussion about social proximity and offer more innovative ways to update the way your sales team handles new leads.