Take your “Starter Territory” to the top of your company’s charts!
Everyone has a first day on the job. And every salesperson has a first territory. All is fine on day one as you settle into your new job, but soon after, you begin to get an uneasy feeling about your territory. Your customer list doesn’t seem to have a lot of “A” accounts. As a matter of fact, there are not many “B” accounts either. You’re beginning to wonder how this territory was formed and you’re beginning to understand why the previous salesperson may have failed. The customer list seems to be filled with split accounts, odd purchases, and fringe customers: not a lot of core customers in your new territory. You also might find that you have several high maintenance customers.
Before you feel like you are the only person this ever happened to, let’s go back and understand how your territory might have been formed.
From a previous territory: This is when there was a salesperson in that territory before and you replaced them. As a sales manager, when a salesperson leaves, a major concern is how will we take care of the customers in that territory, until a new salesperson is hired. The obvious choice is to take the customer list and divvy it up between neighboring territories. However, those neighboring salespeople are swamped. So, to make it easier, you only have them work with the top customers from the vacant territory. The rest are in limbo until a new salesperson is hired. They can be handled by the customer service team when ordering. So, the top customers from the vacant territory are now working with an experienced sales person, who is most likely happy to have some “A” customers added to their territory. Along comes you, the new salesperson. New to the company and new to sales. You can imagine the neighboring salesperson is not excited about giving up an “A” account, even if it wasn’t theirs, to begin with. Especially if the time between you and the old salesperson has been a long time (6-12 months). You can also imagine that a good customer is not excited about working with someone brand new. Negotiations go on between the neighboring salesperson and your sales manager, which leads to some of those “A” accounts permanently leaving your new territory. Right or wrong, it happens.
From a brand-new territory: This is when your sales manager carves out a brand-new territory between several other salespeople’s territories. Maybe there’s rapid expansion and the salespeople need more help in a particular geography. Remember that a top performing salesperson has prospected, signed and developed business with their customers for years at this point. The sales manager has to now approach this sales person with the idea of letting some of those accounts go to your new territory. While I realize customers truly belong to the company, a wise sales manager is going to have this discussion carefully. It takes a lot of trust and coaching to work through splitting an experienced and high performing salesperson’s territory. A good blog for another day, but today is all about you in your new territory form hell. Suffice it to say, there is a natural reluctance on the part of neighboring salespeople to just hand over all their best accounts. They have ownership in their results. Depending on how that conversation goes with their sales manager, your new territory might be full of “C” or even the dreaded “D” accounts. Have no fear, you can handle it. It’s a journey to the top and the steps below will steer you through it!
What to do:
- Take an inventory: Lay out your territory on whatever accounting system or Excel program you have. Sort by geography, units sold by customer (tons, pounds, bags, seed units), total dollars by customer, net profit by customer, top products by customer. Look for trends and determine the overall health of the territory. To do that, look at these results over a 30 -60-90-day period, and then year over year. Apply some seasonality common sense here if it’s a highly seasonal sale, like seed. The end result is to know where you currently make your money in this territory. As an added analysis, I always took my net sales and compared that to what I was costing the company (compensation + about 35% for benefits, expenses, etc.). It’s always good to see if you are paying your way and by how much.
- Take time to find your niche: Now get in your truck and go see your top 20%. That’s the top 20% by revenue. During this step, you are trying to figure out who these customers are, do you connect with them and are they the future of your territory. Just because the previous salesperson sold a customer doesn’t mean you will. Remember that people buy from people and more importantly, they buy from people they like. You’re on a mission to find out who you like and who likes you at this point.
- Segment: Now that you figured out who your crowd is or who you connect with, it’s time to segment that group or groups out and decide if it is a big enough segment to form an entire territory on. If it is, then move to step 4. If not, get back in your truck and go find your niche. FYI, here are a few niches that might be too small: fainting goats, homing pigeons, endangered cranes (after all, they are endangered so there’s not very many of them).
- Focus: You did the diligence of analyzing your territory, verified your niche, segmented that niche out and now you need to focus in on that market. It’s tempting at this point to run out and be everything to everyone in the market…. treat the little guy no different than the big guy…be different by spending time with everyone equally. While noble, it will both run you ragged and ensure your territory is at the bottom of the sales charts. Focus your time and effort on your niche and get good at that before branching everywhere else.
- Respect Time: The last aspect to understand is respecting time. Often, prospective feed dealers would go to an established feed dealer to get ideas. They would see all the customers standing in line and think how easy it is to have a feed store. Then they would open their store and have no line of customers. I’d have to remind them that the other store has been in business for 50 years. That line didn’t happen overnight. Same with your territory. Comparing your brand-new territory to your neighbor, who has been at it for 10 or 20 years is not apples to apples. Respect the amount of time and effort that salesperson put in to have a territory at the top of the sales charts.
Final thought: Someday in the near future after you have developed a perfect territory, weeded out the bad accounts and become comfortable, your sales manager is going to come to you and say, “So, we got this new person starting in sales. We think she would be a good fit in these three counties. You have a pretty large area and thought we could shift some of your customers to her. What do you think?” Hopefully, you will reflect back on your first day in sales and make good choices in how you respond. And if not, then send her this blog article. She’ll need it.
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