18 June 2018

Sales territory sectorization: the impossible balance?

18 June 2018,
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Untapped markets, unsatisfied, unmotivated sales staff, loss of time and efficiency… the risks involved in poor sales sectorization are real. To help you avoid them, we have put together some advice from our experts and experts from our client Transgourmet.

“Sales sectorization still relies on empirical techniques that are a long way off proving their worth”, declares Sébastien Connesson, Managing Director of Galigeo. Based on criteria that are subjective and not very transparent, the distribution of sales territories can soon create real tension. “The challenge is to work out a really fair distribution of client portfolios and markets because it is our sellers’ sales figures, and therefore their bonuses, that are at stake. Poor distribution will therefore have significant human and financial consequences”, Sébastien Connesson warns.

In addition to the HR side of things, sales managers must ensure that no territories are untapped or, conversely, saturated by the sales force. And then, they have to factor in how close sales people are to their territory, the distance they have to travel every day to optimize their routes, and even the changes in the markets over the years. It’s a real headache!

The role of rationalizing commercial sectors

Teams at the food wholesaler Transgourmet faced this dilemma for years. “In the past, we divided our sales territories up by prioritizing other criteria over the geographical dimension; the size of client portfolios in terms of sales figures and maintaining existing customer relations were major considerations when it came to re-distributing sales territories. As a result, we were confronted with situations where several salespeople were working at the same time in the same towns”, recalls Sylvie Toche-Morel, Sales Force Support and Customer Knowledge Manager at Transgourmet. When new members of the sales team arrived, they didn’t have a clear vision of where their territory was supposed to be.

With a view to streamlining this process, teams at Transgourmet decided to look to location intelligence for the answers. Their goal was to give their 42 managers a geographical, map-based decision-support tool that would allow them to simulate new commercial sectors taking into account client sales figures and number of potential clients per town. “Sales sectorization is crucial in our business. We face fierce competition from specialist players that have a strong sales force. As a result, it is essential that we optimize sales coverage throughout the whole of France with our 345 salespeople so that we remain one of the market leaders”, explains the sales manager.

It’s a situation that very many companies face, as Sébastien Connesson recalls: “Let’s take the case of our client Heineken. The distributor had to cover almost 200,000 sales prospect areas with 130 salespeople. How could they be sure of being there for each of these potential customers without maps and rational data? our expert asks.

Beyond the tools

However, Sylvie Toche-Morel insists that “The tool can’t do everything. We also have to consider a lot of human criteria beyond the objective data provided by the location intelligence application we created with Galigeo”, the expert explains. And so, the special relationship that sales staff build with their existing customers remains a key element to be taken into consideration when dividing sales territories up.

Towards a collaborative sales sectorization

So, what does the future hold? How will sales sectorization develop? “Gradually, organizations are going to have to become more flexible in this area. In the past, they tended to go through the cumbersome task of sectorization every year. Going forward, companies need to engage in a more iterative and collaborative process at all levels of the company”, Sébastien Connesson concludes.

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