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Territory Analytics – Is It a Lost Art?
By Dr. Rick Johnson
Thursday, 7th March 2013
 

Take this seriously; territory Analytics is NOT a lost art -

Analyze both the potential growth rate and shrinkage rate for the top 20% of your accounts that make up 80% of your territory sales total. This may be 10 – 15 or even twenty accounts. These are the accounts that you have built substantial relationship equity with. Start with historical data on each of these accounts. This will enhance your intuitive judgment.

Talk to these accounts; ask specific questions about growth and future opportunities.

Are there changes in the market, leadership, or performance that you can anticipate and incorporate in your projections? Don’t just go through the motions. Try to validate the facts, the assumptions and even the opinions if possible.

“Remember – your Forecast is the baseline foundation that your company must build a budget on. If you screw up the forecast you screw up the budget.

What About the Other 80% and Accounts I Might Lose 

Look at this group as a whole. Check historical data.  Survey these accounts to see if there are any in the group that has unrealized potential that could thrust them into your top 20%.

Sales people must reach another level of granularity in terms of buying influences and the total number of potential customers in your market.  There should be a complete database. Just imagine a circle which encompasses ALL consumers of product in your market; that’s the distributor served available market. (SAM) 

Some of those customers buy from you and some don’t.  Your computer database shouldn’t consist of just your customers.  It should consist of ALL customers and there’s a level of granularity beneath it, in terms of where the “buy” influences are at each account. 

In other words, there are a lot of things that are different based on the type of accounts and the mix of products used. As you collect data, creating customer profiles by buying influence and real potential, clarity starts to emerge based on that potential, then you relate those accounts back to the total territory potential.

Most companies have a historical understanding of their “churn percentage” — the ratio of business that you lose/shrink/complete on a year to year basis. Consider this percentage along with your personal knowledge of accounts to come up with an intuitive estimate on your churn rate. The important point is that you do not ignore or pretend that you won’t have churn; everyone has churn. Predict it, budget for it, and then work hard to reduce it.

Promote Your Territory Plan

You need to have buy-in as well as a thorough understanding of all the resources and support team necessary to achieve your plan. This includes crystal clear understanding as to:

  • How often will your plan be reviewed by your sales manager coach?
  • Who is on the team that will support your plan?
  • Have you created an opportunity pipeline process to help track success?
Unfortunately, many organizations have a bad history of requiring territory plans and then using those plans as an in-blood-commitment to beat up people for performance instead of coaching and mentoring them to help them maximize results and meet objectives. This must be avoided and if you have a sales manager or VP of sales that has this mentality or methodology and you can’t change them ---- Change Them!

Don’t Ignore Prospecting

Prospecting is essentially trying to find an opportunity where you have no volume and it may or may not have potential so there’s a constant churning.  What you’re trying to do with prospecting is look at the movement and buying influences in your market. 

You may be in an industry that requires a lot of prospecting or you may be in an industry that requires a lot less but every sales person has to do some level of prospecting.  That does not mean the field sales people go out making a bunch of cold calls and use up 20-30 or 40% of their time.  Typically leads get qualified by inside sales first, appointments can even be set up and field sales people go out to determine potential and begin building a relationship.

Rick Johnson, expert speaker, wholesale distribution’s “Leadership Strategist”, founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com 

www.ceostrategist.com

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