Question: Has your Sales Organisation formally designed sales territories for each sales executive to ensure you are covering your territories (in terms of leads and customers) with the correct product mix and number of sales executives? Do your sales executives make the best use of their time by selling the right products to the right customers?
According to our research at ThinkSales Global, only 42.4% of Sales Organisations have formally designed sales territories for each sales executive to ensure they are covering their territories (in terms of leads and customers) with the correct product mix and number of sales executives.
In addition, 36% of companies rate their confidence as Outstanding that their sales executives are making the best use of their time by selling the right products to the right customers.
The ‘sales misalignment’ problem
Capacity Design is a grouping of specific sales activities that are used as levers to achieve your market coverage goals. It balances client requirements, company revenue expectations and sales executive workloads in order to grow revenues.
Capacity Design misalignment is a common problem in some sales organisations and generally occurs when sales executives are able to make their targets by only selling to ‘easy’ accounts.
In other cases, sales executives spend too much time on accounts that do not fit the ideal customer profile. Still other sales executives have so many accounts to cover that they cannot serve all of them correctly, resulting in low repeat business.
The result is a diluted focus on high-priority clients, wasted time and missed opportunities, which in turn can cost your company millions in lost revenue and an erosion of market dominance over time.
Define your sales team’s capacity
Capacity Design is a process designed to help sales executives allocate their time efficiently across a large group of assorted clients and prospects.
It’s a critical first step when you need to direct your sales force’s efforts towards preferred types of customers. It’s also only for sales executives who make proactive outbound sales calls, because they can choose when and where they focus their effort.
If a sales executive is assigned a large number of accounts and prospects, Capacity Design becomes particularly important, as it helps the salesperson to allocate their time optimally instead of under-servicing all of the customers on their lists.
Realigning territories and adding or subtracting people is highly disruptive to your sales force, which means that Capacity Design can’t be continuously performed in the field. It’s therefore important to get it right. To do so, you need to have the right foundations in place:
- Ensure each capacity is configured properly for each sales executive.
- Are you determining territory geographically, by industry or by customer type? Capacity Design is only successful when you are specific.
- It’s important that each sales executive is clear on their particular capacity and knows which prospects qualify.
NOTE: Not all customers should be treated equally, particularly if Customer Focus is one of your key Sales Objectives. Capacity Management is essential in determining where sales executives should be spending their time, and in classifying high from low-priority prospects and customers.
Metrics: Capacity Design Management
Activities (these can be measured and managed):
- % of market opportunity covered per sales executive
- Has each sales executive connected with the top 20% prospects based on pre-determined numbers per week, month and quarter?
- Number of customers upsold/cross-sold
Assess the health of your sales organisation
Designing sales territories and ensuring that sales executives make the best use of their time by selling the right products to the right customers are two of 322 measures of a world-class Sales Organisation.
ThinkSales Global is a specialist revenue engineering consultancy.
We assist our clients to deliver market-defying results through strategic and tactical intentions within a Sales Organisation Maturity Model that addresses the five key pillars of high-performing Sales Organsations, namely:
- Competitive Strategy
- Customer Engagement
- Sales Talent
- Sales Management
- Sales Enablement
How does your Sales Organisation stack up? Find out by taking the ThinkSales 5 Pillar Strategic Sales Assessment™.
This first-of-its-kind 360-degree gap analysis report enables your Sales Leadership team to assess its strengths and detect weaknesses and impediments to revenue growth across the five pillars.
Click here for more information on the ThinkSales 5 Pillar Strategic Sales Assessment™.