It seems obvious, but you wouldn’t (couldn’t!!) drive a car with a critical component missing or malfunctioning, yet many companies carry on with sales territories that are either unfilled or occupied by non-performers.
The sales function is critical, and some would say the most critical, of a company’s components. As the key revenue generator, the effectiveness of the sales function makes all else possible. Optimizing the effectiveness of the sales function should, therefore, be a very high priority for management. But before getting into issues like effective incentive compensation, training and lead generation, the most basic consideration of all is: Let’s Ensure that All the Sales Territories are Occupied!
The Standby Approach
In my days at Xerox, we had a standby approach to keeping sales territories full. Every sales team had at least one Associate (or trainee) Sales Rep (ASR) who had been through formal training but was not yet assigned to their own territory. The ASR would travel with regular sales reps on a rotating basis to get field experience from a variety of seasoned veterans. When one of the veterans left their role due to promotion, resignation or termination, the ASR would be ready to fill the void by being assigned a territory of their own. No territory went unfilled for long.
There is a cost to this approach of course. You have to compensate the ASR at some level for the time that they are training and in a holding pattern, waiting for a territory to open up. However, the cost of not having an ASR-type approach is that when a territory becomes vacant (often suddenly), you may have an open territory for several months during which revenue may languish. Yes, there is a balancing act between the cost of the ASR and the potential revenue loss. It is also much easier to carry on the ASR approach for a large sales team where the holding time until an open territory appears is likely shorter than for a small team. In the end, it is very expensive to NOT have salespeople constantly pushing for more revenue. As we have argued elsewhere, good salespeople are essentially free.
The “Phantom” Standby Approach
An alternative approach to the full-blown ASR concept is to stop one step short of actually hiring an ASR without a specific territory to be filled. Why not just be continually looking for exceptional salespeople who fit your criteria? Steve Jobs understood this and it was a key to his success!
Keep a list of individuals in your industry who you would love to hire if you had a need and they were available. Maintain an engaging website that will encourage potential candidates to be attracted to your company and to contact you. This will allow you to have a conversation and maintain their information on file for when an opportunity does arise. On your website and social media, make it clear why salespeople would want to work for your company, not just for the money but also for the immediate challenge and for the opportunity for career progression. For a small investment per month, you can run a continual job posting that you can monitor weekly for any outstanding candidates who might throw their hat in the ring.
As a Toronto-based head-hunter, Kathbern Management offers a continual market scanning service that costs no more than regular recruiting. Ask us about it.
It May Not Look Like an Open Territory But……..
OK, you say all your territories are occupied so you didn’t need to read this article and have no pressure to get ready to fill an open hole. But is every member of your sales team firing on all cylinders? Is it possible that someone out there who isn’t yet working for you would be a much better performer than your lowest ranked sales rep? How much of your reluctance to replace them is due to the fact that you don’t have a ready replacement on hand, or even in mind?
Having an ASR-type approach or even a Phantom ASR approach will give you confidence in your ability to make a tough call and replace an underperforming sales rep in a reasonable time frame without unduly harming your overall sales results. In fact, your results will probably improve considerably in short order.
Don’t Relax Just Because the Territories Are Filled
Once you have the best salespeople you can find firmly planted in their territories (through head-hunters or any other means), there are tactics you can employ to ensure that you are getting the best bang for your buck.
Read More: Getting Fast ROI on New Sales People
You also need to understand how your sales team is performing and what you can do to ensure that the numbers work in your favor.
Finally, take steps to reduce turnover on your sales team – not counting the turnover that you initiate due to poor performance.
- Fill open territories as an ultra-high priority.
- Adopt the “ASR approach” if the size of your sales team and rate of turnover justifies it.
- As a secondary option, adopt a “Phantom” ASR approach to have a perpetual list of good sales candidates available.
- Don’t keep an underperforming sales rep in position just to keep the territory filled – take action!
- Continually review your approach to your “sales machine” to ensure that you are getting the maximum results from your investment.
Kathbern Management is a Toronto-based executive recruiter focused on working with organizations who are seeking to find and hire the key people who are critical for their success.
Contact us today for a free consultation about your key person search.