Introduction
Josh Sweeney: Hi, my name is Josh Sweeney, joined by my co-host, Taylor Barnes. Taylor, how are you?
Taylor Barnes: I’m doing great. Can I tell you why?
Josh Sweeney: Why’s that.
Taylor Barnes: Because I planned my sales territories ahead of time, and that means I don’t have to deal with a lot of the fallout. And today I want to talk more about that.
Josh Sweeney: I totally understand that. I feel like I’ve had so many conversations about realigning and where people didn’t think about the future.
Taylor Barnes: Mm hmm. Yeah, this is such a topic for our sales leaders, you know, and to be clear, we are talking about creating sales territories that deliver results. So I don’t know if you are in products or service or health care industry or whatever, you’re right. But if you lead a sales-driven organization and you want to lead on purpose, you want to create purpose-driven sales, well, then you have to be very intentional about creating your sales territories, about where you’re going to position yourself, what you’re going to position within that and how you’re going to do that. And it starts Number One, in my opinion, Josh, by creating sales territories are going to deliver the most results.
Why Sales Territory Creation Goes Wrong
Josh Sweeney: Yeah, definitely, I mean, you really want to look at what’s going to create the most results, what kind of issues are you going to run into and what is the long-term effect of those sales territories based on where they are going? So you have to have some forward-looking vision for this. So, you know, if it’s going if you’re going to plan this, let’s talk a little bit about some of the reasons why territory creation goes wrong first.
Taylor Barnes: Yeah, yeah, it happens a lot. Now, look, I think it’s very important that, you know, one of the things that I think we’re trying to accomplish here is as leaders are we’re trying to do this right, the first time so that you can have an effective long term plan for your territories. This isn’t rocket science. If we switch up the way that we’re assigning reps to different territories every month, well, that’s going to be a nightmare, right? We obviously want to create the most impact by creating longevity because we know how long relationships take to build. We know how long the sales cycle is and a lot of different reasons. So doing it the right time, the first time having an effective long term plan is obviously the challenge. Now, the reason that this happens, Josh, is I think that if you don’t change the territory organically, eventually you’re going to have issues such as the old sales rep collision, right? No, that’s my account. No, that’s my territory. No, I called them first. Well, I have an opportunity and you don’t. And you’re prospecting. And I’ve got a better relationship. There are so many things. And what happens is it just gets tangled. And you look at this territory and it’s just tangled with one or more reps, having different conversations with different people that could have different parts of the sale. It just ends up being this big Christmas light tangle and those examples. And I know you’ve seen that, right?
Organic Growth
Josh Sweeney: Yeah, definitely, I mean, through organic growth, you start to just run into different collisions and ways that territories go wrong and a lot of times they’re on the fly changes where they address a problem today, but they don’t address the problem you’re going to have next year. And, there is a certain amount of balance between that. But you can definitely look at the organic growth of the organization and plot that a little bit and say, OK, do we need to change this methodology? We just need to make this change or do we revamp the whole system with one change to get past it? So, yeah, organic growth is just one reason that territories need to be changed over time.
Taylor Barnes: Yeah, I think there’s a lot of reasons that it’s good to do this the first time. One of the other reasons that I think is obviously very blatant is that if you don’t, you’re going to end up with too large of a sales territory with a lack of focus. All of a sudden, you’re going to be trying to take the world by storm instead of really niching down into a specific area or go where you’re going to really make the most impact again. Guys, we’re talking about niching down appropriately to where you’re going to have the most amount of impact in a given territory that you have intentionally assigned to a salesperson or a sales group. And I think, Josh, you have a pretty good story about this with Salesforce. And I would love to hear it.
Josh Sweeney: Yeah, one of the things I noticed in my CRM background of working with different CRM vendors was that Salesforce is the 800-pound gorilla, but it was really interesting in how they focused their territory. So they would take something like whereas their competitor would say, hey, I’m hiring a sales rep for the Southeast and they don’t get a whole lot of penetration and they have all this ground to cover. You know, Salesforce takes somebody and says, OK, we’re going to give you the northeast portion of the metro Atlanta area.
Taylor Barnes: Yeah.
Josh Sweeney: And you better maximize it. Right. That’s what you get.
Josh Sweeney: And it’s really interesting. And with that level of focus and really bringing it down to that level, I think there was a lot of strategy that they really thought of. And I know some people say, well, look, Josh, we’re not Salesforce. We don’t have the money to go hire somebody for every small slice of a state. And really, it’s kind of the inverse. You actually don’t have the money to have one person try and cover an entire region.
Taylor Barnes: That’s right.
Community Effectiveness
Josh Sweeney: Right. You could go into the metro Atlanta area and say, this is your area, maximize it. And now they also don’t have to fly anywhere. They can drive. They can build local relationships better because they can get in front of people. So there are actually all kinds of benefits to thinking about it in the inverse and focusing on a given area, geography or vertical or industry or whatever that might be. So that’s one thing that we saw with different vendors. And, you know, I’ve also shared in other ways, like Chick-fil-A kind of has the same model there. Another one of those where a franchisee doesn’t own 10 stores, like in a bigger model. The goal is to own more stores, make more money. But Chick-fil-A’s stores do two to four times what another local franchise does because they only really focus on that one store. Now, there are some unique situations where a person may get two stores, but most of their owners and operators have one store and they really have to maximize their effectiveness in the community. But when you have just that targeted area, you do everything you can to really penetrate one hundred percent of that area instead of the example of, well, I’m just going to penetrate and get five percent here and five percent there and five percent there, like a roaming sales rep or like another franchise would. Too large of an area with a lack of focus, you know, is one example of why territories fall apart and have to be redesigned.
Taylor Barnes: Yeah, and I think along those same lines, there are plenty of local business communities out there, so quite frankly, the locals know the locals. And by you having a focus in a certain area and if you develop such a great relationship, your chances of getting referred to another local business, whether in the SMB or in the enterprise space or if there’s a CIO kind of community out there or a CEO community out there, well, then you stand the best possible chance of getting introduced. And you also have a pretty decent reason then to ask for a referral. Locals know the local communities are a very real thing, and by having too large of a focus, you’re never really going to be able to take advantage and leverage. What kind of business communities you could really take advantage of by getting down and, you know, very niche down into that community. So I think that’s another really good reason in that regard why it’s so important to do this right the first time so that you can maximize your presence. General Electric, for example, is a good example, trying to take 100 percent of that specific area right now. Who knows if it’s going to be 100 percent. But in this regard, if you could take as much business in a specific area, that’s very, very practical in that market if you’re able to make the most in a smaller area versus such a bigger area.
Josh Sweeney: Yeah, and we talked about this on a previous podcast, but I mean, the impact of the person, too, is if I give somebody a whole southeast region, for example, and then I get a new rep and I give them one of the states, I give them Florida. Well, now that rep feels I’m taking something away from them. Whereas if I have a rep and I say, hey, you’re only focused on the metro Atlanta area, penetrating that community, that group. And I get a new rep and I give them South Florida, Fort Lauderdale, Miami area. Then I just added another rep that’s got another focus. Right. And there’s no strife. There’s no issue there. So you can really figure out how you want to design it from the beginning and what those pros and cons are. What’s another reason? Another reason I think this happens, like the issues with sales territories, come up is a lot of people don’t really go out. And I don’t feel like they at least research and talk to other people who have designed sales territories and say, what all did you run into? Right. So they just kind of consistently, organically change it as they grow and go, OK, well, we got a new rep here, so take it away from this guy.
Taylor Barnes: Right.
Josh Sweeney: Add it to this lady.
Taylor Barnes: Mm hmm.
Josh Sweeney: And boom, there’s our sales territory when in fact, I think if we go out to some experts and do some research, we’ll start to really quickly figure out how we might want our territories to look for the next five years.
Enterprise vs Small & Mid-Size Businesses
Taylor Barnes: Yeah, and what a great segway into the different types of solutions that you could come up with to do this the right time. So when we look at sales leaders out there and being intentional with how they go about their business, you know, Purpose-Driven, I would say that we’ve got a handful of different ways to do that. But I think the three most common, Josh, are probably company size, geography, and verticals, just to give you the three most common ones that we hear about in a lot of different businesses. So what do I mean by company size? Well, there’s a lot of different ways that you can slice this up. You could slice this up by employee count, user count, office count, franchise count, whatever it is, for the most part, just at a big macro level, large corporate enterprise versus small business. SMB tends to be the most easier way and one of the easier solutions that come up with sales territories is understanding if it’s a corporate enterprise account or a small to medium business. And I imagine in your world, Josh Sweeney, you probably see a lot of this when it comes to some of the marketing efforts that go up to where they tend to blend. They just go after they have the same message to the people that are in Enterprise or an SMB. And just what a nightmare. Right?
Josh Sweeney: Yeah, I mean, there’s no way to blend SMB and enterprise sales because the marketing, messaging, the length of the sales cycle, the effort from a legal perspective, the experience of the sales rep are all completely different, just completely different on every level. So the resources are not even the same. And it’s when you treat them the same that you get kind of mediocre results. So we do see a lot of people split by company size, and sometimes it’s not even company size, sometimes it’s just deal size.
Taylor Barnes: Yeah.
Josh Sweeney: Know, they’re like, oh, well, this gets routed to this person because it’s an enterprise, but they’re only signing a 10 seat license. It’s like, well, 10 seat licenses we’re not going to do that. Right. And there are rules and things that you have to put in place for that. But, yeah, definitely company size as another solution.
Geographical Focus in Sales Territories
Taylor Barnes: Yeah, agreed that that’s a good one. And again, slice that up however you want a company size, and figuring out what makes the most sense for you is a great, great hack. Another one that I find a lot is geography as we talked about. So let me give you an example. We have, you know, a lot of in our business, we’ve got a lot of technicians that go out all over the world. And one of the reasons why we import that model, instead of hiring W2 all over the world, we work with the local independent contractors. The reason that we do that is that they understand the local geos. They have the local knowledge, they have the culture, they have the language. They’ve got this feeling that a lot of people that don’t live in the area have. And that’s an immediate advantage. Now, whether you want to talk about perception from the client’s point of view or just general, you know, cultural alignment just to make the customer experience better, that that is an area that I can assure you, you know, is a good thing. So when we talk about, you know, territory driven and whatnot, make sure that you’re looking into, you know, geography to take advantage or to leverage as much of that local knowledge as you can.
Josh Sweeney: Yeah, I’m a huge fan of geographical focus, and that can depend on the size and the types of deals, right? If you only sell to Fortune 1000, then you’re it’s hard to focus geographically because you don’t have a density. But in a lot of businesses where especially in the SMB market, where you do have a density, you know, having feet on the ground in that location, all of their budget, all of their focus goes into getting inroads into those communities. And the local events and the local associations have the biggest possible impact that you can have as far as a sales rep really getting traction instead of focusing on lots of different areas. Again, that geography can change based on the size of the company you’re going after and really what the density of your prospecting, your ideal customer prospect profile looks like.
Taylor Barnes: Yeah, and look, many times and I’m sure you’ve seen this just in those first two examples, company size and geography, there might be some cross-pollination in terms of, you know, how you structure a territory that might be a combination of those two. But being able to do your research at the local level, do your research, understanding the size of the organization or the deal size, all those things are going to help you structure the type of territory for the long term so it doesn’t have to be chopped up and changed all the time. And the last one, not the last one necessarily, but the last one. And our examples are in the verticals and yet specific verticals. I do mean industry types. Now, one thing that I love about this step, Josh, is there is a side effect to creating a sales territory within the verticals, and that ends up looking like a subject matter expertise. So you have health care, for example, you are now pitching the exact same message to the same different customers that have the same challenges. They have the same obstacles. They have the same regulations that they need to follow. If they’re in a specific vertical, there’s not a ton of, you know, just change. When it comes to your approach to a deal, your sales cycle, there might be some time differences and whatnot. It might take longer and, you know, based on company to company. But if you are industry-specific, vertical-specific, that will give you a leg up on the competition because you’re going to know what your common objectives are. You’re going to know what the common challenges are throughout that they have to deal with. And you’re going to start developing this subject matter expertise in that vertical so you can put yourself in their shoes a whole lot easier than someone that doesn’t really understand the vertical.
Josh Sweeney: Yeah, most definitely, I mean, vertical seems like one of the best ways to go, because you can carve out that vertical, you can build marketing content that speaks to that vertical. You can get multiple case studies in a vertical. You can start to speak their language and learn their language, which always resonates more. And I think this is where a lot of people get tripped up because they’re like, well, we sold this deal and we can do the same thing over here. And it’s like, yeah, you can do the same thing over here, but you are restarting in a way that you might not have the sales enablement content that speaks to that vertical. You know, any time that marketing content is too broad, it speaks to nobody. Right. And you can still use it. It’ll still get you through some deals. But the content that speaks directly to that person, that title, that vertical, the more specific, more specific it is, the better it speaks to them and the more they also see your industry experience and also trust you. Right. So any time somebody goes out and has six different competitors they’re comparing to and you have three exactly in their vertical that speak their language, that are customers of yours, you’re one of those six that are their competitors, you know, on their shortlist, then they can they’re really going to trust you because of all the information you’re providing.
Carving Out Sales Territories and Niching Down
Taylor Barnes: I love the way you said that if you’re marketing to everybody, you’re marketing to nobody. That’s so true when it comes down to this. Now, one of the things that you said earlier about verticals, I want to leave everybody with this. I agree that that’s probably one of the easiest and the best to carve out sales territories. And for the reasons that we just went over and I mean, when you talk about verticals, you’ve got a product or service that probably does not fit with every vertical out there. To find the ones that it does, whether it’s in manufacturing, health care, financial services, whatever the vertical is. If you’ve got a product or service that feeds into that, then lean in, lean into that vertical. And then maybe, as we talked about earlier, we can cross-pollinate with some company size, some geography and. Really, I mean, continue to niche down, niche down, niche down until you are creating the best possible area for your sales efforts, marketing to close in a specific area that’s going to deliver the most results from creating these territories. That’s exactly what we’re trying to accomplish here. You have to do this on purpose.
Josh Sweeney: Yeah, most definitely, and it’s important to keep that any of these can be overlayed and overlapped and combined, right? So if somebody is going to focus, you have a sales rep that focuses on fintech in Georgia, then, you know, they have a geographical and vertical focus. And that’s another thing to keep in mind. I mean, certain cities have very different groups of audiences. Right. So if you think about Atlanta, we’re a big fintech hub. We’re also a big information security hub, whereas you may go into another city and say, well, we really want to do information security in New York, or you might find that it’s probably better to have another fintech salesperson in New York than somebody doing information security because each one of those states and each one of those metro areas are prone to having certain concentrations of audiences. So that’s another thing that can go into the research to say, how do I want to build a company over time? How do I want to grow the sales team and set the territories?
Taylor Barnes: And, you know, I was just kind of laughing at myself, one of the things that I just know is one of the benefits of doing this, not just to make sure that you deliver the most results, but talk about what is an easier way to manage. I mean, what an easier way to manage when you have that level of detail and to how you structure your sales territories. Well, now, as a sales manager, for example, you can speak the same language to your reps in that vertical. You can speak the same language to the reps in that geography instead of having the same management strategy or maybe the same, I don’t know, KPIs and strategy and pitch and support. Now you’re able to really get down and start, you know, supporting the language that they speak with their customers. So just as a general hacker, I think this is going to make it a whole lot easier to manage. In fact, I’m actually going to go look again at the sales territories that have already been created to make sure that I’m letting you down appropriately, Josh, because, again, I don’t want to have to deal with the fallout when we have to change. And not saying it won’t. It absolutely will. But if I don’t have to change them as often, it is going to make our lives much easier.
Josh Sweeney: Yeah, most definitely, I mean, if you spend a few hours to really think through it upfront, you could save yourself weeks of headaches and team headaches and team challenges and upset and upheaval in the future with a little bit of effort. So with that, we have our final question. Are you planning your territories and do you have a written territory plan that you can follow?
Taylor Barnes: And this has been Purpose-Driven Sales with Barnes and Sweeney, now go lead on purpose!
