Sales operations teams often face a dilemma when they are realigning sales territories. Some territories are built around the sales representative's location, not the customer's.
That's a problem. And it has consequences:
- Sales reps leave
- It results in sub-optimal territory alignments
- It leads to poor sales rep utilization
Sales territories should be designed and optimized around customer locations. Ideal sales rep locations are not geographic centers but weighted centers.
What is a territory weighted center?
Imagine eating a donut, but the jam is not in the center, it's off-center near the edge. That may be a poorly designed donut, but an optimally designed rep location in sales territory. Why? Because you want your rep to be where the jam is as it represents your sales potential. Your highest value customers are clustered in this area, so your rep's location will be centered around customer locations.
Above is an example of a sales territory geographic center. It is rarely an optimal location for salespeople.
Above is the sales territory weighted center. Your sales rep is located near your highest customer concentrations.
Move from manual workflows to automation
Your job is not easy if it involves manual workflows, but with sales territory alignment software that includes a weighted center feature, your heavy lifting is done in seconds. When will you use a weighted center?
- When you are consolidating or merging sales territories
- When you are creating new sales territories
- When you are realigning sales territories
What data do you need?
First, you'll need your sales territory definitions.
You should consider your design building blocks. Do you design alignments on state, county or zip level? Or will you align based on accounts (points-based)? Read how Thermo Fisher uses points-based alignments to build sales territories.
For some, it is a hybrid model of zips and points-based.
Overlay your territories
Next, you'll overlay your account data on your territory definitions. You can include prospects, leads, sales opportunities, and sales potential data. Then the magic happens, the software will automatically create a weighted center using a weighted center algorithm.
What you will see is a suggested ideal location. You'll notice that it is not a geographic center. That's perfect as you want your sales rep's location close to your sales potential areas. It results in lower travel time and higher sales rep effectiveness. Your sales team is more productive and you are adding up to 30% more selling time to their day.
You have the ideal location to begin your recruitment process if you are hiring.
Realign using weighted centers
Many sales operations teams visualize the weighted centers for existing sales territories. And when sales reps leave, they begin a realignment process. They will design new alignments, hire a new salesperson, and locate them as close as possible to the weighted center.
It is not always possible to hire a rep in the ideal location, but you have a perfect starting point to begin your search. And any outcome will be superior to a geographic center or a salesperson's home address.
When hiring, realigning, merging, or consolidating sales territories, unlock the power of weighted centers and drive your sales productivity.