How Much Territory Should I Give My Sales Reps?

Many new sales managers and sales reps think that the more territory you give a sales representative, the more successful the sales rep will be. Because of this common misconception, sales representatives constantly clamor for more territory. They want more geography, larger prospects, more prospects, or better prospects. With a larger territory, or so the logic goes, they will have the opportunity to sell more, earn more commissions, and generate more sales and revenue.

Less is Actually More

Here’s a classic example which shows that nothing could be further from the truth.
Several years ago, one of my sales representatives opened a new territory in Southern California. Mike was a real go-getter who would chase down every lead and call on every company he thought could use our services. No matter how hard Mike worked to create business, though, he was never able to close a significant amount of business. We reviewed everything Mike was working on – calls, presentations, proposals, etc. I realized that Mike’s efforts were spread too thinly. Together, we identified 30 key accounts that would define his territory. We developed a plan to attack those accounts, and only those accounts. We put everything else in his former territory aside.

Within a few weeks, Mike began to close deals, a few deals at first. But soon he was closing deals with regularity. Within six months, Mike was one of the leading sales reps in our company. His deal flow was regular. His backlog was solid. His commission checks were very healthy. Mike had built a successful territory by focusing on fewer opportunities, not more.

Laser-like Focus

The key to sales success often involves having a laser-like focus on your customers. Sales representatives lose customer focus when they attempt to cover too much territory, whether it’s geographic, number of customers or number of opportunities (deals). Without focus, sales reps often mismanage their time, lose sight of customer expectations, take ill-considered “short cuts,” and pick the “low hanging fruit.” As a result, your company loses or never gains the status of “preferred vendor.” Your company is not factored into your customers’ long-term strategic plans. Your company reacts to opportunities instead of creating opportunities.

So the next time a sales representatives asks for more territory, ask yourself some questions. Is this rep getting all s/he can out of the existing territory? Are his or her customer plans fully developed? Does the rep know all the key decision makers at all of his/her target companies? Is s/he consistently blowing out quota, not just exceeding it? Do his or her customers view the rep as a business partner helping them achieve their goals?

If the answers are “no,” then consider making the sales rep’s territory smaller, not larger. This may produce more lucrative results for both your company and your sales representative.

For more information, contact Wallace Management Group at (203) 834-0143 or email David Wallace.

© 2009

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