Use Territory Management to Increase Leads
Sales reps accuse their marketing departments of wasting money on programs that create worthless marketing inquiries. Direct marketing personnel object, protesting that salespeople never follow up on the leads they send them.
The critical fix to internal direct marketing and sales wars within technology companies lies in developing direct marketing programs that are based upon the salesperson's view of the territory. I call such programs territory management.
Territory management programs combine telemarketing resources and sales and marketing databases in a way that improves the daily effectiveness of direct sales and direct marketing personnel alike.
Realities of Territory Coverage
Over the course of a year, a business-to-business technology direct salesperson actively works on 25 to 30 valid sales opportunities, closing 12 to 15 sales. Detailed studies of technology companies reveal that salespeople spend 80 percent of their time working on these active sales evaluations.
Typically, the technology salesperson goes through an annual classification process to prioritize accounts and focus on those candidate companies that have the best opportunity for producing revenue.
The problem with this informal process is that the salesperson is performing account qualification based upon a very limited knowledge of the marketplace. With territory sizes ranging from 300 to 500 prospects, the salesperson is forced to make quick decisions about where to spend his or her time.
On the average, a high-energy salesperson might contact 75 to 100 organizations to determine their "buying status." This leaves the majority of prospects untouched by a direct sales rep. The number of noncontacted companies can be even higher when you consider that, more times than not, detailed profiling of the territory by the direct salesperson stops when immediate sales opportunities are uncovered.
Poor territory coverage has serious risks. The accounts your salespeople are currently working may not produce business for your company. Furthermore, the accounts that are not contacted are fertile grounds for the competition.
Why not simply add more salespeople? This is a valid way of solving the problem of territory coverage. But it certainly is not the most cost-effective. Good salespeople will normally find the low-hanging fruit within the territory. It is not unrealistic to expect that they are involved in 60 percent to 70 percent of the sales opportunity.
Bringing in additional sales personnel will improve the coverage, but the incremental revenue to incremental cost will be much higher than direct marketing alternatives and may even prove to be unprofitable.
Hi-tech direct marketers would do well to consider developing territory management programs to improve overall territory coverage and the quality and consistency of leads flowing to the sales organization.
At its basic form, territory management is a carefully planned and coordinated telemarketing and database marketing program that is tightly integrated with the day-to-day activities of the direct sales force to maximize sales coverage.
There are four key elements to a successful direct marketing territory management program.
The Database: Direct marketers would rather acquire lists than build accurate databases. Why build when you can buy? And why attempt to build something that is impossible to maintain?
For complex BTB technology products and services, however, the right list often is impossible to find. Targeting organizations for potential business development activities requires more than just a list of companies or high-level contacts.
It requires knowledge about the target prospect's technology infrastructure -- hardware, operating systems, databases and applications in use and for how long. It also requires strategic information about the prospect's business: Is it growing? Are there acquisitions or new products under development?
The database is the critical ingredient for hi-tech direct marketing and it must be structured in such a way as to make it useful for salespeople as well as direct marketers.
Trained and Integrated Telemarketing Organization: Telemarketing support for hi-tech products and services has come a long way since the 1980s. There are many companies that can provide professional resources to execute call programs or to assist a company in building an internal call center for sales support and lead generation.
There are two critical success factors for the telemarketing resources within the program. One obvious ingredient is to train these resources to answer any sales-related question possible. This requires a commitment to education.
Second, and the most critical, is for telemarketing resources to be fully integrated with field sales personnel. This does not mean decentralization in terms of daily control and management. It does mean that telemarketing support personnel receive constant direction and feedback from local sales management. Area and district managers must have full control over the deployment of calling resources within their sales territories if comprehensive territory coverage is to be achieved.
At the same time, sales managers with appropriate direct marketing resources should be held accountable for thorough territory coverage within their respective sales regions.
Reporting Designed for Sales Territory Management: Direct marketers should undoubtedly own the database. It also is critical for direct marketers to understand and provide a sales rep's view of the territory. In 1985, I developed my first sales and marketing system based upon the sales organization's need for information.
The series of reports was based upon a manual reporting system used by a very successful sales rep. The salesperson kept all of his knowledge about the territory in his DayTimer (notebook computers were not yet in vogue). Very simply, the report was a spreadsheet. There was one row of information for each prospect.
For each prospect site, the columns listed our company's products installed at the site, competitors' products installed and product opportunities not yet penetrated. This view of the territory enabled salespeople to make informed decisions and take proactive action for optimum business development.
Direct Campaigns: Aggregating individual territory views into industry or geographic regions allows the hi-tech direct marketer to develop highly customized programs aimed at specific subsets of market opportunity.
Having a consolidated view of your company's market share vs. specific competitors' or your success in penetrating specific technology platforms allows the direct marketer to make informed decisions about which market segments to target and the design of appropriate offers. Armed with a comprehensive database, the direct marketer is free to tailor or customize programs at an industry, sales territory or specific client level.
In today's age of mass customization, technology direct marketers must develop programs of comprehensive territory management if they are to be successful in expanding sales. Technology direct marketers must develop a detailed level of knowledge about individual customers.
Without such information, direct marketers will continue to be executing vague programs to "names on lists" that result in low-quality inquiries for their sales forces.
Jerry Goldstein is president of Market Makers Inc., Atlanta, a marketing consulting firm specializing in developing integrated marketing programs for hi-tech products and services.