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Manage Your Selling Territories Effectively Through Your Sales and Marketing Plans
Whether your business is large or small, dividing your markets into smaller, more manageable segments, especially into smaller geographic segments, really boost results. This should therefore be an important part of the sales and marketing plans you develop for your business.
BECOMING A BIG FISH
Why be a small fish in a huge pond when you can be a giant fish in a smaller pond? Turn your entire selling region into many little ponds and success may be significantly easier.
This is elementary and needs to be an essential element for most sales and marketing plans. But over several decades I have been surprised at how many companies do not recognize the power of this strategy. Chunk your territory into smaller parts and suddenly it’s much easier to dominate each region.
Managing Your Selling Territories Effectively With Your Sales and Marketing Plans
Before we address the dividing of territories into small manageable pieces, let’s understand the importance of “specialist” salespeople – who concentrate on different buyers.
To recognize the value of specialist salespeople, let’s look at the experience of a company selling dog supplements through dog groomers, breeders and veterinarians.
Here’s a classic case of where sales and marketing plans could erroneously identify three seemingly similar markets which are in fact radically different.
Dog breeders advise their puppy buyers to use this supplement because of the enduring health benefits to the growing pup. And these breeders are influential. After all, the breeder is perceived as an expert in dog affairs.
By contrast, dog groomers do not command the same expert status as the breeder. After all, would you take health advice from your barber or hairdresser? Maybe…Plus, the dog groomer is not dealing with puppies, but rather, with older dogs of all ages and breeds, so acceptance of them as “health experts” is less than with a breeder.
Veterinarians have even more dramatic differences from groomers and breeders. Like doctors, they are difficult to contact. And although their recommendation carries more weight than the dog breeder or groomer, if this supplement dramatically reduced the incidence of dog illnesses or worse, eliminates many illnesses for say $50 to $100, is that attractive to a veterinarian who could earn thousands of dollars medically treating many of these same illnesses?
Like the pet supplement company, your sales and marketing plans could generally be significantly more effective by dividing your market into segments with totally different characteristics, where using reps that specialize on just one segment at a time can greatly boost their effectiveness and results for you.
The second of the primary Sales Management elements to be addressed in your sales and marketing plans is Territory Management.
Businesses tend to get in trouble when they hire reps or rep organizations and leave them alone to do their job. People left to their own devices will often surprise you by under-delivering on your goals.
The first and most important tool in managing your sales is dividing your geography into smaller manageable regions.
I am surprised how many businesses do not divide their customers into specific regions and instead, let their salespeople compete in the same region. This is true of major companies and smaller ones alike. But for smaller ones, you cannot afford to be inefficient. Your sales and marketing plans need to outline the simplest, fastest, least costly, most effective way to capture customers.
An electronics distributor I worked with, a pet supplement company, the Fortune 500 division of a high tech company… All these had sales reps tripping over each other and competing with each other because the owner or president didn’t understand the importance of having dedicated markets.
By developing sales and marketing plans that divide a territory or market into distinct manageable pieces, it becomes significantly easier to manage.
Also avoid sales and marketing plans that promote geographic “isolation” – where you have customers, branches or divisions far from each other, with no specific region enjoying full saturation.
Why open a branch in Los Angeles, Chicago, Miami and New York, with none of them dominating their markets. Why open offices in different counties or regions before you have dominated your own back yard?
- Do you have full saturation?
- Do all your potential customers know you exist?
- Are you selling like crazy in your own neighborhood?
Before you consider moving outward on the map, your sales and marketing plans need to establish a starting point, that you will do whatever it takes to dominate your own local market first, before you expand beyond. Then, for each new market, you will do the same.
If this is not a core strategy in your sales and marketing plans, you are just making it unnecessarily hard on yourself? Like fighting with one hand behind your back.
Wal-Mart dominated small markets and became unstoppable long before they were even in California or New York. They understood that you don’t need to be in multiple markets or even in massive markets to become a huge success.
CHUNKING YOUR REGION INTO PARTS
An essential element for most sales and marketing plans is to break your geographical markets into pieces and think of each one as a separate profit center.
If you sell nationally, consider that the U.S. is comprised of ten major geographical centers that command more than 80% of the U.S. population. If you are successful in all ten, you have a virtual lock on the entire U.S. population.
But the way you dominate the U.S. is NOT by opening offices in the ten largest U.S. cities. That’s nuts!
The secret, that needs to be clearly defined in all your sales and marketing plans, is to open in a single location, and then systematically expand outwardly from there.
Like a virus taking over a body, you expand your business outward from where you are. Once you control a specific market or region, then and only then should you select a second market, one at a time, and expand outwardly until you control that as well.
Define this rule into your sales and marketing plans and controlled growth will suddenly become much easier for most businesses.
WAL-MART CRUSHED COMPETITORS THROUGH METHODICAL TERRITORY MANAGEMENT
One of my friends and mentors was a division president for one of JC Penney’s chains. He explains how they had stores in Kansas City, but then, along came Wal-Mart. Because their sales and marketing plans lacked the strategic foresight of a Wal-Mart, they were, in essence, a sitting duck.
In strategic fashion, Wal-Mart did not open one store. Instead, they selected the four main highways leading into Kansas City, and placed four stores, one at the head of each of these highways. In this way, they captured all the traffic driving into and out of Kansas City, and ultimately squeezed the JC Penney subsidiary out of business.
Like a strategic chess game or a slowly expanding virus, when your sales and marketing plans lay out a methodical process for overtaking a smaller geographical region, you can attain success and dominance, often for a fraction of the cost and effort that you would expect.
That’s why, laying out sales and marketing plans that define your expansion strategy will help you avoid seemingly random, isolated expansion that may initially seem like the right thing to do, but will quickly dissipate your expenses, your energy and your results.
This is an important secret to success… to methodically, strategically overtaking a region. And it should be ingrained into all your sales and marketing plans.
See Page 7: How You Manage Each Individual Salesperson Also Needs to be in Your Sales and Marketing Plans