A New Way to Look at Sales Territories

In my book, The New Handshake: Sales Meets Social Media, we talk about how the creation of “organized selling”, as we know it today, is attributed to John Patterson of NCR. He was the first to formalize a system of selling that included establishing geographic territories and quota’s to the salespeople assigned to them. The practices that he established around 1893 are still largely in operation today. In 119 years, a lot has changed.

Geographic sales territories make managing sales activities and the assignment of leads easy, but beyond those things, what real advantage do geographic sales territories offer a sales team these days?

Conventional wisdom would say that knowledge of the regional or local market is something that a salesperson can capitalize on. How much does that matter anymore given the ease in which you can access information on the internet and through business intelligence tools like InsideView? Originally, geographic territories minimized travel time and associated costs. These days, holding virtual meetings has become pretty commonplace. Where then is the real benefit from maintaining specific geographies? When it comes to assigning leads to sales reps, what would happen if you assigned those leads based on social proximity versus geographic location?

What is social proximity you might ask?

It is a term you are likely to hear more and more often as the idea begins to take hold on a broader scale. In essence, social proximity is a way of determining who is most connected to the person who is on your prospect list or determined to be a potential sales lead coming through your website.

For example, I’m based in Atlanta, so let’s assume that Georgia is part of my geographic territory. A new lead comes in from an executive at Coca-Cola and because Coca-Cola is headquartered right here in Atlanta, that lead comes to me. But here’s where a potential problem comes in. What if I’m not connected to that particular executive nor have people in my network who have strong ties to that person? I’m going to have to work a lot harder to move a deal forward than someone else who is either connected personally or is connected to others who are well connected to that individual.

On the Reachable blog they shared this data about the impact that personal connections can have on sales.

  • Personal connections have a big impact on whether people return sales calls.  When a salesperson has a personal connection to the person they are calling, the person being called is 5.2 times more likely to return the call than if there is no personal connection.
  • Personal connections trigger a large increase in productivity through the sales process.  The increase in likelihood that a sales call will be returned because of a personal connection leads to a 243% increase in sales productivity, which ultimately results in significantly more closed deals for the same number of prospecting calls.

In the past, it would have been tough to determine who was most connected to a person or a company. Technology now makes that possible. Leveraging the power of personal social networks across the sales organization to assign business opportunities makes a lot more sense.

Sales execs regularly say that the 3 biggest challenges they face are:

  • Increasing revenue, which also means getting more leads into the pipeline
  • Improving deal win rates
  • Shrinking the sales cycle

Deploying a social proximity strategy could certainly help to resolve the 3 challenges noted. Granted, it will take some thought as to the best way to put this into practical application but some companies are already discovering that the results are worth it.

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