Recently I have met a few companies that insist on not having territories for their sales team. I call this a 'territory free for all,' and it's an approach that will only lead to only leads to dysfunction and poor sales. Here are six reasons why:
1. You create a variety of conflicts. Inevitably one seller will think another is poaching (maybe he or she is). There will be questions about who gets to work the subsidiaries, additional offices, add on business, or international business. There will be conflicts about when the lead is no longer being worked by one seller and can become an open lead again. There will be conflicts about whose turn it is in the queue to receive inbound leads. And so on. Are you a sales manager or a conflicts specialist? Remember that while these conflicts are brewing selling is not being optimized.
2. Sellers can't fully leverage their referral networks because they always risk that the company they're referred to is being worked by someone else. Sellers in an open territory environment do not ask for referrals as often as those who are in a territory (geographic or vertical market).
3. Despite your best attempts to set rules, sellers will find ways to sit on the biggest accounts, barely working them, in order to ensure they stay in their leads list.
One client I worked with had a six-month rule, meaning that if a seller could not qualify the account in six months, the prospect would be put back in the open lead pool for another seller to work. What happened? The seller working the deal would find any way to push the boundaries -- including being dishonest about progress -- to hang on to every possible lead.
4. Networking grinds to a halt because no one wants to go to an event where they might bump into their colleague's prospects.
5. Open leads become irritated because they receive constant calls from a variety of sellers trying to qualify them. I have a client with over 300 sellers organized in a 'territory free for all.' One day, while listening to calls, the prospect said, "You are the fifth seller from your company to call me this week!" It was only Wednesday…
6. Your top sellers leave. Top sellers don't want to work in a conflict laden dysfunctional environment. Period.
Organize by geography, vertical market, company size, or a combination of all three. The important thing is to get organized. You'll improve morale, retention (client and seller) and sales as a result.
Sales expert Colleen Francis is founder and president of Engage Selling Solutions. Ms. Francis ensures clients realize immediate results, achieve lasting success and permanently raise their bottom line.