Despite the rise of online sales, having a traveling sales force is still the norm in many industries. But physical prospecting is a costly business. That's why companies need to organize the territory they cover into distinct sectors, to boost the overall profitability of sales operations.
Today Sidely takes you on a tour of the fundamentals of optimized commercial sectorization.
On the program: a tour of the key concepts to master, a focus on BtoB sales, and finally a list of 10 key practices dedicated to brands that go through mass distribution.
Commercial sectorization refers to the division of a geographic region into specific sectors to facilitate the management and implementation of a company's commercial activities.
The aim is to optimize sales, marketing and distribution strategy. Sales sectorization makes it possible to target customers more effectively, adjusting resources and efforts according to the specific characteristics of each sector. An intelligent division of sectors enables sales rounds to be optimized, boosting sales and profitability.
Under this principle, each salesperson works with prospects and customers in an exclusive geographical area.
Over and above profitability, a well thought-out division of territories helps to focus actions and avoid dispersion of sales staff. In this way, companies can ensure that the market is properly covered, and coordinate their strategy of expansion or defense of market share on a territorial scale.
An optimized commercial sectorization must therefore contribute to several objectives:
Commercial sectorization criteria can vary depending on the company's activity, but often include factors such as :
Companies selling in the BtoB market use economic characteristics related to companies:
On the other hand, reaching a finer level of granularity generally requires the creation of segments, such as :
Commercial sectorization and commercial (or marketing) segmentation are therefore two distinct but closely related concepts:
Commercial sectorization is never set in stone. Numerous events will justify its revision, starting with the evolution of the sales strategy itself. New objectives usually lead to changes in the field. The evolution of the sales force in turn leads to inevitable and often beneficial changes. In fact, this is one of the reasons why sector managers in the retail sector generally evolve quite rapidly.
However, in other industries it's common for traveling salespeople to burn out on their sector after a while. They may need new challenges, or have reached the end of the road with some prospects they never managed to convince. The reorganization of sales areas can therefore provide a welcome breath of fresh air not only for salespeople, but also for prospects themselves, who don't always have the ideal feeling for the salesperson assigned to them.
⚠️ The reverse is also very common: some contracts are intimately linked to the relationship between salesperson and customer. Be careful to assess the impact of zone changes!
Dividing up a territory into fair trade sales potentials can be problematic for companies. The most frequent difficulties are as follows.
- Geographical scope: the variable size of sectors can be a thorny problem: a geographical area that's too small can frustrate a traveling salesperson, who will quickly feel that he or she has covered all the interesting targets in his or her territory. On the other hand, giving a salesperson a sector that's "too" large is the best way to ensure that he or she is spread too thin on a daily basis. Worse still, a very large pool may reduce the value of prospects in their eyes. So you need to limit the number of targets so that your sales reps realize that the pool is not infinite, and that no sale should be taken lightly.
- Data and criteria taken into account: effective segmentation often relies on accurate, up-to-date data, and many companies have insufficient commercial databases. Determining sectorization criteria is also a complex issue. You may need to score or weight your criteria in order to prioritize them.
- Consistency of sales action: it's also advisable to place the right cursor between the global strategy that applies to everyone, and the personalization that enables tactics to be adapted locally.
- Collaboration: defining an optimal sales area often involves close coordination between different company departments, such as marketing, sales and operations management.
Organizing prospects or customers into distinct target groups takes on a special dimension when selling to companies (Business To Business).
In fact, in addition to income disparities, there's the fundamental criterion of decision-making. For example, if you're targeting mid-sized companies, almost 40% of head offices are located in the Ile-De-France region! The Auvergne Rhône-Alpes region comes second (13%).
Moreover, while only 287 companies were considered large enterprises in 2015, their workforce represented almost 4 million people, a workforce larger than that of micro-enterprises!
For all these reasons, companies generally avoid dividing up their territories along the lines of 1 sales rep = 1 département. Structural disparities lead most companies to divide territories according to their respective sales potential.
However, the size and type of companies targeted have an impact on the sales cycle. It generally takes longer to sell a framework agreement to a group than to validate a purchase from an independent customer.
For example, the world of supermarkets is divided into two categories of players: integrated and independent. The former apply group policy, while the latter enjoy relative autonomy in their choice of suppliers.
In other words, if you want to sell your products to integrated retailers such as Carrefour or Auchan, you'll have to negotiate with central purchasing agencies, whereas if you want to sell your products to independent retailers such as Intermarché or Leclerc, you'll have to convince the managers of each outlet directly, even if your products are included in the retailer's assortment.
Depending on your target market and its territorial coverage, you will need to recruit different profiles:
Is your brand looking to expand its distribution network? Here are the 10 keys you need to take into account to achieve the best possible commercial sectorization:
Sales objectives are used to decide how to canvass a territory: a brand that wants to improve its market share in a particular brand and another that wants to increase its share of ownership will organize their canvassing in completely different ways, and their sales areas will reflect their sales and marketing strategy.
For a national brand, the use of panel data is often unavoidable. These players provide an in-depth analysis of market trends and competition, as well as buying habits, geographical location, store size, specific distribution channels, etc.
Define the priority network(s), integrated or independent: the organization of sales resources and prospecting will differ according to whether decision-making is centralized (central purchasing agencies and chains) or partially delegated (independents). These different strategies can also have an impact on sales recruitment.
Use a CRM that integrates structural data such as the notion of decision (head office, establishment, etc.) and group or brand ramification, etc. Your sector managers need to be aware of the importance of filling in the CRM: data is at the heart of sales sectorization.
This CRM must also include a sales route planner: the graphic representation of geographical sectors can be misleading, and your sales reps don't move around as the crow flies! Here, it's the technology that will optimize the cost per trip or the ratio of sales to prospecting costs.
Know how to assess the importance of geographical sectors according to the performance of the companies located there. Two strategic indicators are available to help you assess the quality of your network across territories: DN and DV.
This group of sales outlets, crucial to your brand's development, can be the focus of particular sales intensity (frequency of visits, stacking of targets, etc.).
Good customer scoring enables you to assess the importance of each customer account in your sales strategy. In this way, certain accounts can be visited less frequently, and sometimes a telephone point may suffice to validate orders. But be careful not to leave the field to your competitors. Even if visits are spaced out, they should allow you to take stock of the situation (shelf space, number of facings, merchandising, competition, etc.).
Include the logistics dimension in your sectorization: a national brand can be faced with costs and delivery times that vary greatly depending on the location of its sales outlets. It is important to adapt your sectorization to preserve margins, but also to guarantee the proper execution of distribution contracts. For developing companies wishing to avoid overstretching their resources, it's important to consider partnerships: have you thought about shop-in-shop to gain representation at lower cost in certain sectors? What about a back-up sales force to help you grow while limiting your financial commitment?
Set up key performance indicators (KPIs) to evaluate the effectiveness of your commercial sectorization. Monitor results regularly, gather feedback from distributors and consumers, and adjust your strategy accordingly.
Sales volume always reflects the level of motivation of your field sales staff. And they attach a great deal of importance to the notion of merit and managerial fairness. So it's extremely important to explain why and how you've decided to divide up the target groups. This exceptional communication deserves at least one group meeting - or even an event if it involves a major change in the life of the company - but also in some cases individual interviews. Here's a case study to illustrate the principle.
💡 Sectorization and sales motivation
Let's take an example that shows the importance of the link between commercial sectorization and motivation.
Fabien, a salesman in the 92 region, has accompanied the growth of your brand since its launch six years ago. He has never hidden his goal of being entrusted with key accounts in the Ile-De-France region, but for fear of demotivating him, you have never really taken a stand on the issue.
But this year, your development objectives are clear, and you've decided to recruit a regional manager to take charge of key accounts in the Ile-De-France region. This situation is a time bomb. To defuse it, you're going to have to find a way of communicating with Fabien so that his motivation doesn't suffer: what's on the horizon for him?
To begin with, you stop avoiding the conversation, and make it clear to Fabien that his profile is not suitable for key account management. On the other hand, as Fabien has performed very well in his sector, you decide to entrust him with the medium-sized accounts, and also ratify an exceptional bonus on his annual target.
In the end, you make Fabien understand the value he has in the organization, and give him a tailor-made role aligned with the company's objectives. Finally, a Fabien who feels valued will sell a lot more!
It's a win-win situation!
Do you want to boost the profitability of sector managers? Discover CRM for retail brands.
