Overpaying Underperformers

Situation: A manufacturer of Industrial Vacuums felt they were overpaying some sales people who were coasting. We evaluated the situation and determined they were really rewarding geographic territories and not their sales people. Those who had good territories made lots of commissions and those without, not so much.

Solution: In order to get a better handle on the sales territory potential we sourced external market data that showed how many of their “target customer” plants or facilities were in each of their industry verticals and where they were geographically. Matching some of these customer locations with existing paying customers we were able to establish the potential value of a sale into each different industry vertical.

Next we overlaid this information along with the target customer count by vertical in mapping software and were able to visualize the disparity between their current situation and the market potential. There were large sections of territories, coincidentally the furthest from the sales reps home base that appeared under served. We showed there was great potential but they had little to no sales in those geographies.

Armed with real figures on plant locations, and their specific industries we reorganized the sales territories into more equal sized potential and geographies and established new sales quotas in line with the market potential. In some cases territories that were handled by one individual were broken up into two and a new sales resource hired to pursue that potential business.

As we were working on territory realignment, we updated the sales process to reflect current market realities and integrated this into their existing sales force automation software. This included discontinuing time consuming activity reports and replacing them with a true pipeline forecast.

Results: A newly invigorated sales force focused on getting the most out of their respective sales territories. In addition, management had a strong grasp on what level of performance should be expected and demanded from each territory.

Next Steps: Updating compensation strategy to reward fairly and effectively across all territories.