Realigning Territories

A client asks "In my business, there is one salesperson that's been with the company for years. They have a very large sales territory and call on the biggest accounts within it. To grow my business, I need to hire several more salespeople. This will mean giving at least one of them a part of this person's territory and a few of the good accounts that go with it. My fear is that if I make any changes to their territory my salesperson will quit and all of their account knowledge will go with them, or they will go to work for a competitor and convince some of the accounts to follow them to the new company. In either case, if they do leave and the new salespeople don't work out, my business will suffer.

When faced with this dilemma, most business owners that I work with picture a full scale disaster. Though I understand that it's scary to shake up the status quo, when I try and convince them that the worst case scenario usually doesn't occur, they are skeptical. In this issue of my e-newsletter I will make recommendations for discussing the upcoming territory changes with your current sales representative. In the November issue I will talk about working with them to bring those changes about. 

There are some steps that all managers in this situation can take to retain the original sales representative while adding to the sales staff.

Talk to peers 

Many small business owners have faced this situation. Have lunch with a few and ask them about it. Did they hire additional salespeople? How did that work out? Did the original salesperson quit? What were the ramifications? Would they do it again? What would they do differently? What does their current sales staff look like now? Is the first sales representative still there? The answers may vary greatly from owner to owner, but I guarantee you will come away with some good advice and a much more balanced picture of what you may or may not be facing.

Do your homework 

Make certain that you know enough about the territory to comfortably state that there is enough potential business there for an additional sales representative or two. Come to the initial meeting with solid data on the number of businesses in the area and territory coverage recommendations. If the current salesperson is generating $1 million in the territory, they should be solidly convinced that a second salesperson can bring it to twice that.

Have a business meeting 

Your main goal here is to grow your business, not take anything away from your salesperson, and it's important not to lose sight of that. Meet with them and discuss your ideas for growth. Take the time to talk about the big picture; don't focus exclusively on the need to hire another salesperson or two. Let them draw a few of their own conclusions about the need to increase the sales force.

Ask questions 

After discussing the situation for a while be straightforward and say to them, "In order to realize the growth rate I'm looking for, I may need to hire another salesperson or two. What are your thoughts on that?" If they are initially negative about this idea, don't panic. They are worried about loss of income, loss of territory, and perhaps concerned about having to work a little harder. Let them expand on their thoughts a little bit. Ask questions.

Don't dodge the issue 

If they come out and say something like, "If you give the new person any part of my territory..." or "If any of my major accounts are taken away..." or "If I don't have total say-so over how everything is divided up..." "... I will quit," stay calm. Acknowledge that you know they can quit but that you value their talent and your business relationship. Stress that what you would really like to do is work as a team to figure out a plan for bringing additional salespeople on board. Would they be amenable to that? 

Now that you have told the salesperson about your plans to increase the sales staff and that you want them to remain with the company, you need to start incorporating them into the planning process. Next month I will talk about partnering with the salesperson to make this venture a successful one.

Are you in the position of having to downsize your sales staff? Is who to keep and who to let go a more difficult dilemma than you thought it would be? An overall staff sales evaluation can provide you with the kind of information you are looking for to make an informed and unbiased decision. Contact me if you need help.

Though my clients come from many different industries, the challenges they face are similar. In "Sales Management Tips," I regularly answer questions that have been posed to me by my clients. I hope the answers will help you to solve some of the sales dilemmas you face in your own sales organizations. If you would like to ask a question, please contact me. The identity and affiliation of those submitting questions will be kept confidential.