Until recently, sectorization meant defining sectors with markers and pushpins on a map hung on a wall. And that’s hardly a caricature!
The work of sales force sectorization, that of creating sectors for sales staff, was very often done empirically, with a bit of common sense and a lot of shared experience. We tried as best we could to find metrics to estimate costs and measure the effectiveness of the sales force.
This exercise was more like an ordeal that sales management had to go through in order to set objectives for the sales force.
As a result, sectorization was updated every 3 years or so. The organization remained fixed and deteriorated over time, in line with the ups and downs of sales force life: relocation of resources, turnover, customer clashes, etc. The sales organization therefore lost effectiveness over time.
As the exercise was not a simple one, and in the interests of simplification, we used departments as a basis for division, in France, or zip codes, in the United States for example. And some organizations still do! If you look at job offers for travelling sales representatives or B2B sales representatives, you’ll often see “sector covering departments 62, 80 and 59”.
Assigning accounts to a sales rep was essential, so sectorization was a process that had to be undergone, a constraint, but a necessary step. We didn’t have the indicators to ensure that the division was effective. Impossible to anticipate, impossible to optimize, the only way to know whether it was effective or not was to put it into operation.
The arrival of mapping software
The 2000s marked a turning point with the arrival of GIS (Geographic Information System) mapping software. A modernization of territorial division was born.
Visualizing sectorization interactively, on a digital map, is far more meaningful than a static map on a wall, or simply raw data in an Excel spreadsheet.
These programs are also capable of displaying data on a map, and can therefore propose specific analysis themes, such as the visualization of the number of customers or sales per sales rep, which facilitates decision-making. These indicators can also be used to balance sectors with an equivalent number of accounts or sales.
A view of the road network, natural boundaries such as rivers or other geographical features, also helps to understand and improve the construction of sectors. The aim is to optimize the efficiency of the sales organization, but also to facilitate communication and the application of the new sectorization.
The analysis is therefore more interesting, the map helps to highlight inconsistencies and facilitates decision-making, but most of the time the data is aggregated by department, sometimes even by commune, and very rarely by customer/prospect.
We’re still in the era of a sales organization defined by sectorization based on administrative units, and therefore not very optimized. And GIS software is a powerful tool, but highly technical, and ill-suited to business use.
Sectoralization is therefore often carried out through a service contract, the budget for which fluctuates according to needs and different analysis requests. As a result, budgets are difficult to control, and the process is still undergone.
“Today, the challenges of sectorization are both business and human”.
Laurent Ngin, co-founder Datakiss
Sectorization nowadays
Sales sectorization is part of sales efficiency, and in this field several types of solutions have been developed and adopted:
- Data or Sales Intelligence helps improve sales prospecting and targeting, thus saving time and boosting productivity.
- Sales Performance Management solutions can be used to define objectives and establish commission and bonus plans.
- CRM solutions have become increasingly popular in recent years, offering efficient management of sales opportunities.
- Sales route optimization solutions enable sales reps to be more present at customer sites.
When it comes to sectoring, however, needs have evolved faster than mapping software since the 2000s.
Today, the challenges of sectorization are both business and human, and are mainly on two levels:
- Defining fair objectives
In other words, objectives that are comparable between different sectors. Today, the answer to this challenge lies in an equivalent distribution of sales or the number of customers/prospects to be visited. Today’s software programs can be used to create sectors based on a distribution of customers or sales, but is this really an equitable distribution? Does a sales rep who lives in a rural area have the same chance of visiting all his accounts as a sales rep who lives in an urban area?
- In the construction of achievable sectors
In other words, that the objectives set in terms of frequency and visit times, including the time it takes to get to the customer’s premises, are achievable. But what exactly do we mean by workload? What does the term mean, and what does it really include?
Dynamic sectorization
For an itinerant sales force, setting SMARTE objectives necessarily involves setting up a sectorization system that maximizes the time spent by sales reps with their customers, while respecting their workload.
We must be careful with the term “workload”, as it is often overused and does not reflect its original meaning. Today, it often boils down to taking into account only face-to-face time, i.e. time spent with the customer, and does not take into account road time, since few, if any, means of modeling it exist.
A rough estimate of road time is often added to the salesperson’s actual field time. This model has its limits, and the imprecision of the measurement is too great for reliable analysis and confident decision-making.
As you can see, the logical evolution of sectorization is to provide a precise vision of the sales organization in place. Commercial sectorization becomes a real performance lever, with objectives set at SMARTE and the sectorization process becoming fun, fast and efficient.
Precision is the cornerstone of sectorization, generating reliable key indicators and facilitating decision-making. The real workload of sales staff is now precise and individualized. All decisions concerning the life of a sales force are now justified by a gain in sales and/or a reduction in costs, and management benefits just as much.
Workload makes processes transparent, and facilitates sales force buy-in, because objectives and the method used to set them are understood by all. It makes sectorization dynamic, agile and capable of adapting to changes in an organization and its market.
Conclusion
The sales force budget is one of the most important expense items in an organization, and is closely watched by top management. With technological progress, solutions have been created to improve the efficiency of a sales force, to increase the productivity of teams and therefore the profitability of an organization.
Sectorization is an important process, both in business and human terms. It’s a process that has existed for many years, but has never been exploited as a real asset in the creation and management of a sales force. We have brought together our 25+ years of cumulative experience to breathe new life into this essential process, enabling organizations to project, simulate and anticipate. Our ultimate aim is to make your investments efficient, profitable and sustainable over time.