Territorial Impact

Will the Internet have powerful effects on territory design? Undoubtedly, say Prabha Sinha and John Bienko of ZS Associates. Consider the following:

Distance does not matter to the Internet. Internet territories may be defined by customers’ buying needs, product or communication preferences, or by major accounts across all time zones.

Geography matters in hybrid selling – sales channels using on-site selling and the Internet. This will be most common for very complex sales, large accounts and for true partnering of the selling and buying firm over time.

Each major buying contract contained on a customized Website is a simple example of Internet territories. The buyer logs on and obtains product information at agreed pricing terms.

In pure Internet territories, equalizing revenue opportunities won’t determine territory size. Instead, seek similar workloads for each territory team with sufficient revenues to compensate them.

Where there’s a special Website built for each customer segment, and customers do all or most of the work, don’t worry about how many customers are in each segment.

The most difficult element to automate through the Web is customer service. However, even customer service standard inquiries can be automated by a good system. Cisco reportedly handles about 80 percent of B-to-B customer inquiries automatically.

Major buyers may organize the market by purchasing Websites. Sales territories become project based. For example, one team takes the first five sales opportunities. When they’re too busy, they turn new opportunities over to the next project team.

Where sales and support reps are not dedicated to accounts or territories, have databases on all customers that can be quickly tapped when needed.

Where the Internet sells pure commodity services, a separate Internet channel may be used with no commissions to regular reps. On the other hand, where the Internet supports complex-relationship selling, customers may still be assigned to territories. Reps get commissions from Internet sales, even if they did not participate directly in the transaction.

When making the transition to Internet-based territories, take care to minimize account defection and rep defection.