UC Berkeley Prof Wasim Azhar on Why Sales Force Segmentation is Important

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Lucep sales force segmentation

In this post, I’m going to share with you some data and ideas on the importance of sales force segmentation and the factors on which this segmentation usually occurs.

This from a market study report provided to us by a research team from the Haas School of Business, UC Berkeley, and Professor Wasim Azhar, a professor of marketing at same institution.

Before getting to the data in the report prepared for us by the IBD researchers, let’s just take a minute to look at the importance of sales force segmentation.

Why Sales Force Segmentation is Important

Lucep being a sales acceleration tool that enables instant response, we asked the team from UC Berkeley to interview sales leaders and managers on issues such as how they respond to leads, the relative importance of lead qualification vs fast response, etc.

One of the offshoots of the conversations was that we now have a better understanding of how sales organizations go about structuring their sales teams, and why.

To reduce lead qualification friction and competition, sales team structures are segmented and hierarchical as opposed to flat. Throughout the interview process, “return on effort” was a continuous theme from a time management, team morale and individual motivation standpoint. Simply stated, salespeople are best motivated when they can see a return on effort ­ where they can see a clear link between effort put into building the lead and reward received for closing the lead.

Any sense of competition within the team where effort may be fruitlessly spent prospecting the same lead as their colleague or any sense of unfairness where leads allocation does not correlate with effort is a team demoralizer. Therefore, most sales organizations create some sales team structure that defines clear sandboxes for each salesperson to own and develop. Based on our survey, the most prevalent form of sales team segmentation is by geography.

An interview with Professor Wasim Azhar shed some more light on these segmentation factors and sales force management principles.

“In the US, individuality is accepted more. There is also a greater culture of teamwork (especially in Silicon Valley). With the right culture, competition over leads should not be an issue.” – Prof. Wasim Azhar, Haas School of Business, UC Berkeley.

How to Do Sales Force Segmentation

In fact, as you can see in the chart above, we have survey data on the most prevalent forms of this segmentation – by geography, product expertise, customer size, and availability of sales representatives. Here’s what the report says on this.

By Zal Dastur

June 16th, 2017

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