By Clinton Gott, Principal

Our clients often pose this question, implying that there is a magic answer or all-encompassing industry benchmark that can accurately evaluate whether their salespeople should cover more, less, or the same number of accounts. The studies that do exist can provide directional information, but unfortunately, they do not provide much of a meaningful answer for the unique products, coverage opportunities, and coverage needs of a particular sales organization, not to mention the many sales roles that often exist within a sales force. Fortunately, the answer can be generated by following a logical process approach with informed assumptions along the way. The key is combining the coverage needs of your accounts with the available coverage realities of your sales force.

Account Coverage Needs. Not all accounts are created equally, in terms of the time and attention required to optimally sell to them. You should first segment your accounts along logical parameters, such as account size, vertical market, and sales strategy (retention, penetration, or acquisition). The cataloging exercise can be informed with data (current revenue, degree of penetration, total account potential) along with expertise from your sales organization, typically the sales leaders on down to the frontline managers. What’s the intensity of the sales effort required? How much time must a sales representative spend on a typical account in an average week? While the answers may not be completely scientifically rigorous, this exercise addresses the right types of questions and reframes the way companies cover accounts and assign representatives. The question moves from “how much revenue should a salesperson deliver” to “how much can a salesperson deliver, based on the realities of the time required to cover one’s accounts”. The ultimate goal is to ensure each account is given the most optimal amount of coverage that drives the most meaningful results, while ensuring we can supply this coverage in the most cost-effective way possible. For example, if a field salesperson can only cover four accounts, and the revenue or future sales that result are insufficient to fund that salesperson or the margins we require, then those accounts may be better served by a lower-cost inside salesperson. The answer to the right number of accounts begins with an understanding of how much time and attention accounts from various segments require, thus providing the demand side of the coverage equation.

Salesperson Coverage Supply. We next need to understand how much sales time one of our sales representatives has to cover accounts. This is where some of the highest variances may exist from one company to another – the amount of quality sales time available. In some organizations, non-sales time such as administrative time, managing internal politics or battles, or simply excessive travel can minimize the amount of time a salesperson has to provide the coverage hours identified for the targeted accounts. A salesperson with 70% of time available to sell (usually considered an industry best practice) compared to one with only 30% of time to sell (a very low percentage indicative of challenging internal demands or poor role design) face very different coverage realities and opportunities. Studying, or even just considering, the amount of time your sellers have to actually sell can be an extremely valuable exercise, and the answer provides the supply side of the mathematical construct that address the number of accounts a salesperson can cover.

Matching Supply and Demand. With estimates now of the time required to cover accounts along with the available time to do so, you can do the simple mathematical exercise that takes a first pass at how many accounts a salesperson can cover. See the example below:

Estimated time required to cover various accounts:
o   Large Tier – 750 hours per year
o   Medium Tier – 250 hours per year
o   Small Tier – 30 hours per year

Available sales time for an Account Manager: 75% selling time x 2,000 hours available (work year minus two weeks of time off) = 1,500 hours

Potential coverage examples:
o   2 Large accounts
o   6 Medium accounts
o   50 Small accounts

While this is a simple example, this type of analysis frames the coverage conversation in a better light, i.e., the workload required to best cover accounts and drive results. End of day, the estimations may need refinement and salesperson deployment does not need to treat this information as if infallible, but this provides an excellent starting point and a realistic view on how to think about account coverage.

Current Client Example. The client who most recently asked this question is in a business-to-business financial services field. Their account assignments are diverse and seem to lack a level of rigor around what a salesperson can truly accomplish. In the top tier, they have delineated very clear concepts focusing salespeople on approximately one to four accounts. These numbers derive though from the sum of the current revenue generated by the accounts, i.e., “a large account salesperson needs to deliver X amount of revenue”. This fails to address what revenue could result with the right amount of focus rather than bundling the number of accounts to generate some level of expected revenue. The coverage approach for the medium-sized accounts is even more extreme, with salespeople owning anywhere from 5 to 100 accounts, also assembled to ensure the revenue sum is “enough” to warrant that salesperson’s existence. Clearly, the current model lacks a level of refinement and should be readdressed.

When discussing account coverage with the 100-account assigned representatives, careful interviewing identified that they really only focus on 20 or so accounts. That means 80 medium sized accounts are sitting relatively idle. Yet this same organization has an aggressive, talented, and driven inside sales team covering the small accounts. Why not move the 80 untouched medium accounts into the inside sales team’s patch, thus making them the crown jewels of that organization? Well, that is exactly what this exercise led them to do. Through understanding required and available workload, we created the logical business case to break with current convention, rethink ther coverage and assignment strategy, and provide the right amount of time and attention to all of the key accounts.

Some consulting firms or survey-focused organizations claim to offer the market-based information on the right number of accounts to cover. In reality, this is more of an internally-focused exercise that requires both quantitative data and qualitative sales management expertise to answer. This effort will not only provide a more accurate answer but also helps organizations move to a more enlightened approach for considering coverage based on workload demand and supply.