The question above was presented to a group of sales management professionals on a group at Linked In. Many people said it depnds on the products and how similar they are. That’s an important consideration, but the product is only one small part of the overall consideration. Here are three more critical factors to consider: A) Do the products require interactions with different roles on the customer side? B) How frequently will any new skills be used with a new product? and C) Do the realtionships that matter overlap and are they truly leveragable or not?
The answers to these questions will tend to suggest either segmentation, additional sales team roles, or consolidation. For example, these questions often come up when a new product is added to the rep’s bag. If the product is very similar to other products in terms of how the customer buys it and who is involved, there is little indication for segmentation. On the other hand, if the product is different enough that a new player is involved in the purchase decision–say IT, or a CFO, or a Change Management expert–and the reps are not used to dealing with that person, a segmentation or sales specialist strategy is often considered.
I would also consider frequency of use of any new skills, because that will affect mastery and the potential effectiveness of the rep in selling the product being considered for segmentation. You probably don’t want an ineffective rep carrying any product, and if the potential sales opportunities are few but large, reps can have a hard time getting to the mastery they need.
Finally, if relationships that reps have are not leveragable and common to the sale of two products or product lines, there is frequently little reason not to segment. Some companies have 6, 8, or even 10 people calling on the same individual in the customer organization, and that’s a recipe for customer anger. This is segmentation having gone astray the wrong way.
Hope that helps. I’d appreciate any thoughts and fedback if it does.