In the world of modern customer relationship management (CRM), how leads and accounts are routed plays a critical role in both customer satisfaction and sales performance. As organizations scale their sales operations, routing strategies become more sophisticated. Two commonly used approaches for CRM routing are assigning by territory and assigning by product line. Both methods have their merits and can dramatically influence a company’s ability to respond to customer needs, close deals faster, and ensure better resource allocation among teams.
Choosing the right CRM routing strategy requires a balanced consideration of company size, product complexity, team structure, customer demographics, and sales goals. This article explores the nuances of each routing method to help businesses make informed decisions that align with their specific operational model.
Contents
Assigning by Territory
Territory-based routing is a traditional approach trusted by a wide range of organizations, particularly those with large external sales forces or geographically diverse customer bases. In this model, sales representatives or customer success managers are assigned to handle leads and accounts within specific predefined territories. These territories can be determined based on geography (region, zip code, or country), industry, or business size.
Some advantages of using territory-based routing include:
- Local Expertise: Sales professionals become familiar with the market dynamics and customer behavior within their territory.
- Efficient Travel: For field sales teams, limiting their scope to a geographic area reduces travel time and costs.
- Relationship Building: Repeated interactions within a region allow reps to build deeper client relationships.
However, this approach is not without its limitations. High-performance sales reps might be locked to underperforming territories, limiting their potential. Additionally, territory imbalance can lead to inconsistent workloads across the sales force.
Assigning by Product Line
In contrast, product-line-based CRM routing assigns leads to representatives based on the company’s offerings. Each sales or support team specializes in a particular product or service, making them experts in the solution they represent. Companies that offer a diverse or complex range of products often use this model to ensure customers interact with knowledgeable representatives.
Advantages of product-line routing include:
- Deep Product Knowledge: Sales teams develop a high level of expertise, resulting in more informed and persuasive conversations with clients.
- Improved Conversion Rates: Knowledgeable reps can better align product features with customer pain points.
- Faster Onboarding: New hires can focus on mastering one product line instead of spreading their efforts across several offerings.
Despite its benefits, this approach may lead to fragmentation in customer experience, especially if a client is interested in multiple products from different lines. It can also introduce internal competition, as various reps chase a customer opportunity across product categories.
Choosing the Right Model for Your Business
Organizations must evaluate several key factors before choosing between territory or product-based routing. These include:
- Company Size and Structure: Larger organizations with a wide geographic footprint may find territory routing more efficient. In contrast, smaller firms or those with a deep portfolio might benefit from product-line specialization.
- Complexity of Products: When products require technical expertise to sell effectively, product-line routing ensures that salespeople are experts in their offerings.
- Customer Buying Behavior: If customers typically purchase multiple products together, a territory-based approach offers more consistency in experience. In more technical or niche markets, product expertise may be prioritized.
- Sales Cycle Length: Longer sales cycles might benefit from consistent, localized relationship management, which a territory model provides.
Best Practices for Implementing CRM Routing
Regardless of the chosen model, effective CRM routing implementation requires several best practices:
- Use Automation: Modern CRMs allow automation of rules that can route leads based on zip code, SIC code, product interest, and more. Automated workflows reduce lag time and human errors.
- Align Sales and Marketing: Ensure marketing teams understand routing rules to tailor campaigns and messages accordingly.
- Regularly Review Territories or Product Segments: Periodic audits ensure workloads are balanced, and opportunities are fairly distributed.
- Leverage Analytics: Analyze performance metrics to identify which routing strategy generates more revenue, improves lead response time, or shortens the sales cycle.
Hybrid Routing Models
Some organizations find that neither routing strategy alone fully supports their operational goals. In such cases, hybrid models are often employed. Hybrid routing combines elements of both territory and product-line assignment. For example, sales teams might be assigned a region but also specialize in a particular product within that territory. This allows companies to provide both in-depth expertise and consistent regional coverage.
Implementing a hybrid model, however, requires a more sophisticated CRM configuration and, often, a detailed routing matrix that determines which rep gets a lead based on multiple input criteria.
Conclusion
Deciding between territory-based routing and product-line routing isn’t a binary choice. It depends on a variety of business factors, including the company’s size, its offerings, customer behavior, and internal capabilities. By understanding the strengths and limitations of each approach, and possibly merging the two into a hybrid model, organizations can enhance customer experience, reduce response time, and improve sales team performance.
Ultimately, the effectiveness of any CRM routing strategy hinges on how well it aligns with a company’s strategic goals—and how precisely it’s executed through the CRM platform.
Frequently Asked Questions (FAQ)
- 1. What is CRM routing?
- CRM routing refers to the process of automatically assigning leads, contacts, or opportunities within a CRM system to the most appropriate sales or service representative based on predefined rules.
- 2. When should a company use territory-based routing?
- Territory-based routing is ideal for companies with geographically dispersed customers or field sales teams, where regional connections offer added value through localized knowledge and efficiencies.
- 3. What types of businesses benefit from product-line routing?
- Organizations with complex or numerous product offerings—especially in SaaS, manufacturing, or tech—often benefit from assigning specialists by product line to provide in-depth expertise and better customer advisory.
- 4. Can a business implement both routing strategies?
- Yes, a hybrid model allows a business to combine geographic and product specialization to maximize performance and customer satisfaction.
- 5. How does CRM routing impact team performance?
- Effective routing increases efficiency, ensures faster lead follow-up, improves customer experience, and optimally allocates internal resources—all leading to better overall team performance.
