Learn Territory Management Best Practices

Learning Objectives

After completing this module, you’ll be able to:

  • Divvy up territories based on company goals.
  • Use multiple criteria to balance territories.

Territory management is the bedrock of happy, high-performing teams. It dictates how teams are divided and who chases down which leads, and it helps shape everyone’s goals. But what dictates the territories? If you’re thinking aloud to yourself: “Who knows, they were like this when I got here,” that’s OK, we’ll pretend we didn’t hear you. But we won’t pretend there’s not a better way.

In this unit, you learn how you can use data to map effective territories that can give your company a leg up in reaching its go-to-market goals, all while motivating and retaining your reps.

Divvy Up Territories Based on Company Goals

Assigning each of your sales reps to a different section of the map is definitely the simplest way to create sales territories, but it’s not always the most effective. Instead, consider your company’s go-to-market strategy and overall business goals. What is top of mind for your company this year? How can that shape your business growth over the next 5 years?

Here are a few questions that help you understand your company’s go-to-market strategy and orient the territory-management process.

  • Are you trying to expand into a new market this year?
  • Has your product changed to suit customers in a new industry?
  • Have you found that the total addressable market (TAM) is larger in a certain industry than what you first anticipated?
  • Are you targeting a certain size of company this year?

If you’re bringing your product to Asia-Pacific this year, consider a sales team that covers APAC specifically. If you’ve discovered huge total addressable markets in the healthcare and manufacturing industries, those might merit teams of their own. Let your company goals drive where you invest with more salespeople and how you carve your territories.

Balance Your Territories

So you have your territories sketched out at a high level, driving toward your company’s most important goals. Now, you can decide which rep presides over which kingdom. (If this kind of power makes you feel like royalty, have another sip of tea and help yourself to one more crumpet.)

Use Multiple Factors to Divide Territories

There are a few readymade ways to divide territories, but relying on just one can create problems. For example:

  • You can give each rep a zip code. Great! But what if Seema has 59007 in a sparsely populated area of Montana, and Marisol has 94105 in the heart of San Francisco? Seema won’t have nearly as many accounts as Marisol.
  • You can give each rep the same number of accounts. Easy peasy! But what if Mark has 45 that are dead leads and only 5 viable prospects, and Ramon has 50 viable prospects? Mark is going to have a much harder time making quota.

You get the picture—using a single factor alone may not result in the equal territories you want. So, what do you do? Introduce more factors into your formula. Some you can consider are:

  • Number of companies
  • Geography
  • Size of companies (This can be number of employees or annual revenue)
  • Propensity to buy
  • Industry

Give Reps a Boost with Quotas

If you still can’t get your territories as equal as you want (and really, it won’t ever be 100% perfect), try shifting quotas to make things more equal.

A quota is an important way of measuring success, but it doesn’t need to be exactly the same for every rep. You have different sales reps at various levels of experience and skill. So take the larger territories, give them a higher quota, and assign them to your seasoned reps who are sure to relish the opportunity. Repeat for the smaller territories, with smaller quotas and newer reps who still need to cut their teeth. Now you have full coverage, and your reps are set up to make their quota—and motivated to stick around to repeat their success.

Why You Need Top-Notch Territory Management

Raise your hand if you’re still wondering: “Can’t I just give all my reps the same number of square miles and be on my merry way?” (Now put your hand down because we can’t actually see you!) Yes, you can just overlay a grid on the map and call it a day. But consider this: Investing a little more effort and thought into managing your territories can pay off majorly down the road.

Salesforce’s Adam Gilberd, SVP of Commercial Sales, outlines why it’s worth spending the time:

“Why use data to ensure that every AE has an equal shot at quota attainment? First of all, it allows us to retain more reps. We have lower AE attrition when more people are making their number or are close. It’s very, very costly to replace a rep who’s been trained, amounting to anywhere from a half million to a million dollars in some cases. The second reason is that when you have balanced productivity across all of your AEs—so they're all producing similar amounts—it's just a healthier business. You have fewer fires to worry about putting out, and you have fewer hot spots you have to manage.”

(You can read the rest of Adam’s article on Quotable.)

By creating truly balanced territories, you mobilize your entire sales team toward your company’s goals. You balance the load from manager to manager, containing the risk of failure. And perhaps most importantly, you give every rep a shot at success. Are you already starting to get that warm and fuzzy feeling just thinking about helping your reps succeed?

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