Territory misalignment is one of the leading causes for missing your number. As the Sales Operations leader, your mission is to improve the efficiency of the sales team. Within that charter, along with a lot of other responsibilities, comes territory design. Proper territory design balances customer requirements, company revenue expectations, and sales rep workload to grow revenues.
Is your top rep that much better than everyone else, or is he benefiting from a ripe territory?
Download the Territory Design Approach tool to help you structure your approach.
Then, ask yourself these three questions that world class companies are asking to uncover the answer:
1. Can a salesperson make his or her quota just by calling on the “easy” accounts?
A territory ripe with “easy” accounts may mask the true abilities of your sales rep. Is a mediocre sales rep making their number based solely on low-hanging fruit? Is an “A” player managing a territory loaded with accounts that are difficult to penetrate, causing her to miss her number? Proper territory alignment eliminates the guesswork and ensures you can objectively measure the talent of your sales team.
2. Do I understand the revenue potential in each account and for each sales territory?
Understanding the revenue potential in an account is imperative to correctly sizing territories. A territory rich with high potential accounts makes the sales rep’s job too easy and overstates his abilities as a sales person. Getting this right involves the creation of an “Ideal Customer Profile” (ICP). This exercise involves determining the current spend of existing customers and stack ranking them to create a hierarchy.
From there, leverage firmographic information to determine the characteristics of your ideal customer. Performing regression analysis helps determine the revenue potential of each account. Once you have this information, you can begin to assess the current territory alignment. You’ll be amazed at how misaligned the territories are.
3. Are territories not realigned dynamically due to poor data and the perceived complexity of the process?
Leaving territories static is a common practice among companies that fail to grow at the same pace as their industry. The companies that grow faster than their industry constantly monitor sales performance versus potential within the territories. Understanding and measuring this performance, allows them to act swiftly in under-performing territories.
Quality data is crucial to developing this capability. Your CRM data informs pipeline stage, velocity of projects, and a whole host of other valuable information. Mining and understanding this data on a regular basis drives deeper understanding of territory profiles.
Once you have that level of insight into your territories, realignment should be straightforward. And don’t worry about upsetting the customer. Account changes are only necessary in accounts that aren’t performing to expectations. The customer will be happy with the new focus and attention on their account.
These are just three of more than 20 questions covering territory design in our How to Make Your Number 2018 Workbook.
As the Sales Ops leader, you get assigned a lot of the work no one else wants. You’re often underfunded and understaffed. However, you have the most strategic sales function in the company. Redesigning your territories will unleash the revenue potential of your company and showcase your merit as a strategic partner. Do you have what it takes?
Leverage the Territory Design Approach tool to help you structure your approach.