Designing sales territories is not easy. Redesigning them should be done at least every other year to optimize account potential spend and the reps servicing each account. SBI has outlined six steps to effectively design sales territories to be the most effective possible.

Sales Operations leaders should redesign sales territories to reflect the changing landscape, optimize spend potential in each account, and harness untapped sales rep capability. Doing this answers the following questions:


  • How is your current sales territory plan performing?
  • When was the last time you had it redesigned?
  • You redefine your company goals and objectives at least once a year, so why should your territory plan be an exception?


It should be able to keep up with the changes and demand of the marketplace. SBI’s Territory Alignment Tool can help map and track your various sales territories, and evaluate your territory’s criteria and financial goals.


Download the tool here.


An optimized sales territory can result in more than just revenue growth; it can contribute to improved customer coverage as well as improved retention of your top sales talent. This article outlines some of the most common errors made when redesigning territories.


When it’s time to redesign sales territories, follow these six steps to help you optimize your territory opportunities.


Step 1 – Baseline Existing Territory Performance


Start your territory redesign by taking inventory of what actions you currently have in place. By evaluating the current performance in your territories, you will be able to better adjust in your new plan.


  • Prior Revenue Performance- How has this territory performed overall in the past? Is its performance sustainable, or does it need to be redesigned?
  • Product/Service Revenue Mix- How profitable are the sales in the current territory? Are you reaching the maximum profit in your areas? Or will augmenting the territory plan improve revenue?
  • Current Pipeline Opportunities- The current territory plan needs to be equipped with new opportunities and the ability to provide new lead generation.
  • Sales Rep Talent- Ensure your team has the capabilities and capacities to service the accounts.


Step 2 –Analyze Existing Customer Spend


By segmenting your accounts, you can identify how your customers are buying, and territories can be determined from this behavior. Are they buying based on geography, seasonality factor, or industry? Is it based on revenue or employee size? Or are they buying based on a culmination of these factors? Determine their spending habits and segment them based on this information. The more you know about your buyers, the more you will understand which drivers contribute to sales and your firms ICP can be identified. Determine the factors by using historical customer spend to find correlations in spending.


Step 3 – Determine Market Potential



Once you understand the factors contributing to customer spend, it is crucial to forecast the market potential.  By determining the accounts spending habits and evaluating the current state of your territories, you should have enough information to estimate your total market size. Next, determine overall spend potential for each prospect and customer. To aid in your forecasting, here are four best practices for predictable pipeline management.


Step 4 – Map Prospects & Customer Data to Territories


Up until now, your process has been rooted in data analysis. Using the information gathered above, find the balance among prospects, existing customers, and qualified opportunities.


Map your design with the following approaches:

  • Focused Account Consolidation (Customer Driven)- Distribute accounts/prospects throughout your territories based on how you can balance revenue. How much attention does each customer need? If you fill your region with too many high priority accounts, you will likely lose them trying to accommodate the needs of each one. Conversely, if you decide to fill your territories with accounts that demand less, they are less likely to become key revenue drivers and potentially lose interest.
  • Workload Leveling (Activity Driven)- Does the market potential indicate there is a balance across customers and prospects? All of your territories should look similar to assign reps based on convenience. Adjust accordingly from there based on demand in the area and rep performance.
  • Territory Compression (Cost Driven)- Are your territories designed to optimize revenue growth? The goal when creating territory plans is to maximize profit and productivity while minimizing your cost of sales. Determine where your reps will be best suited in different areas of opportunity.


Step 5 – Produce Territories



In creating your first draft of territory design, you were able to determine your motives behind each territory. Use this step as an opportunity to perform quality assessments in developing your ideal sales territories. Compare them to different scenarios of each area and account to consider implications for your final version. Consider the following when balancing your territories:


  • Number of existing customers
  • Number of prospects
  • Total market potential
  • Total workload
  • Number of existing opportunities
  • Value of existing opportunities
  • Rep potential


Step 6 – Review and Refine Territory Assignments


When finalizing your proposed territories, create goals for not just the area, but also the reps who are managing them. Are the accounts able to be serviced sufficiently? Are the reps ready to hit their targets? Optimize your boundaries to ensure that everyone is on the winning team. How will your reps acclimate to their new territory? Involve a variety of roles from your Marketing and Sales team to ensure the success of your new territories.


  • Sales Ops- Analyze data in territories for reps to further develop their accounts and prospects.
  • Sales rep- Customize the plan based on client knowledge and intimacy.
  • Sales Managers- Oversee and review territory plans and coach reps on performance. Coordinate the necessary resources to achieve goals.
  • Marketing- Develop programs that contribute to demand and lead generation within the territory.


Use our Territory Alignment Tool to get started reviewing your current areas and track various data such as employees assigned and your sales plan.


Download the tool here.


You can also check out other ways to further enable your sales team by downloading SBI’s 2020 How to Make Your Number Workbook or explore our Sales Strategy insights. Contact us to get in touch with an expert that can help you create a world-class model that leads to optimal territories.