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Make a New Year’s resolution to build territories that are market-centric in 2013.  Doing so will help the sales team make their target and increase your value.  It will also remove many of the excuses reps give for missing their number.  This will make life easier for you and your sales VP’s.  


Today’s post explores designing sales territories based on your customers and prospects.  Who they are, where they are located and how they want to be served.  For a step-by-step guide on how to do this,   


How Market Focused Are Your Territories?

When was the last time you re-designed your territories?  More importantly, did you design your territories based on your customers and prospects?  Did you take into consideration the total potential for each customer location?  Do you really know what they want and how they want it?


All of your efforts in territory design have to begin with your customers and prospects.


  • Customer / Prospect Segmentation – This detailed analysis of your marketplace is essential.  Roll your sleeves up and determine where your customers are located.  How much they are each worth and what is their potential revenue?  What are their characteristics (industry, size, employees, location type, product mix, etc.)?  Where are the prospects that look most like your Ideal Customer?  If this hasn’t been done recently, get with Marketing and get it done.
  • Heat Mapping – Map out your customers and prospects based on their potential value to your company.  Overlay this with your current territory structure.
  • Customer Call-Cycles – Do you know how your customers want to be served?  How often should they be visited?  How does this differ based on customer or prospect value?  If you don’t know how your customers want to be served, you need to.  Design a plan to capture this information from your customers and get it done.
  • Capacity Planning – What can your reps accomplish?  How many calls / visits can they make?  You’ll need to understand where they spend their time now and how to optimize it.  Sales Time Studies are essential in capacity planning.


Let the Market Decide

Once you’ve done the above analysis, you can begin to build optimized territories.  The result of this may be a need for more reps.  Conversely, you may find out that you have too many reps.  The point is you need good data about your customers and prospects to do this right.


At this point, you may be asking yourself “How will I ever find the time to do this?”  Or, you’re  wondering,  “if I do this, will it really pay off?”


The bottom line – it needs to be done or else the sales team is misaligned.  Resource allocation needs to be done with science.  It has to be based on where your market opportunity is.  It needs to include how they want to be served. 


There are many firms that can do this for you – very likely quicker than you can yourself.  If you’re resource strapped, determine who has the experience and ability to execute.


Additional Benefits

There’s at least one significant additional benefit to getting this done sooner rather than later.  Having well designed territories removes excuses from the reps.  It builds credibility with sales management.


Recently, I had the opportunity to spend some time with a Sales Ops leader.  The company has more than 100 field reps and $1.2 billion in revenue.  They are a B2B services firm.  We talked about his priorities for 2013.  He confessed that he already felt he’d never get all of it done.


“Look”, he said, “I’m going to be lucky if I can get my top two priorities done in the first half of the year, much less the other five.”  I thought for a moment and asked “What’s taking most of your time away from getting your priorities done?” 


He confided it was noise from the field.  After we talked about it, I realized the noise was due mostly to them feeling they weren’t getting enough support.  Support in helping them reach their number.  Support in understanding who’s pipeline that is real or not.


I told him that redesigning territories that were focused on the market was a great first step. Here’s why:


  • Territories based on customer and prospect opportunity levels the playing field for reps.
  • It focuses management on things they can manage to.  If there’s proof of a territory’s opportunity, a bad rep can’t hide anymore.
  • It gives the best reps a chance to flourish in a territory with plenty of Up-Sell/Cross-Sell and new prospect value
  • It supports sales managements desire to cleanly identify the great from the good and the poor.
  • It removes much of the “noise” that poorly performing reps make.  Their bad performance can’t be justified by a “bad” territory.