The Territory Design process to this point has been heavy in data analysis. Now it’s time to take all that information to begin driving actionable decisions through the creation of initial territory drafts. A Territory Optimization software tool isn’t required to complete this step, but having one will greatly improve the quality and speed of your decisions. There are many tools available including those from Mapping Analytics, TerrAlign, TTG, etc.
To begin you need to revisit the overall goal for your territory design and rationalize it against the insights you can gain from studying the market potential data. Determine which approach is right one to prioritize your focus around.
Focused Account Consolidation (Customer driven)
Does Market Potential indicate that certain customers/prospects or customer/prospect segments represent a significant portion of the potential?
If so, you should carve up territories ensuring the highest value customers/prospects receive appropriate attention. If you dilute territories with low potential customers/prospects, they will likely be ignored. Likewise, if you stack territories with too many high potential customers/prospects, each will likely not get the attention it deserves to drive share of wallet increases.
Begin your work by deciding which customers/prospects to pursue and which ones you are consciously not going after. Then take the customers/prospects you are going to pursue and bucket them by the most important dimensions – named accounts, industry, geography, etc. Using your tool of choice, look to balance revenue, opportunity and workload within those dimensions. Lastly, align your best reps with the best territories to ensure you set yourself up for success.
Workload Leveling (Activity driven)
Does Market Potential indicate that there is significant balance across customers/prospects?
If so, you should carve up territories to optimize balance across each to improve overall revenue per head, quota attainment and consistent market share growth.
This approach requires running many what if scenarios to seek optimal balance of revenue, opportunity and workload. A territory optimization tool will make this job much easier. You want all your territories to look similar so you can assign reps based on convenience. If you have reps of different skill/performance level you may want to purposely create some imbalance (no more than 20%) in the territories to align past rep performance with opportunity potential.
Territory Compression (Cost driven)
Does Market Potential indicate high concentrations of opportunity around small geographical areas?
If so, you should carve up territories around major pockets of opportunity deploying generalist reps that minimize headcount and travel costs to maximize selling time and reduce your cost of sales.
Begin by using your tool of choice to rank zip codes, metro areas or states in terms of revenue, opportunity and workload. Then consciously decide which geographies you are going to pursue and which ones you are going to either ignore or pursue through some another strategy – channel partner, inside sales, self-service, etc. Lastly consider sub divide your zip codes, metro areas or states to create territories that are both reasonably balanced and as concentrated in terms of opportunity as possible.
All the approaches above require multiple iterations as you create the initial cuts. Do not be discouraged if the initial attempts are difficult to balance all the variables. Through tuning and optimization the right decisions on territory boundaries will become clear.