Your CRM is transactional – it’s not a planning tool. While the CRM is the foundation for sales operations, it was never meant to help sales leadership formulate a dynamic Go-to-Market (GTM) Plan. Planning for a future year starts in fiscal Q3 of the prior year. Job #1 is architecting territories.
If you lead a sales organization, you likely started out “carrying a bag.” You may think it best to create territory assignments the same way your mentors did “back in the day.” The problem is that those methods are outdated now that sophisticated tools have transformed SalesOps and RevOps. Territory management in today’s competitive and uncertain market has to be more efficient, optimized and dynamic. There are two phases to territory management. The first is territory carving, the assignment of resources to territories. The second phase is runtime territory management – territories must be able to seamlessly adapt to change throughout the year. Let’s look at these two phases in greater detail and discuss six techniques that will boost efficiency and sales productivity.
Territory Carving
Territory carving assigns resources (sales reps, sales engineers, customer success, ops) to opportunities (accounts, segments, verticals, geographies). Weak sales leadership allows sales reps to influence or even control the creation of territories. The result is often a set of districts gerrymandered to the liking of the favored few. Territory carving should be fair, balanced, optimized and rooted in the company strategy.
1. Define Your Corporate Goals
Has your Ideal Customer Profile (ICP) changed? Has your product or service offering changed? Are you targeting a new vertical, segment or geography? Which accounts/segments are exhibiting buying signals? Sales territories should reflect the priorities of a GTM plan grounded in data-driven insight.
Territory assignments are not only about sales reps. It’s essential to look at the team cross-functionally. Do the territories have the right mix of presales, customer success, sales engineers and ops? If there are experts in specific verticals, the plan should keep them aligned with their target market.
2. Carve Using Multiple Factors
In our experience, the best territory planning takes these factors into account:
- Employee Count
- Geography
- Industry/Vertical
- Global/Named Accounts
- Propensity to Buy
- Over carving
The last item (over carving) creates additional territories as placeholders for new sales reps not yet onboard. The sales ops team may see 40 sales reps on the roster and assume they need to carve 40 territories. The CRO secretly knows that the company is planning to go public and will be expanding to 80 reps by the end of the year. She may want to “over carve” the territories in anticipation of rapid growth.
Overcarving is a method of territory carving that builds in a growth path. Imagine that Maria is a sales rep with 20 accounts, out of which five are designated as temporary. The company is growing and will hire more salespeople, so Maria knows these accounts could move at some point in the year. The sales plan gives Maria credit for anything she closes in the five accounts and explicitly spells out hold-over policies – quota/compensation during the account transition period. Reps like things to be simple. Give them the plan, establish the rules, and don’t move the goalposts throughout the year. They want a fair and transparent quota system.
3. Balance Territories for Improved Productivity
For sales to operate at full capacity, territories must be balanced. Years ago, a colleague worked with an account executive named Alex. While other reps struggled to make their number, Alex exceeded his quota for three consecutive years – averaging 113%. Management rewarded Alex by laying him off. The reasoning? The other reps had quotas of $5M and $10M, so if they made 80%, they were still pulling in more revenue than Alex, who had a $2M quota. Looking back, maybe Alex could have taken on more responsibility and the other territories could have used some help. This would have been a win-win. The company lost a valuable and experienced rep without even fully appreciating the impact of imbalanced territories.
Territory balancing needs to be transparent and data-driven. Companies should have a model for scoring accounts based on predictive factors: activity, contact, lead quantity, lead scoring, seasonality, and alignment with the company’s strategy. Existing account owners should be looped in to validate critical account information (for example, the number of employees, business unit size, or more). Otherwise, you may waste precious time revising the plan after the fact. For instance, if a customer’s recent acquisition increased their employee count, perhaps it’s time to move them from the SMB (small to medium business) territory to major accounts.
Achieving Rapid Buy-in
A rigorous market model provides backup for quota assignments. When reps can see how quotas are computed, they are less likely to grumble. If they can see that quotas were assigned uniformly, based on a model and data-driven methodology, they are more likely to accept it and move on to the critical business of selling. Unlike more subjective methods, which must be held close to the vest, model-based quota assignment can be fully transparent, and transparency builds trust.
A good territory plan achieves rapid buy-in. The goal is to cut down the time it takes for the sales organization to understand the new plan and get to work. Many sales organizations spend one or two quarters on meetings, discussions and chaotic horse trading before the territory plan is finalized. Worse, they are doing this in Q4 when they should be focused on driving toward the year-end target. A good plan eliminates these inefficiencies and distractions through transparency and data-driven design.
Runtime Territory Management
Many companies spend half a year on territory design. It’s so labor-intensive that the process formally can only take place once annually. A territory plan is only as good as its ability to adapt to evolving business conditions.
1. Plan for Change
An effective plan design utilizes cutting-edge methods, backed by an automated software platform that enables runtime territory management. Business conditions change. Personnel change. Strategy changes. Change is often “unplanned.” The territory plan must be able to be seamlessly updated so that it stays relevant, fresh, fair and transparent.
A point of frustration for sales team leaders is the inability to make changes in response to the reality on the ground. Sales managers often decide fairly quickly what territory changes need to be made. They put the request into sales operations, but the change takes weeks or months to go through multiple levels of approval. A four week delay in the context of a monthly or quarterly commission check is a huge chunk of time. Time wasted waiting for CRM updates takes food off the table of the sales team. It’s critical to support sales workflows with automation so sales managers can change course decisively and immediately get back to the business of selling. A territory management software platform can enable runtime territory management to execute as a “self-service” workflow.
2. Eliminate Drag
Runtime territory management is not only about account assignments. Territories are the foundation for a range of workflows that must operate smoothly to keep the sales engine firing on all cylinders. “Drag” is the term for all the misaligned workflows that interfere with sales productivity. In a typical non-RevOps enabled sales organization, the sales operations team updates territories in the CRM, lead routing in the marketing automation platform, support case assignments in the issue tracking platform and so on for each and every operational system. To keep the sales machine operating at 100% efficiency, ops must execute all of these changes flawlessly. Imagine that the lead flow is updated incorrectly and leads are flowing to the wrong sales reps. It takes time for the reps to notice. Hot opportunities seek solutions elsewhere. Requests to fix the lead system are queued to the sales operations backlog. In the meantime, the business is losing revenue, and sales reps are banging into each other in accounts. Sales managers may press operations to move more quickly, but cutting corners increases errors. In some situations, desperate sales managers update SalesOps systems themselves. Now we have people managers doing sales operations when they should be focused on coaching sales teams.
3. Optimize for Long-Term ROI
A territory management platform minimizes drag and simplifies the runtime management of territories. It also provides data that keeps a sales organization on plan. One challenge for managers is balancing short-term and long-term priorities. Reps with a short-term focus may abandon strategic accounts that require long-term nurturing. A territory management platform helps score account activity so managers can see at a glance if their reps are following the GTM plan.
Back Your Methodology with Automation
Effective territory management requires savvy decision-making backed by automation that serves up analytical insights and streamlines non-value add tasks. Territory carving lays the foundation of the GTM plan, while runtime management keeps the territory architecture fresh and responsive to unplanned changes. The Fullcast GTM Planning Platform supports both phases of territory planning, territory carving and runtime management, so you can keep your sales force operating like a well-oiled machine.
