Is Your Territory Planning Truly Customer-Centric?
…or just convenient for your company?
Territory planning might seem like a straightforward task, but it’s fraught with complexities that many organizations overlook. When done well, territories empower you to get the right resources on the right opportunities. However, many companies miss the mark on this. Two common missteps include misaligned segmentation and carving territories for seller convenience rather than the customer journey.
It seems obvious that the customer journey should be first and foremost in your territory planning process. So why do organizations make these mistakes?
Teams often default to familiar segmentation or use an ‘industry standard’ that doesn’t fit their customers. Such seller-centric territories prioritize company convenience over customer needs.
We’re not here to shame RevOps teams that make these mistakes; without a doubt, Ops is often seriously underresourced. Plus, it’s understandable that sometimes the optimal territory structure simply isn’t feasible given your constraints.
With all this in mind, this blog will guide you through assessing your current territory planning approach.
Let’s explore seven important planning areas and highlight potential errors where businesses might prioritize convenience instead of customer needs. For each topic, we provide questions to encourage new thoughts and suggest best practices. This helps maintain a focus on the customer.
1. Geographic Planning: Should You Prioritize Borders or Customers?
For many businesses, geography remains an important factor for territory planning. However, in an increasingly remote world, it’s necessary to scrutinize your reasons for having geography-based territories.
For instance, if sales representatives do not meet buyers face-to-face, different time zones could be a key reason to think about location. In this situation, you might choose to move away from a strictly regional territory setup. Instead, you can focus on larger areas that align with time zones.
Within these constraints, you can then use more meaningful attributes to allocate accounts to specific territories.
Questions to consider:
- Do you find vast differences in territory metrics, such as number of accounts, across your purely geographical territories?
- Are the geographic factors relevant to your customer segments, or is it tied to the convenience of your existing processes?
2. Quota Calculations: Simple Division or Strategic Decision?
Too often, quotas are determined through overly simplistic math. For example, splitting the total revenue target equally among all company representatives without considering other factors.
You should give the team a chance to offer feedback. This will help adjust the quota to match the territory. It’s important to estimate the true potential of the territory. This will help you ensure that the territory matches the expected sales growth and the targets set for it.
One benefit of this approach is that it helps you explain how the quota was decided during territory management. This way, reps feel that their targets are fair and equal.
Questions to consider:
- Are your quotas identical across regions, ignoring market dynamics?
- Have you adjusted quotas for specific territories?
3. Resource Allocation: Fair Play or Strategic Play?
It’s common to use ratios to allocate resources. For example, every rep gets 40 accounts. Or, each state has one rep. Or, for every four reps, there is one assigned SDR.
If you don’t have the same type of customers in each area, sharing resources equally might create issues.
Some of your customers may be struggling to get a reply to their demo request. Meanwhile, other prospects may receive outreach from multiple SDRs on the same day. Instead of relying on simple ratios, find metrics that really matter and then align resources accordingly. This could look like allowing flexibility for teaming structures within segments rather than requiring consistency and equal distribution.
Questions to consider:
- Are resources allocated without aligning with revenue potential?
- Is your resource allocation equal but not necessarily equitable?
4. Segmentation: By the Book or Buyer Behavior?
There’s no reason to reinvent the wheel. Doing something new and ‘innovative’ just for the sake of novelty is usually a mistake. That said, the most common segmentation strategies may not apply to your customer base. As your market changes, the segmentation you used for the past few years may no longer best serve your customers.
Consider all the different attributes you can use for segmentation rather than focusing on the most common ones.
Look for traits that show the main differences, but make sure not to create segments that are too specific and become confusing.
Questions to consider:
- Are you utilizing a static segmentation model without considering evolving customer needs?
- When was the last time you audited your segmentation criteria?
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5. Metrics: Serving Stats or Serving Customers?
Sales territories are usually set up based on different types of internal data. This information may include important details, like how many potential customers are in a region and the expected size of deals that may happen there.
This data helps us see where to focus sales efforts and how to use resources wisely. By examining these metrics, businesses can form territories that are manageable and strategically in line with their sales objectives, allowing sales teams to optimize their chances for success in each market segment.
By using our internal data and knowing our customers, we can create sales territories that are easy for the team to handle and meet customer needs well.
Questions to consider:
- How might your current territory alignments be influenced by internal priorities over customer-centric ones?
- Are there opportunities to incorporate more customer feedback or behavior patterns into your territory structuring?
- How can you ensure that territory adjustments, while aligning with internal goals, also cater to evolving customer needs?
6. Account Family Alignment: Broad Brush or Business-Specific?
Understanding the buying structures of potential customers is a must. Different corporate entities vary in the way they structure account hierarchies that dictate their purchasing decisions. Some companies may make purchasing decisions at the main office location, while others might let local branches or departments decide for themselves. While your organization might have standardized rules of engagement or selling process, it might not always align seamlessly with the purchasing protocols of your clients.
This misalignment can result in misunderstandings, missed opportunities, and even potential conflicts. While it’s tempting to have a ‘one-size-fits-all’ approach for efficiency, adapting to the nuances of each client can lead to smoother interactions and better sales outcomes.
Questions to consider:
- How might your current rules of engagement be misaligned with the purchasing structures of your clients?
- Are there specific clients or deals where your standard approach conflicts with their buying procedures?
- How can you change your engagement rules to better fit the different buying structures of your prospects?
7. Channel Choices: Leaning on Legacy or Listening to the Market?
Businesses naturally tend to stick with sales channels that have proven successful in the past. For instance, a company might rely heavily on direct sales and partner channels. However, as the market changes, customers may start to prefer marketplaces because of their convenience and variety.
Introducing new sales channels can be challenging, especially when they differ significantly from traditional customer interactions. Though direct sales and partner channels remain valuable, it’s crucial to acknowledge changing customer preferences.
Questions to consider:
- Could our territory structures be inadvertently sidelining the potential of online marketplaces?
- How might integrating marketplace insights transform and refine our territory allocations for a more customer-aligned approach?
- How can we balance traditional channels with new platforms to meet the varied needs of today’s customers?
Identifying and addressing situations where convenience has taken priority over customer experience can open the door to more meaningful interactions and improved business results.
Is the customer at the core of your territory planning and go-to-market strategies? The Fullcast team can help improve territory strategies with smart and scalable solutions your RevOps team and customers will love.
