What is Territory Management?
Let’s talk about that.
Gartner defines territory management as “the process by which sellers prioritize and manage a group of customers and prospects, typically organized by segments like geography, industry, and need.”
While this sounds straightforward, the reality is far more complex. Many organizations still rely on an annual territory planning process that results in a static territory plan—and this approach doesn’t hold up in modern infrastructure and go-to-market strategies. Unpredictable events such as layoffs, promotions, reorganizations, M&A activity, global pandemics, regulatory changes, and other shifts can render the plan obsolete before it’s even executed.
The Challenge with Static Territory Plans
The core problem with traditional territory management is its reliance on a static, annual plan. The annual territory carve-out approach is a well-known ritual in many companies, but it fails to account for the constant change that occurs throughout the year. For instance, business insight found that static territory management negatively impacts sales productivity by 10-15% compared to dynamic territory management.
Once your Sales Kick-Off (SKO) ends, the territory plan may already be outdated—leading to misalignment between the plan and execution. RevOps teams in large organizations face an uphill battle trying to keep execution aligned with the plan, especially when everything is still being managed through spreadsheets or custom code. This results in time-consuming tasks, manual updates, and a lot of frustration.
Introducing Agile Territory Management
In contrast to traditional approaches, Territory Management is an agile approach that acknowledges that change is a constant.
By embracing automated workflows, you can implement runtime changes instantly without any downtime, ensuring that your sales team stays productive and aligned with the plan. For example, if a sales rep leaves mid-quarter, a Territory Management system can immediately adjust coverage, assign leads, and ensure there are no gaps in service. This minimizes time spent on fire drills and lets your RevOps and SalesOps teams focus on more strategic initiatives.
The Benefits of Territory Management
Implementing a dynamic, agile approach to territory management offers numerous advantages for organizations:
- Increase Sales by 2-7%: This landmark study found that companies that optimize their territory design can boost sales without needing additional resources or changes to sales strategy. This improvement comes from a more effective allocation of sales resources and territory planning.
- Boost RevOps Productivity: By reducing the time spent on annual planning (from weeks or months to just days), RevOps teams can focus more on strategy and less on spreadsheet manipulation and firefighting.
- Achieve Consistent Sales Performance: With territory plans continuously aligned with market conditions and CRM updates, there is no risk of sales downtime due to outdated or missed adjustments.
- Retain Top Sales Talent: When territories are transparent and equitable, sales teams remain motivated, focused, and productive. A fair distribution of opportunities makes your team more engaged.
- Streamline Your RevOps Tech Stack: Using a single end-to-end territory management system eliminates redundant tools, reduces the need for constant system configurations, and simplifies overall operations.
What Is Territory Management Software?
Spreadsheets or custom code can become cumbersome and inefficient as the number of reps, territories, and account changes grows. While spreadsheets work for small teams with few reps, territory management software is essential when scaling your operations.
Territory Management Software enables organizations to:
- Reduce Planning Time: From months to days. AI-driven tools like SmartPlan can quickly create and balance territories based on your specific criteria, such as industry, firmographics, or customer need.
- Keep Execution Aligned with the Plan: Changes in the market—whether a funding round or a global recession—can be immediately incorporated into the territory plan and synced with the CRM, eliminating the need for IT support or custom code.
- Make Smarter Decisions with Scenario Modeling: What-if analysis allows you to test different territory designs, helping you make more informed decisions before implementing the final plan.
- Collaborate in Real-Time: Sales managers can update or recommend changes directly within the CRM, eliminating the need for lengthy meetings and ensuring complete alignment with the RevOps team.
- Single Source of Truth: By providing a single system of record for your GTM plan, you ensure full transparency on who’s responsible for which accounts, making commission calculations simpler and more accurate.
Read more: Assign the Right Resources to the Right Opportunities
Can I Use My CRM for Territory Planning?
Your CRM is a transactional system, not a territory planning tool. While your CRM is the foundation of your sales operations, it is not designed for territory planning. CRMs are transactional systems—good for day-to-day sales management but not for creating, adjusting, and aligning dynamic Go-to-Market (GTM) plans.
For instance, Salesforce’s Enterprise Territory Management (ETM) feature offers some basic functionality but falls short for more complex territory management needs. It doesn’t support things like automated territory balancing, scenario planning, or performance-to-plan tracking, which are essential for dynamic market conditions.
Read more: Empower Sales Managers With Self-Service Territory Management
Geographic vs. Non-Geographic Territories
Geographic territories are the most traditional approach to territory design, and they still make sense in industries where in-person sales are required—such as pharmaceutical or door-to-door sales. However, as remote work and remote selling become more prevalent, organizations are exploring new ways to segment their territories.
Read more: Beyond Geographic Territory Planning with SmartPlan.
Non-geographic territories are harder to implement manually but can offer more targeted, data-driven results. You can assign territories based on factors such as:
- Firmographics (company size, industry, etc.)
- Status-based segmentation (current vs. former customers)
- Needs-based segmentation (solution-oriented)
Territory Management software allows for hybrid models or completely custom territory designs that better align with your business goals and customer needs.
How to Break Down Organizational Silos in Territory Management
One of the greatest challenges in territory management is the siloed nature of sales, marketing, and customer success teams. In many organizations, each team uses different tools, leading to poor coordination and execution.
Territory Management is the key to breaking down these silos by aligning sales, marketing, and customer success around a unified GTM plan. Whether it’s ensuring proper account handoffs between sales and customer success or ensuring marketing knows where to route leads, an integrated system ensures smooth coordination across functions.
By making real-time updates to the plan, you ensure that all stakeholders have the same, up-to-date information, helping your teams remain aligned with the overall strategy and achieve faster execution.
Best Practices for Territory Management
There are two core phases in territory management:
- Territory Carving (Annual Planning):
- This is the initial territory design process where sales resources are allocated to opportunities.
- The goal is to create balanced territories that reflect your company’s corporate strategy.
- Start by defining your corporate goals—for example, have you entered a new market or launched a new product? Then determine what factors matter most for your business: geography, industry, propensity to buy, etc.
- Overcarving (creating territories with room for growth) is crucial to allow for flexibility and scalability.
- Runtime Territory Management (Ongoing Adjustments):
- Even the best plans need regular updates due to shifts in the market or business.
- Using automation to handle non-value-added tasks ensures your team stays efficient, and the plan stays aligned with changing conditions.
- Quick, automated updates to territories ensure that your reps are always focused on the right accounts, and they’re not wasting time due to outdated plans.
Read more: Territory Management: Boost Efficiency and Sales Productivity
Territory management is no longer a once-a-year activity; it needs to be an agile, continuous process that adapts to the realities of today’s fast-paced business environment.
The goal of territory carving is to create fair, balanced territories that reflect the company’s corporate strategy. The first step to territory carving is to define your corporate goals, using data-driven insight. Have you changed your ICP, introduced a new product, or entered a new market? Once the corporate strategy is defined it is time to identify the criteria that matter most to your business, such as geography, industry, and propensity to buy.
Implementing a Territory Management system ensures that you can create and maintain dynamic, data-driven territories that align with your GTM strategy, optimize sales resources, and improve collaboration across sales, marketing, and customer success teams. With the right system in place, you can achieve better sales performance, greater agility, and a more productive RevOps team.
More detail on territory management best practices can be found here.
