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How to Design Sales Territories
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Population density correlates to employment opportunities, which correlate to business density. “They’re much more likely to populate address information than other contact details.” I’d also like to point out that routing contacts by area code is very problematic. Most of us keep our cell phone numbers even if we’re moving across state lines.
Analyze your sales to-date “If it's not, invest in an enrichment tool to help you populate key fields such as industry, employee size, Fortune 500 ranking, and annual revenue.” Look at your customer distribution across industries and markets. If you have a wide industry pool, but your markets are limited it may be an issue of a salesperson only having the bandwidth to cover limited geography. It could also mean that your marketing team is pooling their budget into territories with active coverage.
Dividing accounts by geography is the most classic approach to territory divisions, and for a good reason! Before technology made it possible to meet with people via video conference around the globe without leaving your house (or changing out of PJs), it was convenient to limit territories to an area within driving distance of the salesperson’s house. “Time zones, languages, and cultural differences are all part of the puzzle.” We’ve even put certain personality types in certain regions. Apologetic and polite work well in the Midwest, and direct and snappy work best on the East Coast. Swap the two, and prospects get annoyed.
If you’re in a startup, you’re probably dealing with fluid use cases and target audiences. Some products go to market with niche use cases only to expand to have more global applications. At other times, it’s hard to find product-market fit. “Much like compensation planning, territory planning must align with strategic objectives above all else.” What’s the strategy behind territory design?
What’s the strategy behind territory design? “If not adequately thought through, people may be unable to make a patch productive through no fault of their own, and your company risks losing talented employees.” What is the goal of territory coverage?
If you’re in a startup, you’re probably dealing with fluid use cases and target audiences. Some products go to market with niche use cases only to expand to have more global applications. At other times, it’s hard to find product-market fit. “Much like compensation planning, territory planning must align with strategic objectives above all else.” What’s the strategy behind territory design?
The goals we’re striving for with territory coverage during design are: “Equitable distribution of ideal accounts” Enough volume to allow for immediate and longer-term goal attainment