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How to Design Sales Territories - Kennect
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Territory design fails on inputs more often than on method. Four things, and the third is the one people skip. The territory planning guide covers the modelling itself; this is the input list that has to exist first. “1) Addressable value per account, not revenue to date.” 2) Account count weighted by cycle length.Forty accounts on a nine-month cycle is not comparable to forty on a six-week cycle, and headcount maths treats them as identical.
What happens to deals in flight when a territory changes? “Write one crediting rule rather than handling exceptions individually: deals past a named stage at the cut-over date credit to the originating rep.” Why do territory problems look like performance problems?
A comp plan can only measure what the territory allows. Give two reps the same quota against patches with different opportunity, and the plan is no longer measuring performance. It is measuring the allocation, and paying out on it. “They are arguing about their pay, correctly, because the boundary sets their ceiling before they make a single call.” It also explains why territory problems present as compensation problems. When attainment skews low across the team with a few far above, the instinct is to look at the plan. Often the plan is fine and the patches are not comparable. Territory, quota and payout resolve from the same data, which is the case for running them on the unified compensation platform rather than in three separate files.
What this covers. “Territory design decides how fair your comp plan is before a single rule is written.” Why territory design is a compensation decision
Why territory design is a compensation decision “Give two reps the same quota against patches with different opportunity, and the plan is no longer measuring performance.” This is why territory arguments feel disproportionate. The rep arguing about a boundary is not being difficult. They are arguing about their pay, correctly, because the boundary sets their ceiling before they make a single call.