Drivers of World Class Territory Design
Successful territory design requires an analysis of market potential and workload. The ideal design should balance these two dimensions. Market potential is assessed through varying levels of data analysis based on the universe of prospects and accounts who can purchase your products/services. Workload is determined through the use of activity models and the consideration of time/cost/resource allocations.
The goal of territory design is to optimize the results along one of three dimensions:
- Focused Account Consolidation (Customer driven)
- Workload Leveling (Activity driven)
- Territory Compression (Cost driven)
Before attempting to design or optimize your territories prioritize your desired outcomes.
Driver #1: Focused Account Consolidation
The main driver is a need for greater effectiveness by focusing on specific accounts or market segments that contain the best “opportunity” for your sales resources while accomplishing
- Increased average transaction size
- Increased conversion rate
- Increased upsell/cross sell transactions
- Increased share of wallet
- Increased new customer acquisition
- Protected relationships with high value customers
Driver #2: Workload Leveling
The main driver is a need for greater effectiveness by redefining territories to eliminate imbalances in account and opportunity distribution. This situation presents itself after the merging of sales forces, disruptions in markets where committed sales resources are no longer needed, or years of consistent over achievement within a given territory. This approach seeks to accomplish:
- Balanced performance across sales territories
- Increased average transaction size
- Increased number of deals per period
- Greater quota attainment
- More consistent market penetration rates
Driver #3: Territory Compression
The main driver is a need for greater cost efficiency by redefining territories to be geographically dense while accomplishing:
- Lower travel expense
- Increased selling time
- Lower cost of sale
- Higher activity rates
