Sales Territory Design: Aligning to your Strategy

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Best Practice• Territory Design should support and align

with your sales strategy• Strategy scenarios– Integrate acquired company’s sales force– Achieve cost of sales reduction – Segment sales force for focused selling into

key markets– Balance sales coverage for expanding and

contracting markets

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Key Inputs into Territory Design• Market Potential• Assessed through data analysis on the

universe of prospects and accounts who can purchase your products/services

• Sales Workload• Determined through the use of activity

models and the consideration of time/cost/resource allocations

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Territory Design ProcessThis presentation is focused on concepts that support steps 1-3 in the process. Namely:• Territory design goals• Data analysis approaches

Territory Design Process

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Territory Design GoalsOptimize results by optimizing for one of three common goals:

1. Focused Account Consolidation (Customer driven)

2. Workload Leveling (Activity driven)3. Territory Compression (Cost driven)

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#1 Focused Account Consolidation Main driver - need greater effectiveness in specific accounts or market segments that contain the best “opportunity”. Benefits:• 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

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#2 Workload LevelingMain driver – need greater effectiveness by redefining territories to eliminate imbalances in account and opportunity distribution. Benefits:• Balanced performance across sales territories• Increased average transaction size• Increased number of deals per period• Greater quota attainment• More consistent market penetration rates

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#3 Territory CompressionMain driver - need for greater cost efficiency by redefining territories to be geographically dense. Benefits:• Lower travel expense• Increased selling time• Lower cost of sale• Higher activity rates

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Data Analysis ApproachesData analysis focuses on one of the following four approaches:

1. Named Account Approach2. Industry Approach3. Sales Frontier Approach4. Metro Compression Approach

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#1 Named Account Data Analysis•Focus on high value targets only (named accounts) for your TD effort. •Typically used in support of the Focused Account Consolidation goal•Fully capture all current spend, future potential and workload by named account

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#2 Industry Data Analysis•Determine the ideal customer profile in one or more key industry verticals that have a high propensity to buy your product •Limit the future territories to the key industry verticals•Fully capture all current spend, future potential and workload by account in key verticals

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#3 Sales Frontier Data Analysis•Analyze territories for potential and chart corresponding performance on a graph. •The outer frontier of performance for similar territories sets the bar for territory definition. •Assumes peak performance is possible given a certain territory potential and other factors are responsible for sub-peak performance.

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#4 Metro Compression Data Analysis

•Optimize territories around dense metro cores•Largest concentration of target accounts exists in the smallest geographical area •Plan for accounts outside of major metro areas with indirect channels or inside sales•Typically used to support cost reduction in Territory Compression goal

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Territory Design Planning•Which of the 3 TD goals best supports your sales strategy next year?

1. Focused Account Consolidation (Customer driven)

2. Workload Leveling (Activity driven)3. Territory Compression (Cost driven)

•For a given data analysis approach, do you have the data you need?•Do you have in-house talent to perform the analysis?

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Phone - 1-888-556-7338

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