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October 25, 2022

The Business Case for Territory Management Software

Fullcast

The Fullcast team

Business Case for Territory Management Software

Do you need a Territory Management solution? In fact, you can’t live without one.  Here’s why.  

Sales and Revenue Operations roles have become increasingly strategic and are now tasked with important activities like high-level GTM planning, including territory planning. The act of creating balanced territories can have a huge impact on your team’s ability to achieve its sales goals, yet it is often overlooked. Companies that optimize territory design can increase sales by 2 to 7% without any change in total resources or sales strategy, according to the Harvard Business Review. Good territory design improves quota attainment and rep retention, making it a key driver of sales productivity and performance.

However, many companies are still stuck in the past performing high level territory planning manually using spreadsheets. It is nearly impossible to carve and manage sophisticated territories based on multiple criteria with this inefficient approach. It limits territory carving to a few simple metrics like geography or number of accounts, which very likely don’t reflect the corporate strategy or maximize opportunity across resources.

When your territories are not balanced well, sales will become sluggish or worse, top sellers may vote with their feet, leaving the organization scrambling to backfill these critical roles. The Ops team will be deluged with constant complaints and change requests.  Fighting these fires sucks their time and impedes their ability to operate as a strategic partner to Sales. 

That’s why many companies are incorporating Territory Management software into their RevOps tech stack. A Territory Management solution pays for itself many times over by enabling teams to hit their sales number and increase RevOps efficiency.  We describe some some of the quantifiable benefits below. You can also try out our ROI calculator here.

Design More Effective Territories

The most important benefit of a Territory Management solution is that it helps you design balanced territories and attainable quotas.  It enables you to assign accounts based on the metrics that matter most to your business.  By evenly distributing good opportunities across the team, each rep gets to spend more time on high-value accounts and has a fair chance at making his or her number.

In addition, a Territory Management solution enables Ops to operate with agility and instantly make runtime changes, such as role and assignment changes, and automatically sync them with the CRM.  Automation of these time-consuming tasks eliminates downtime and keeps sales feet on the street.

Shockingly, average quota attainment stands at only 58% regardless of a rep’s tenure. However, companies with well-designed territories consistently hit their sales goals. In fact, a recent study found that enterprises using automated technology to map their territories can see up to 30% higher sales quota attainment. This means that a $1M quota carrying rep can achieve incremental revenue of $174,000 more each year.  Now multiply that by your number of reps and you’re making a significant impact on your top-line number.

Retain Top Talent

Sales turnover is a huge and growing problem and is costing companies millions in lost revenue.  SiriusDecisions data shows that almost half (45 percent) of B2B sales organizations have average turnover rates above 30 percent. And it’s only getting worse. Sales organizations experienced 58% higher turnover in 2021 than 2020

Conservatively it takes 2 months to recruit and 3.2 months to onboard a new sales rep.  That’s more than 5 months of lost production. Consider a 100-person sales team with 30% turnover that needs to replace 30 reps.  If each of these reps carries a $1M quota, that’s more than $400K in lost revenue per seller, and a $12.5M corporate wide shortfall due to downtime and ramping. 

In many cases, sellers are leaving because they don’t believe their territories are fair.  Whether the inequity is real or perceived, it is critical that the territory balancing process be transparent. As noted in the HBR article, “Salespeople who have too little opportunity will quickly become discouraged, especially if they see other salespeople making lots of easy money milking territories with many large-opportunity accounts.”  

Although it is difficult to attribute improvements in rep retention to one primary reason, use of Territory Management solution is certainly a contributor. It enables you to design equitable and transparent territories so the sales team stays motivated, productive and on-target.  Even a slight reduction in rep attrition with a Territory Management solution, e.g. 20% in the aforementioned scenario, can have a significant impact on your ability to achieve your sales goals, i.e., an additional $2-3M in revenue.  

Dramatically Reduce Planning Time

A Territory Management solution provides dramatic improvements in Ops efficiency.  It automates time-consuming manual tasks and eliminates spreadsheet chaos. This reduces the annual planning exercise from months to days, and even more so when an AI-driven planning engine is used.  It also makes it possible to easily collaborate and collect feedback from the field, turning meeting time into customer facing time. In one example, use of Territory Management software saved the GTM team more than 100 collective meeting hours during the annual planning process.

Even more powerful, a Territory Management solution makes it possible to easily make runtime changes to the plan and keep it synced with operations.  By setting automated rules, Ops can seamlessly make changes to their plan throughout the year - without a single spreadsheet or code change - and have these changes immediately reflected in their CRM.  

These operational efficiencies save the Ops team time and money. Well-designed territories also keep the sales team happy, eliminating constant firefighting and tactical distractions, and enabling the team to shift from a supporting role to a true, trusted strategic partner for the business.

Do More With Existing Resources

During difficult economic times, operational efficiency takes on a special importance. Companies are asked to be more agile and lean. Use of Territory Management solution becomes increasingly important as it enables the Ops team to do more with less.  Instead of spending months on annual planning and the rest of the year making runtime changes, Territory Management software automates many time-consuming manual tasks enabling teams to operate more productively.  As a result, your Ops team will be able to support a growing Sales effort, without increasing headcount. 

Conclusion

If you’re considering adding a Territory Management solution to your RevOps tech stack, feel confident that you are making a wise investment. The ability to design more effective territories improves seller productivity and directly impacts the company’s ability to achieve its revenue goals.  By creating territories that drive more deals and quota attainment, RevOps can quickly prove its strategic importance to the revenue organization.

To calculate the ROI of Territory Management software at your organization, try our ROI calculator and let us know what you think.

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Do you need a Territory Management solution? If you want to design effective territories, you can’t live without one. Here’s why.

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The Business Case for Territory Management Software

Do you need a Territory Management solution? If you want to design effective territories, you can’t live without one. Here’s why.

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Business Case for Territory Management Software