What is Territory Management?
Put simply, Gartner defines territory management as “the process by which sellers prioritize and manage a group of customers and prospects, who are typically organized by segments (such as geography, industry and need).”
That is easier said than done. Most organizations only engage in an annual territory planning (or carving) process with the end result being a static territory plan. Unfortunately, the territory plan is often obsolete by the time SKO ends. Mergers, acquisitions, layoffs, departures, promotions, hiring, reorganizations, strategic shifts, funding rounds, global pandemics, recessions, regulatory changes and other unpredictable events continuously disrupt the Go-To-Market (GTM) and territory plan. RevOps faces a revolving door of change. In truth, in the face of these potent forces, the static territory plan never really stood a chance. RevOps teams at large organizations face an uphill (and often losing) battle trying to keep execution aligned with the plan, especially when they rely on spreadsheets and custom code to make any changes.
Territory Management, on the other hand, is an agile approach to planning. It recognizes that change never ends and organizations must be able to adapt throughout the year. Territory Management relies on automated workflows so that runtime change can be implemented immediately, without downtime, ensuring that your sales team is always selling. For example, when a sales rep leaves in the middle of the quarter, a territory management system ensures that coverage is maintained, holdouts are defined, and leads are properly routed. It eliminates time-consuming manual tasks so that RevOps and SalesOps teams spend less time fighting fires and more time on strategy. A Territory management approach ensures that execution is always aligned with the plan.
What are the benefits of Territory Management?
Companies that optimize territory design, “can increase sales by 2-7%, without any change in total resources or sales strategy.” Teams that practice good territory management:
- Dramatically improve RevOps team productivity. They reduce annual planning time from weeks or months to days. By using policies and automation, they spend more time on strategy, and less time creating pivot tables and fighting fires.
- Consistently hit their sales goals. They eliminate sales downtime, because plan updates are handled immediately and automatically deployed to the CRM.
- Retain top talent. When territories are equitable and transparent, the sales team stays motivated, productive and on-target.
- Streamline the RevOps tech stack. With one end-to-end territory management system, teams spend less time configuring systems and less money on redundant tools.
What is Territory Management software?
Spreadsheets are great, until they are not. A small organization with 20 sales reps can likely manage just fine with spreadsheets, but as your organization scales, reliance on spreadsheets (or worse, custom code), can bring your team to a screeching halt. The volume and complexity of plan changes will increase exponentially, making collaboration, version control, and agility nearly impossible.
At this point, territory management software can be invaluable. Those organizations that ditch their spreadsheets and adopt a territory management software will be able to adapt to market changes faster than their competition.
Territory management software will allow you to:
- Reduce planning time from months to days. It enables you to segment your territories and accounts by the differentiators that matter to you and your business. Tools like SmartPlan use an AI rules engine to quickly and intelligently create and balance territories based on criteria you set.
- Keep execution aligned with the plan. You can quickly respond to changing market conditions, like a funding round or global recession, because run-time changes to the plan can be made at any time and immediately synced with the CRM and other operational systems. This eliminates the need for custom code, IT support, or more headcount.
- Make smarter business decisions with ‘what-if’ scenario modeling. Deploy these plans to your CRM instantly.
- Collaborate effectively. Sales Managers can easily make plan updates or recommendations in your CRM, enabling meeting-free collaboration and complete alignment with the RevOps team.
- Provides a single system of record for your GTM plan. All account changes are effective-dated so there is no question who was doing what job on what territory and at what time, making it easy and painless to pay your team promptly and fairly.
Can I use my CRM for territory planning or territory management?
Your CRM is a transactional system, not a territory planning tool. While the CRM is the foundation for sales operations, it was never meant to help sales leadership formulate a dynamic Go-to-Market (GTM) plan. If you rely on your CRM for planning, it will be difficult to attain the agility needed to keep your sales team productive. To make any plan changes, your CRM data would need to be downloaded to spreadsheets, adjusted, and then reloaded, leading to version control and collaboration challenges.
Salesforce offers an Enterprise Territory Management (ETM) feature. However, it offers limited functionality for complex territory management. For example, it does not support automated territory balancing, scenario planning with what-if analysis, or ability to measure performance to plan.
Should I use geographic or non-geographic territories?
Geographic-based territories are the most common form of territory design. Geographic territories still make sense in many industries where in-person sales are required (e.g., pharmaceutical or door-to-door solar sales). However, as remote selling becomes the norm in many industries, many companies are looking to assign resources based on other factors that more closely align with their corporate strategy. A Territory Management solution enables you to assign your territories based on the factors that matter to you, from any firmographic (company size, industry, budget), status-based (current vs former customers), or needs-based (e.g., solution-oriented) data. It also enables you to follow a named-account strategy or hybrid model.
Does Territory Management only benefit the Sales organization?
RevOps involves a synchronized dance of resources from Marketing to Sales to Customer Success to Finance. To be successful, your organization’s lead-to-renewal planning process must be holistic. Your Sales team needs a territory plan, as does your Customer Success team, with a coordinated handoff of accounts between them. Your Marketing organization needs to know how to route leads based on Sales’ assigned territories.
As such, the Territory Management process is essential for the entire RevOps organization. It optimizes resources for efficiency and productivity across the entire process, including but not limited to Sales, Account Management, Business Development, Sales Engineering, and Customer Success roles. In many cases, territories for these different resources won’t (and shouldn’t) even be the same.
What are the key steps to GTM Planning and Territory Management?
When approaching the GTM and Territory Management process, it’s essential that you think customer-first by being mindful of how your plan will impact both internal and external customers. There are 10 main steps to GTM Planning and Territory Management:
- Define and Review Ideal Customer Profile (ICP)
- Size the Market
- Confirm Targets
- Determine Capacity Needs
- Define Roles
- Carve Segments
- Assign Resources
- Commit the Plan
- Define Run Time Policies
- Define Processes for Change