The Coaching Effect Blog

8 indicators that your sales territories are not aligned fairly

Posted by Kristi Shoemaker

December 17, 2009

If you missed our December 14 Sales Management Webinar, all I can say is "I am sorry".  Ken Kramer of TerrAlignand Bill Eckstrom of EcSELL Institute provided some of the most valuable information on the topic of sales territory alignment. There is a scientific way to establish equitable territories for your sales team. One of my biggest take-aways was this:

Ken Kramer stated that the first step is to align your territories and the result will be your true stars will shine and your low producers won't. It, in affect, levels the playing field so everyone's true abilities are highlighted. When sales reps are performing at different levels, the first thing most sales managers do it look at their skills and talent.  However, unless their sales territories are aligned so that everyone has a equal chance for success, it isn't fair to judge the rep's skills. 

Here are some additional highlights from the webinar.

8 indicators that your territories might be out of alignment:

  • You hear "I just know" more than "the data shows..."
  • You're part of the 70/30 statistic
  • Reps from same territory keeps turning over and you think that location just doesn't breed good reps
  • Managers are afraid of top reps
  • More exceptions than rules
  • Revenue rules, market-share drools
  • Sales Training is an issue, but not a big one so long as the good reps stay
  • You don't know how long it takes to service an account or how many accounts are needed to produce desired revenue for a territory

Benefits of optimizing sales rep resources:

  • Increase sales and profits by 4% to 12% by full resource utilization
  • Reduce travel costs on average by 10%-15%
  • Ability to identify over and under-achievers and reduce turn-over
  • Equitable territories lead to the ‘right' quota and incentive plan, and therefore motivated, focused sales reps

Territory design best practices:

  • Balance territories on metrics similar to the ones used to pay sales commissions
  • Build territories from the ground up
  • Build territories around customers, not sales reps
  • Base quotas on opportunity from each territory
  • Involve field managers in the territory alignment process

Do you know that your territories are aligned?  Please share what how you do territory planning.

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