Territory Design Mastery: Avoiding fireworks and building trust with Sales
Like pineapple on pizza and politics at the dinner table, Territory Design always seems to ignite the most heated conflicts. But unlike the others, territory design cannot be avoided. It's an essential task that nearly every B2B sales organization must do to achieve efficient revenue targets, react to market changes, and scale its team. While seemingly straightforward, this process is often transformed into a political battleground, triggering passionate debates among various stakeholders, from Sales, Customer Success, IT, Marketing, Finance, and Executives.
In this article, let’s delve into the reasons behind these conflicts, explore their impacts, and provide strategies for running a territory design process that minimizes conflicts while fostering collaboration and trust.
Before delving into the intricacies, let's establish a common understanding of what we mean by "territory." In this context, a territory refers to a group of accounts assigned to a salesperson, based on factors such as geography, target account list, existing customer base, or a combination thereof.
Why Conflicts Arise 😡
On the surface, divvying up accounts may seem simple — match the number of accounts with the number of reps. However, anyone who has taken ownership of the process knows that beneath the surface lies hidden complexity. Satisfying numerous stakeholders, balancing multiple goals and utilizing diverse sets of data within a tight timeframe creates a pressurized scenario. As a result, conflicts arise, and RevOps is placed in a tough spot as they navigate competing interests and manage the project effectively.
We’ve boiled it down to these three primary conflicts:
“Multiple stakeholders = competing goals”
“It’s a really hard math problem”.
1. Multiple stakeholders = competing goals 🚫 🤝
Let's explore the objectives of some key stakeholders involved. We will focus mostly on the relationship between RevOps and Sales, but it’s worth talking about other parties.
For Finance, the goals of territory design are efficiency focused and derived from top-down planning. They also care about how this process impacts quota setting.
Common conflicts from Finance sound like:
“Shrink territories, increase quotas”
“Limit travel costs”
“We need better measurements of rep productivity”
Marketing cares most about the data strategy and hygiene components of territory design. It heavily impacts Marketing functions like ABM and lead-routing.
Common conflicts from Marketing sound like:
“Let’s introduce new ICPs”
“We need to use X enrichment provider”
“Marry this with the updated account based marketing (ABM) strategy”
IT/Business Systems teams want to maintain a clean database. They think systemically and champions scalability.
Common conflicts from IT/Business Systems sound like:
“We can’t automate that in CRM”
“This is too many custom rules”
“There’s not enough time to make changes systemically.”
Sales Leadership is focused on a structure to achieve revenue targets today, tomorrow, and in the future.
Common conflicts from Sales Leadership sound like:
“Change our coverage model, but minimize account turnover”
“No missed selling time”
“Our account prioritization is wrong”
Sales Reps (AEs, AMs, CSMs, BDRs…)
Sales Reps want the accounts that provide them with the best chance to hit their quotas.
Common conflicts from Sales Reps sound like:
“I don’t want to lose X account” or “I want Y account”
“I didn’t get a fair shot last year”
“All data we’ve ever had in our CRM are wrong and not to be trusted ever ever EVER”
As the stakeholder demands converge, RevOps finds themselves being pulled in different directions, in many cases by more senior members of the company. The competing goals often mean that not everyone will be fully satisfied. For instance, if two sales reps desire the same account, dividing it in half is not feasible, and the rep who doesn't receive the account still faces a quota to meet. This ripple effect continues up the chain as managers and leaders compete for the best position. In these situations, RevOps plays a crucial role as an arbiter, aiming to strike a compromise that considers the needs of all parties involved. Which brings us to reason #2 for why conflicts arise:
The loudest voice in the room - and most of the conflict - belongs to Sales.
2. Sales gets…excitable 😉
It's essential to understand the perspective of the sales team. While it may be easy to dismiss their demands as unreasonable, their motivations and challenges must be considered:
Quota & Accounts = Life
Sales is incentivized to break through any barrier between them and their quota. Their quota becomes ingrained in their minds, and they face no relief if a customer rejects their offer or it's not the right time. They are forced to push on relentlessly, as their compensation depends on meeting or exceeding their sales targets. This internal tension is natural and intentional. Sales should be asking for the best accounts and opportunities to hit their quota.
If Sales is assigned accounts that don’t provide opportunity, it impacts them and their families significantly. It makes sense that they advocate for themselves and leave the company if the process is broken.
Product & Market Intimacy
Salespeople have unparalleled feedback on the company's products and value propositions. The accounts assigned to them through the territory design process are their daily companions, sometimes for years. They intimately understand the intricacies of the CRM and may identify discrepancies or inaccuracies in the account data. Their expertise warrants a certain level of skepticism towards someone who controls the process with only a macro view. Like a basketball player being critiqued by a journalist who never played the game, salespeople can become defensive and push back.
Professional Bullsh*t Detectors
Sales have been hurt before. Previous companies may have put them in unfavorable positions, mishandled changes, over-hired, favored specific reps with advantageous account assignments, or delayed their ability to sell effectively. As a result, salespeople have developed a keen ability to discern genuine opportunities from futile pursuits. They are trained to break through obstacles and not take "no" for an answer.
By understanding the perspective of sales, we can acknowledge their valid concerns and motivations. While it's essential to strike a balance between their requests and the broader goals of territory design, it's crucial to provide them with transparency, fairness, and opportunities to succeed.
That brings us to the final reason problems arise in the territory design process: it's an extremely challenging mathematical problem to solve.
3. It’s a really hard math problem 🤯
Organizations often underestimate the complexity of territory design as a math problem. When multiple factors like Account Score, Number of Accounts, Size of Accounts, Industry, Zip Code, Segment, and Region need to be considered simultaneously, it creates a massive equation. Moreover, the challenge is compounded by the ever-changing nature of variables, such as new intent data, reps leaving or being promoted, or new sales leadership. As a result, territory design becomes a problem with countless variables to consider.
Solutions That Don’t Work 🤦
RevOps is no stranger to problem-solving, but there are pitfalls when it comes to avoiding conflict in territory design. Here are some common mistakes to steer clear of:
1. “A new enrichment provider will solve the problem” 💰
It can be tempting to think that acquiring a new data provider will solve the process of territory design. This usually happens when the organization is increasingly frustrated by the quality of the CRM database. It can feel futile to make and communicate decisions based on an imperfect data picture. But it’s important to remember that enrichment providers are scraping the internet to find firmographic, technographic, intent and other interesting data about companies. The internet is always in motion and by nature, this data will remain imperfect. It also takes time and money to implement data providers and incorporate them into the tech stack.
The advancements in data enrichment are happening fast and doing a lot to help companies identify ideal customer profiles and prioritize accounts. They can help a lot with upstream portions of territory design, but are not a silver bullet.
2. “Let’s do less and let Sales run with it” 🏖️
It can be tempting to avoid conflict by giving full control to Sales. But Sales Leaders generally do not have the systems or analytical muscles necessary to handle a process like this. They are not typically familiar or comfortable with managing large datasets.
Sometimes companies will even take this a step further and let reps entirely choose their own account lists. While this resolves some of the administrative burden for RevOps, it misses on the overarching goal of hitting revenue targets efficiently. Sales reps will spend too much time mining data and not enough time selling. The same conflicts will arise, and processes will need to be instituted to facilitate the new behavior. Companies won’t develop consistency in approach or positioning to the market with this focus-less approach.
3. “Let’s remove Sales from the process” 😤
Conversely, it can be tempting to block Sales from the process so that RevOps can go about its work and get stuff done. Sales has a uniquely deep understanding of the ideal customer profiles, sales policies, and market potential. To not include Sales’s feedback would not only alienate them, but miss out on tribal knowledge that the CRM can’t offer. Encouraging Sales feedback in the process will simultaneously validate data enrichment (or something better than how I am saying it)
4. “Geography at all costs” 🗺️
Incorporating some geographical components into territory design makes sense. It makes sense for reps to be closer to accounts for travel and relationship reasons. It makes sense for accounts in similar cultural contexts to be grouped together. But many companies over-index on geography, making it the primary variable that is solved during the design process. Carving up maps is a problem that has endless permutations and forces unnecessary logical layers. If reps leave certain geographic areas, it shrinks hiring pools.
Solutions That Do Work 🎊
1. Collaborate clearly with Sales 💬 👯
Make it simple for Sales to assist in prioritizing accounts, handling holdovers, and championing equity. This means running surveys to get Sales’s opinion on ICP criteria, establishing policies around account and rep turnover, and a thoughtful definition of fairness. Clear participation and increased transparency builds trust with Sales and gives them responsibility. It lets them know that there is a method to the madness and that RevOps is on the same team.
Identify goals and limitations. Sales will be coming in and out of the Territory Design process, so it’s important to remember that RevOps is handling the directional steering. Agreeing on objectives in the upstream process helps to make a sometimes ambiguous process seem more thoughtful.
2. Prioritize precision & equity 🎯
It’s difficult to measure performance and retain talent when each sales rep is starting from a different point. Developing a methodology for precise ICP implementation and clear definitions of equity amongst sellers allows a business to measure and refine its territories over time. It also demonstrates care to Sales and supports retention of talent.
3. Add horsepower 🏇
Understand that calculating different design scenarios is a large, multivariable problem. Avoid getting into a situation of reliance on spreadsheets or mapping tools. These manual tools require lots of versioning, admin, and time. Instead, consider supporting your efforts by using automated territory design software to remove manual steps during the iterative design process. Elevate your focus to the design objectives instead of spending your time calculating different scenarios.
4. Communication plan 🗣️
Develop the data needed to showcase how their new territories will enable them to develop sufficient pipelines and have a realistic probability of meeting their targets. By showing a data-driven territory design to senior leadership gives them confidence they’re not selling a balloon of hot air to their team. These territories are built with their best intentions in mind leveraging the account data at hand.
Designing territories is a hard problem. It requires analytics involving many stakeholders and variables and could be done many different ways. RevOps often gets caught in the middle of this process and ends up in conflict because they can’t make everyone happy.
But Sales is right to be opinionated about the process. The outcomes of territory design directly impact salespeople’s ability to earn money and grow in their careers. They have extremely close relationships to both accounts and the product, and their opinion should be sought.
These results not only help companies to hit revenue targets more efficiently, but they help them to operationalize the territory design process and to retain reps over time.
The End…Until Something Changes 🙌
In the end, fireworks in the territory design process are unavoidable. But fireworks are a result of the impact the process has on different stakeholders, especially Sales. By tackling these conflicts upstream and using the strategies described, companies can turn territory design from a nightmare to a competitive advantage.
After all, the process provides a baseline for how an organization aligns its most expensive resources to its market. Through this process organizations can better achieve efficient revenue goals, retain talent, and better scale. Teams and markets are ever-changing, and by establishing discipline practices the results compound over time.