Overview - Sales Territory Process

Questions you need to answer Is your existing customer account base segmented?

How can you determine true territory potential?

Are your territories optimized and balanced?

Are territories aligned with individual rep targets or quotas?

Does your CRM capture your territory potential, preserving key institutional market knowledge when reps leave?

Territory Optimization Goal

Balance work load Spread Prospects, Opportunities and Customers

evenly Improve forecast accuracy Improve win rates Align sales capacity with market potential

Territory Design Process

Step 1

Baseline Current Perf

Step 2

Analyze Existing

Customer Spend

Step 3

Determine Market

Potential

Step 4

Map Prospect / Customer

Data to Territories

Step 5

Produce Territories

Step 6

Review and Refine

Assignment

Objective Establish a sales territory design that optimizes and aligns sales capacity with

market potential

Step 1 – Baseline Current Performance Best Practice to analyze and understand by Territory/Rep:

1. Win Rate – Understand and measure this in the future

2. # of Opportunities

3. Pipeline Revenue Forecasted

Understand Quota Attainment impact on rep by rep basis

Account Region Account Executive # of Opportunities Pipeline ($

Millions)

Forecasted

Pipeline Revenue FY11 Quota Gap ($) Gap (%)

Asia Pacific Rep 1 11 $41.0 $13.1 $13.5 -$0.4 -3%

CALA Rep 2 6 $11.1 $3.5 $1.3 $2.2 172%

Rep 3 27 $37.8 $12.1 $39.0 -$26.9 -69%

Rep 4 7 $46.0 $14.7 $10.4 $4.3 42%

Rep 5 11 $24.5 $7.8 $10.4 -$2.6 -25%

Europe Rep 6 9 $18.9 $6.1 $7.8 -$1.7 -22%

India Rep 7 7 $16.4 $5.3 $13.0 -$7.7 -60%

Rep 8 17 $19.3 $6.2 $5.0 $1.2 23%

Rep 9 20 $41.8 $13.4 $52.0 -$38.6 -74%

Rep 10 14 $65.9 $21.1 $20.0 $1.1 5%

Middle East/Africa Rep 11 7 $18.9 $6.0 $10.0 -$4.0 -40%

Rep 12 3 $11.3 $3.6 $12.0 -$8.4 -70%

North America Rep 13 10 $5.2 $1.7 $7.8 -$6.1 -79%

Rep 14 19 $16.7 $5.4 $14.3 -$8.9 -63%

Rep 15 12 $14.5 $4.6 $7.8 -$3.2 -41%

Rep 16 3 $4.7 $1.5 $11.0 -$9.5 -86%

Rep 17 10 $18.9 $6.0 $11.0 -$5.0 -45%

Key Account Rep 18 2 $1.5 $0.5 $3.9 -$3.4 -87%

Grand Total 195 $391.8 $125.4 $325.3 -$199.9 -61%

Step 2 – Understand Spend by Customer

(1) Total Sales (USD) Captures multi-year customer spend

Significant change in Median Customer Spend at the 1,000 employee threshold and again at 2,000 employees

Phase 3 – Prospect DB – Build Steps Evaluate Existing Customer Spend

Cut by multiple level and layers

1. Revenue

2. Industry

3. Geography

4. Number of Employees

5. Number of Locations

Determine what “Drives” the spend. As you review data, ask yourself which of the firmographic elements above show a high affinity towards higher spend

Step 3 – Build and Forecast Prospect Potential DB Prospects included based on:

# of Prospects x Customer Spend = Territory Potential

Step 3a – Forecast Spend Potential Evaluate customer potential in relation to Total Prospect Employees

Step 3b – Forecast Spend Potential Future iterations should include added precision of:

Potential spend by Revenue

Step 3c – Forecast Spend Potential Future iterations should include added precision of:

Potential spend by # of Subscribers by Operator by Country

Example of Brazil

Phase 3d – Final Forecast to Predict Potential

Company (Prospect)

Annua l

Rev

Number of

employees Customer Size Bucket

Forecasted

Sa les

Amp Group Holdings Limited 963$ 2,014 >=2,000 Empl $ 587,193 Pgg Wrightson Limited 954$ 1,995 >= 1,500 and <2,000 Empl $ 277,170

Goodyear Tyres Pty Ltd 924$ 1,937 >= 1,500 and <2,000 Empl $ 277,170

Dp World Holdings (Australia) Limited880$ 1,852 >= 1,500 and <2,000 Empl $ 277,170

Tbp Group Pty Ltd 872$ 1,836 >= 1,500 and <2,000 Empl $ 277,170

Bandelle Pty Limited 872$ 1,836 >= 1,500 and <2,000 Empl $ 277,170

Suncorp-Metway Ltd 8,592$ 16,953 >=2,000 Empl $ 587,193 Manningtree Investments Pty Limited859$ 1,811 >= 1,500 and <2,000 Empl $ 277,170

Input data to regression. Use if R-

Square is >65%

How to read a regression

equation, then use formula to predict sales

$- $50,000 $100,000 $150,000 $200,000 $250,000

10

20

40

63

90

130

200

244

308

403

550

790

1135

1600

2000

2900

3969

5928

8563

14900

34726

85960

Annual Customer Spend

Cu

sto

me

r Em

plo

yee

s

Customer Employees vs. Customer Spend

Total Employees Linear ( Total Employees )

Step 3e – Peak Performance Replication

Stretch Frontier

80th Percentile Frontier

Step 4 – Map information to territories Territory Pot = Existing Customer Base + Pipeline + Prospects

Overlay 3 Components and remove duplicates

Produce Territories with concise geographic boundaries:

Territory Rep # of

Opportunities

# of

Prospects

#

Customers

Total Territory

(# of accounts)

Territory Size

($M Potential

Spend)

Terr #1, N.

America John Smith 71 432 12 515 $192.0

Step 4a – Produce Balance Territories

Phase 4b: Optimizing Territories 141 customers selected (Blue Zips highlighted)

Geographic Analysis shows that 141 customer are in targeted area.

Note that you can change Territory boundaries by dragging and

dropping.

Step 5 – 6: Produce and Refine Territories Understand Potential Distribution

Prioritize Accounts in each Territory

Best Practice: Assure reps with largest work capacity and historical win rate get largest Territorial Patch

Know Prospect density

Heat Map Identifying Opportunities + Prospects by Geography

Input to: Territory Sizing Calculator

Data

Assumption

Territory design calculator

Sales Territory Design Questions

1. Have you segmented your existing customer base?

2. Do you understand what drives customer spend?

3. Have you used customer spend knowledge to flesh out market potential?

4. Does your knowledge of the above impact forecasting accuracy?

5. Are your territories balanced?

Questions can be sent directly to:

Bryce.Record@salesbenchmarkindex.com

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Further interest….