It’s Q4 for most of us, and this is the time of year when revenue operations professionals spend time understanding and redefining sales territories. Sizing territories alone is next to impossible to do by hand, and the tedious process of narrowing down all of the possibilities is expensive, time consuming, and error prone. Even after you’ve discovered your Total Addressable Market (TAM) in every territory and honed in on select targets, you still have to ensure that your sales and marketing efforts are aligned in pursuit of the targets you’ve selected. While there are a variety of prospect/customer segmentation tools available to ease the process, there remains a major obstacle in optimizing the right segments and efforts – getting territories right.
How do we assign sales reps their territories, fairly and effectively? Do we base it on the number of accounts in each region? The number of accounts we think we can close in each region? How do we ensure that one rep doesn’t own all the fruitful accounts while others get stuck with stagnant accounts? We want to assign territories that are productive, but also not overwhelming – avoiding instances where teams try to manage so many accounts that should close, but fail to close (or take too long to close), due to a lack of the prioritized sales efforts necessary to effectively close the right deals in a timely manner.
Traditionally, determining territories is done with tedious math on spreadsheets, using a lot of guesswork and assumptions about which accounts might be in a certain region and how much they might be worth, but it doesn’t even amount to a gamble when you don’t truly know your TAM from the start. Let’s look at 5 steps to what we call Moneyball for Sales Territory Management:
Step 1: Map your Global TAM and understand the total number of companies fully available to your product opportunity.
Step 2: Define your Ideal Customer Profile (ICP) and search globally against companies meeting that criteria.
Step 3: Define your whitespace by merging your current Customers into your ICP file – always including prospect or customer type – in order to understand how much of TAM is penetrated and for context of best customer lifetime value.
Step 4: Size your Account TAM by either using a simple approach like your average deal size, a more advanced progression of land/expand and lifetime revenue, or by using analyst projections on the size and spend projections.
Step 5: Test your current territory model by applying your current territory boundaries/definitions to the overall file and look at the results, adjusting staffing, quotas and boundaries as needed. If starting from scratch or looking for a next territory, analyze whether the traditional geographical, industry concentration, company size concentration or a combination makes the most sense for delineating equitable territories.
Bonus Step: Prioritize account assignments by tiering accounts into categories by closeable odds (the right accounts) and accounts that are showing intent and engagement (the ready accounts).
Again, if you’ve tried this before you know that doing each of these steps by hand is incredibly tedious and can take weeks or months of work. As you might suspect, there are tools available to facilitate the process and automate the majority of the tasks.
Perhaps the most difficult step to do by hand is the first step – discovering and mapping your global TAM. The most practical tool available for TAM discovery would be a Customer Data Platform (CDP) with embedded third-party data sources. Using a CDP’s embedded data opens you to a world of profiles for people, companies, and accounts that you can leverage from the start, then leverage against your ICP and hone in by demographics, firmographics, tech install, and more. Additionally, with the right CDP solution, you can utilize AI predictive models to filter your TAM further by technographics, FIT, and intent. This enables you to plan territories beyond the numbers, locations, and company size of accounts by algorithmically determining who is likely to close and where to focus your marketing and sales efforts – making the process of assigning territories fairly and effectively much, much easier.
In short, assigning territories is no easy task, but with the right tools, you can do it faster and better than ever with the assurance that your decisions are backed up by data. Our next blog will dive into the first two steps of moneyball territories – your TAM and ICP.
To learn more about how Leadspace buyer data platform can guide your territory assignments – watch this webinar on Best Practices for Improving Sales Territory Management , and get on the fastest road to revenue.
