territory planning SPM header


- 2 min read

Challenges of territory planning in Sales Performance Management

Inefficiently mapped territories are one of the leading causes of missed opportunities and high rates of attrition in sales organizations globally. With outdated tools and processes, many Sales Leaders are left to map their sales rep’s territories manually, often leading to inequitable territories that do not offer equal opportunity. 

Without equitable territories, some sales reps will have many more accounts to handle than they have the bandwidth for. In these territories with a huge opportunity, sales reps can opt to handle the “easy” accounts first, rather than investing time in accounts that have a potentially high value but might require heavier lifting. With their quotas steadily in reach, these sales reps can hit their numbers without the added hassle of handling those more laborious deals, leading to potentially high value accounts being overlooked. Meanwhile, for the territories that have a lower opportunity, sales reps will sit idle, miss their quotas, and possibly look to leave the organization. 

The problems with conventional territory mapping 

So, why not map the territories equally?

Unfortunately, it isn’t that simple. Territory mapping is a very arduous and time-consuming task; one that involves a highly efficient tool and an accurate valuation system of the accounts, in order to divide up opportunity equally among your sales reps. The manual mapping of territories is very cumbersome and error prone, especially when over 82% of organizations depend on Excel spreadsheets for their territory design. 

Though a tried-and-true application, mapping territories in Excel often leads to inefficiencies, as spreadsheets grow lengthy and messy quickly. Excel lacks visualization capabilities to experiment with different territory designs and doesn’t provide access to scaled analytics. Plus, with frequent updates in Microsoft office and a lack of flexibility to develop spreadsheets in real time, it becomes nearly impossible to scale these sheets as an organization grows. 

In addition to using antiquated territory planning tools, many organizations are deficient in a proper valuation system for their sales accounts. To save time and money, Sales Leaders often opt to distribute their accounts into territories based on physical space and geographic region. However, this is a quick fix for a process that requires a much more thoughtful distribution based on account value rather than location. 

In order to disperse accounts into equal and efficient territories, Sales Leaders must compile all valuable and relevant information to their customers in order to create an algorithm that can score their accounts accurately. From there, with the right information, each account can be scored based on their value and divided up evenly so that each territory provides an equal opportunity for that sales rep to make money. To build the right value algorithm, your sales division must conduct the proper market research to build a detailed image of the target market, while considering relevant factors such as demographic, firmographic, geographic and revenue-based information about the accounts. 

Investing in the right SPM and territory mapping software 

Most organizations rely on Excel and a CRM system in order to map their territories. Unfortunately, this is often not enough to map truly equitable territories for their sales reps. As a complement to your CRM, Sales Leaders should invest in formal territory mapping software to automate much of this taxing process and create equal territories to optimize their sales rep’s efficiency. 

Today, many sales organizations are experiencing the dreaded inverted bell curve phenomenon regarding their sales rep’s performance. Where most statistical instances result in a normal bell-shaped curve, Sales Leaders are seeing a high number of outliers on both the high and low ends of the performance spectrum; with many reps going above and beyond their quotas, many reps not coming near their quotas, and few in the middle. This could be caused by several different reasons, perhaps a poor incentive compensation plan, inefficient target marketing, or even company culture. But, most likely, this is the cause of inefficient territory mapping, and will lead to high turnover rates in your sales division if not resolved. 

There are extensive challenges that come with territory mapping. In order to design your territories so that they offer equal opportunity and combat these challenges, a Sales Leader needs access to the right information and the right tools. 

Board’s SPM Platform is ideally suited to solve many issues that Sales Leaders face every dayLearn more about how and why in Dresner’s 2020 Wisdom of Crowds® Sales Performance Management Market Study research paper, where Board was recognized as #1 SPM vendor. 

Be the first to comment on this post

Your email address will not be published. Required fields are marked *

Dresner Advisory - Sales Performance Management Market Study 2020

Download the full research paper to learn why Board is recognized as #1 SPM vendor