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Rethinking Sales Territories

Posted by Trish Bertuzzi on Thu, Jun 13, 2013

I consider myself a fairly traditional Sales Manager – in that I generally don’t think “new” equates to “better.”

In terms of Sales Territories, I've always believed in the need for defined territories. My reasoning being that they create focus and accountability. (That and the fact that they're a hedge against most in-fighting between reps).

But the times they are a’ changing and so is my thinking.

Although I’ve been dubbed the “Godmother of the Outbound Mafia” (thanks to Craig Rosenberg for the title), I do recognize that the ripple effects from inbound marketing and social prospecting need to be addressed.

Equitable territories are as simple as Rubik's cube.

Territories can be carved up based on potential, but not on interest. Market dynamics don't respect the neat lines we’ve drawn on a map. Although Marketing would love to ensure even lead distribution - it just doesn’t happen.

Rather than building in complexity to compensate for unfairness, I'm seeing companies begin to move away from traditional (line in the sand) sales territories.

I want to share 3 examples of companies that have rethought conventional wisdom.

Silverpop: Function & Segment

Silverpop has done something really interesting with their Demand Generation team. First, they've segmented them into inbound and outbound. Inbound Reps receive leads round-robin. Second, outbound reps are aligned by market segment: enterprise, mid-market and smb.

Bruce Field, VP Sales & Demand Generation of Silverpop provides more detail:

Attempting to fairly assign targeted performance goals and distribute inbound lead volume to Demand Generation teams can be problematic. A reliance on strict geographic territories usually leads to some individuals receiving low volumes with an inability to achieve goals despite skill and effort while others may achieve their goals too easily.

Utilizing a round robin approach has allowed us to create a truly level playing field and provides greater visibility onto our star performers.

HootSuite: Named & Pool


HootSuite has taken the no-geo territories philosophy all the way to their sales team. Inside Sales Reps are assigned 250 accounts across geographies. All other accounts are kept in a pool which can be prospected into by anyone. The ISRs can own a contact but not the account until an opportunity is created.

Darren Suomi, VP Sales of HootSuite provides more detail:

Geographical territories tend to be unfair in how they are cut up as they usually have a concentration of certain types of customers. (i.e. NY & CA typically do better for Technology and Media). Our strategy addresses that issue.

An added benefit is that if a rep has a particular expertise from past experience they have the freedom to explore it without having to be boxed in by a territory. We also believe that referrals are key to expanding business. If a rep gets a referral from a client they are free to run with it vs. having to pass it to another rep. There is sense that a rep needs to be on the ball and not miss out on an opportunity by ignoring non-named accounts. By knowing that other reps can go after accounts there is more urgency to get to them. 

Net/net: As a new industry, the market dictates a lot of where we go so we are trying to be fluid and have the ability to adapt quickly vs. being slow moving and boxed into a certain way of doing things.

ConnectAndSell: Pool [squared]

ConnectAndSell has taken a truly iconoclastic approach. First, they have no Lead Gen team front-ending the sales process. All leads go directly to Sales.

Second, there are no territories. From an inbound perspective the leads are queued in a lead pool that the reps can pull from to build call lists. From an outbound perspective, prospect accounts are pooled and reps can reach out to any subset in which they have interest.

To me, this approach reads, “You don’t own a patch or a bunch of accounts. You own a revenue quota – good selling!

Mark Godley, VP Market Development of ConnectAndSell provides more detail:

We were pretty nervous about throwing out conventional wisdom and designing an unorthodox market coverage strategy.

I’m happy to report that we now have an amazingly dynamic methodology in place that allows reps to pursue territory potential as they wish while also optimizing market coverage for our company. It has worked far beyond our expectations and bookings are up hugely as a result.

So there you have it.

For some time, I’ve been revisting the conventional thinking around territories.

Don’t get me wrong, no system is 100%. A critical success factor for each of these organizations is having a strong technology infrastructure to support, monitor and report on account ownership.

So maybe I'm no longer such a traditional Sales Manager. I’m attracted to the idea of thinking higher and bigger than the day-to-day. And where possible and necessary, coloring outside the lines.

So what do you think? I would love to hear from real practitioners about what you’re doing. If you run an inside sales team, how are you bending the old rules? Educate us. We are all part of the inside sales community!

PS – Many, many thanks to Bruce, Darren & Mark for sharing!

(Photo credit: Risk by Scott Hamlin) 

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We follow a named account model with geographic reasonableness for our enterprise (outside reps), and a named account model for our inside reps. 
Each inside rep can hold X humber of accounts, and each enterprise rep holds X number of accounts, and the remaining accounts are left in a 'pool' where anyone can prospect. In order to pick a name out of the pool, a rep must drop off another name to 'trade off'. 
WHen leads come in, they are allocated by the inside sales manager to an inside rep, who qualifies the lead. Once the lead is ready to be 'handed off' - it goes to an enterprise rep - as assigned by the ISM

posted @ Thursday, June 13, 2013 8:50 AM by Tyler Hogge

I certainly agree that "new" doesn't usually mean "good". One thing Mark Godley didn't mention is a downside of ConnectAndSell's radical approach - increased salesperson angst - which the company tries to counteract by providing unlimited one-click conversations on demand. It's a tradeoff that generally seems to work - you don't get a patch, but you don't have to do any grunt work to get someone on the phone either. In our case, I don't think we would have gone all the way - especially eliminating the whole idea of a Lead Gen team - if our sales reps were still doing old-fashioned dialing (and not smiling) instead of just clicking and talking.

posted @ Thursday, June 13, 2013 8:52 AM by Chris Beall

Great article here, Trish. It's got me rethinking the way my team is broken down. Currently, we have 6 ISR's that each have their own territory, and sell into our 6 verticals. For our larger Senior Care brand partners, ISR's own an entire brand. This has been working great because the team is small. 
However, as we grow (I'm hiring by the way, plug-plug!), it poses a problem. Let's say I grow to 15 ISR's. That means each ISR owns 3.3 states. That's not really the way to go! Your case studies here have really given me a lot to think about in terms of how I'll segment my team in the near future. 

posted @ Thursday, June 13, 2013 8:54 AM by Chris Snell

Trish - one that comes to mind is Network Hardware's assignment of leads based on social proximity. It requires a large enough sales team and a person dedicated to researching online and offline social connection by strength. Sales Benchmark Index does these sorts of heavy duty, well planned social selling initiatives. They are a ton of work - literally many full time people in some cases - but can yield extraordinary benefit in using existing credibility to earn the right to start a buying process. Very cool stuff for some forward thinking larger companies.

posted @ Thursday, June 13, 2013 9:30 AM by Steve Richard

I was wondering who was going to be the first to mention social territories and "ding" you win Steve! 
In our opinion we are not there yet. As you said, you do need significant man power to truly understand the value of the social relationship (although there are technologies being developed that will score the value based on real world interaction as some point). 
Matt and I had this conversation yesterday and he made a great point. To quote him "I have social connections with people I would not have a beer with. Yet, if Bob's child needed a kidney I would give it to him and we don't interact on social networks." 
I can't wait for social scoring to become a reality because then I think we will see yet another change in how territories are defined. We do live in interesting times! 
Thanks for bringing this up Steve! 

posted @ Thursday, June 13, 2013 10:25 AM by trish bertuzzi

There are also some factors that need to be considered for sales teams that sell primarily through their Channel Partners/VARs (indirect). We've seen success with our Inside Sales team being assigned to geographies because of the relationship building and consistency they're able to establish with the individual channel reps in their territory. As we look to promote our ISRs to Regional Account Manager (field sales) positions, this can help smooth their transition (especially in those instances where their Inside territory becomes their Outside territory). Of the companies listed in this article, what percentage of their sales are Direct vs. Indirect?

posted @ Thursday, June 13, 2013 10:37 AM by Mark Scheinkoenig

Thanks Trish. Do you know how these three are handling lead/account assignment in non-English markets such as EMEA?

posted @ Thursday, June 13, 2013 10:38 AM by Josh

@josh and @mark 
Let me reach out to these companies and get you answers. Thanks!

posted @ Thursday, June 13, 2013 10:41 AM by trish bertuzzi

@ Josh - our company does not currently sell into EMEA directly, although we have a number of U.S. based companies that bring our technology there. As a result, we have avoided the complexity of different languages and cultures that could throw a monkey wrench into our model.  
@ Scheinkoenig - 90%+ of our sales are direct so the channel was not a big concern in our design. One unexpected but very compelling outcome of our process has been that some ISVs heard about what we were doing and wanted to implement something particular for leads they were providing to the channel. These ISVs shared the frustration of assigning leads to Channel partners only to have them not worked...or used to sell products of other vendors. So we built into our product the concept of 'lead pooling' that would allow these ISVs to maintain ownership of the leads and the VAR only gets access to them during a qualifying conversation. This situation is only applicable when the ISV is providing the leads to the channel and not the reverse.

posted @ Thursday, June 13, 2013 4:23 PM by mark godley

@Josh Thank you for your question. We have a Demand Generation team in EMEA based in London. We handle the leads in a similar fashion to the US with a twist. English speaking leads are assigned in the same round robin fashion to our English speaking Demand Generators. However, we also utilize a waterfall assignment process where if a lead is identified as German, it is directed to our German speaking Demand Generator. If you have more than one Demand Generator for a specific language, you would round robin the assignment within that subset. Hope this helps. 

posted @ Thursday, June 13, 2013 4:33 PM by Bruce Field

@Mark Scheinkoenig We are primarily direct sales. We do have an indirect channel (Agencies) and we have a dedicated team focused solely on this channel. Thanks.

posted @ Thursday, June 13, 2013 4:47 PM by Bruce Field

@Josh Yes we have EMEA based reps. The team is broken out by country and where we have multiple reps in one country we have rolled out a similar approach where we will name accounts (Vertically if possible) and then have a system where they get round robin leads in non named accounts and they are able to proactively go after non named accounts also. Hope that helps

posted @ Thursday, June 13, 2013 4:50 PM by Darren Suomi

@Mark We do business direct and with partners. When we are establishing new partners in new geographies we will typically assign one rep to ensure that the relationship starts off right to explore how well the partnership will work out and so the partner does not have to deal with a hundred different reps. As the partnership evolves they will fall into our regular plan. Others have mentioned there is no perfect way and I agree. Right now this works for us and we are always revisiting the way we go to market to take advantage of a dynamic marketplace. Partners will have a big effect on this and you have to determine what factors are the most important in the model and align with those.

posted @ Thursday, June 13, 2013 4:56 PM by Darren Suomi

Trish - Coming back to aligning territories by social proximity, I see some simple opportunities for making this possible, especially on the Inside sales side. Start by letting the reps have 20% of their accounts come from a pool that is available based on social connections. The reps get to chose those accounts, but must they have 2 first or second degree connections to the decision makers or influencers. They will self select who they think they can reach. The goal here is knowing that trusted relationships are a necessary but not sufficient part of any sale, then we are able to best leverage the networks of our sales team to create opportunities quickly. Today's geography or vertical don't align with the value fo the social connections (used to be called the Rolodex) which properly leveraged can shorten sales cycles and increase overall sales productivity.

posted @ Tuesday, June 18, 2013 3:22 AM by Cliff Pollan

Great Article Trish! At Brainshark, we moved to a new model at the begining of 2013. Inside Reps share Inbound Leads through a round Robin process, each rep is then are assigned 100 accounts across a geography. We review the geographic accounts quarterly and add to the list if necessary. inbound lead flow has been consistent among the team and we have increase our outbound efforts to drive new business.

posted @ Wednesday, June 19, 2013 8:46 AM by Daniel Donovan

Love it Dan! We will add Brainshark to the list of forward thinking companies!

posted @ Wednesday, June 19, 2013 8:55 AM by trish bertuzzi

Great post on territories. One of my favorite data points in the Call Score application we use is "Days Since Last Presentation". Combined w Work Flow Rules, its easy to manage how many contacts we expect in a given time period (Call Count) and the date of the last meaningful contact. I find that reps tend to have too many leads in their pipeline. We can accomplish accountability with improved phone activity reporting.

posted @ Wednesday, August 28, 2013 12:41 PM by Rich Rosen

Maintaining a sales strategy, we should also take care about the territories and demographics of the specific location, area and region to cultivate more sales options and also you can have a know how about your product that what are the target consumers on which you have to invest upon and consider age groups for more relevancy.

posted @ Monday, September 16, 2013 1:19 AM by Executive Selling Training

Coming across your article, Trish, was just perfect because I too am involved with a sales territory software company within the marketing department. The software itself provides an easy and effective way to do sales and to find leads. The list above and us here at Badger are shooting for the same goal, providing companies and easier way to find what they are looking for.

posted @ Monday, October 14, 2013 11:56 AM by Huong

Great points inside sales! As a founder of startup I think that some part of work in sales and marketing should be outsourced. You can make a smaller investment to building your marketing plan until your growth provides the cash flow needed to hire more permanent staffing. Also, you often need the expertise of more knowledgeable professionals providing strategic growth plans and your budget doesn't not allow for that level of investment for the long term. I was working Ignite It seems to be reliable and competent company.

posted @ Wednesday, April 02, 2014 12:43 PM by Lilia MacCannell

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