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  • Writer's pictureEric Heine

How to Use Territory Planning to Identify the Path to Quota Attainment, Part 2 of 4

Selecting and Categorizing Accounts.

Continuing our four-part series on how to effectively use Territory Planning to identify the path to attaining bookings quota, we will now go a bit deeper into the first three items on my list of eight core characteristics of a sound unified territory planning process. See Part 1 for the complete list.

  • First and foremost, the territory planning process forces the sales rep to THINK, deeply, about accounts, product & service mixes, which opportunities to pursue, and more;

  • The territory plan enables reps to identify the accounts which are most likely to yield the opportunities that will help them attain quota;

  • It allows the sales rep to categorize accounts based on the a set of criteria that will inform the selling approach for each account.

The Importance of Thoughtful Diligence

Too many organizations still rely on “activity” as a proxy for sales rep performance, and manage to metrics like ‘x’ number of call reports per week, or similar. This even happens among enterprise sales teams. But activity for the sake of activity -- often because a sales organization doesn’t know what its reps should be doing -- is not the right approach. This is especially true where deal sizes are large, selling cycles are long, and a high-frequency activity cadence is, at best, unhelpful, and at worst, may aggravate customers and interfere with the natural flow of the sales cycle.

I understand that sales reps are expensive resources, and no company wants to see reps sit idle, waiting for the phone to ring. But activity is only helpful if it is the right activity, and we can only know if an action is the right action if we invest the time and effort to really think about what we are doing.

By “thinking”, what I really mean is thoughtful diligence -- that is, doing the heavy-lifting of researching accounts and contacts: uncovering their desired business outcomes and the business problems that stand in the way of achieving them, learning about their culture, understanding the industry context in which they operate, figuring out which of your competitors might already be in the account, or even trying to discern the buying and negotiating tactics they employ. Plus a dozen other things or more, and then deciding what that all means, in terms of prioritizing account and opportunity focus, determining what product and service mix best fits each account, figuring out to whom to sell, and how, in each account, or how to align the value proposition you communicate to your customers to the specific business outcomes they are each trying to achieve.

Only by investing the time and effort to do the research and analysis -- the “thoughtful diligence” -- can you truly know if the activities that will comprise your action plan are the right activities. This applies, by the way, not just to Territory Planning, but equally well to Account, Opportunity, and Close Planning. And, in general, to most aspects of selling.

Eschew the old expression, “Don’t work hard, work smart.” Instead, embrace the variation on that theme that your top performers already exhibit: “DO work hard, BUT ALSO work smart.” It will pay dividends in improved win-rates, larger average deal sizes, shorter sales cycles, and happier customers.

Identify the “Right” Accounts

The size of territories assigned to enterprise sales reps can vary significantly from company to company, based on a number of legitimate criteria, including the size of the total addressable market, what percentage of market share a company owns, the length, complexity, and deal size of average sales cycles, and more. But for most companies, especially growth stage companies, the universe of potential prospects and customers will yield territories containing more accounts than a rep will actually be able to sell into during a given selling year. Unless a sales rep is working in a named-account / global account manager role, where a rep may really only own one or two accounts, most reps will need to start their territory planning process by looking at the total set of accounts in their patch, and narrowing focus down to a subset of accounts, say, 25-30% of the total accounts in the territory, that actually have the potential to contribute meaningfully to quota attainment in the upcoming selling year. Of course, accounts outside this subset may still be sold to on an opportunistic basis. Who doesn’t love the occasional bluebird?

Determining which subset of accounts to focus upon is a tremendously critical step, because it will drive much of a given sales rep’s activity in the year ahead. Getting this part wrong can send a sales rep chasing shadows instead of accounts that are ready to buy, at sufficient scale. Making this assessment requires industry and account research and knowledge, and may include factors such as how far along a given account is in its product or technology refresh cycle, or whether there is a compelling event (such as a new regulation) that may force a company to buy something this year. It also includes basic account profiling activity that will help a rep understand whether a given account is likely to be able to afford the product or services he or she is selling, and whether the size of any potential deals in the account are big enough to move the quota attainment needle in a meaningful way.

Whether the sales rep is conducting this research and analysis solo, or in partnership with an assigned Business Development Rep (BDR), this is not the territory planning step to short-change. This analysis requires time, effort, and thought.

Categorizing Accounts

A good territory planning process provides a means for categorizing accounts, as well. How one chooses to categorize accounts depends on one’s goals for their territory -- which are hopefully aligned with the sales incentive compensation plan! For someone selling into a particular vertical, one might wish to categorize accounts by industry sub-segment, especially if there are material differences in messaging, product mix, value proposition, sales cycle complexity, or average deal size across sub-segments. For example, within the financial services vertical, there are quite significant workflow and business outcomes differences between the Capital Markets, Insurance, and Retail Banking segments, to name a few. Each of these may be characterized by very different sales cycle durations, product and service mixes, and average deal size.

On the other hand, territory goals may not relate to vertical focus so much as revenue expansion, revenue retention, or net-new logo acquisition. This is especially true among growth-oriented companies. Therefore, categorizing accounts as, for example, “Get”, “Grow” or “Keep” accounts may be a more appropriate method for companies whose reps sell across verticals. One may even have a category of accounts to “Shed” -- remember, it is sometimes okay to evolve away from certain account types based on profitability or other strategic criteria.

There are a number of possible methods of categorizing territory accounts beyond these two examples. The key concept is that the territory planning process and attendant territory plan must provide the means for categorizing accounts.

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About the author

Eric Heine, Founder of Growth Point Solutions LLC, draws upon over 25 years experience in marketing, sales, service, and IT leadership to advise C-level executives and boards of directors of growth-stage companies, as well as growth-equity investors, to help organizations develop, refine, and execute the revenue strategies that power significant, sustainable year-over-year growth.


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