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  • Writer's pictureEric Heine

How to Use Territory Planning to Identify the Path to Quota Attainment, Part 3 of 4

Finding, Sizing, and Representing Opportunities on the Territory Plan.

In the second part of this four-part series on how to effectively use Territory Planning to identify the path to attaining bookings quota, we talked about focus account selection and categorization. Here, in this third installment, we will explore items 4 through 6 on my list of eight core characteristics of a sound unified territory planning process, which relate to finding, sizing, and representing opportunities on the territory plan. See Part 1 for the complete list.

  • It helps reps understand what product / service mix they may best try to sell into each account;

  • The territory plan identifies the specific opportunities a rep believes are available to prosecute within his or her territory;

  • The plan requires the sales rep to assign some level of probability to each opportunity on the plan, and to do so in a consistent manner across opportunities;

Finding Opportunities

Once we know which accounts we think we can count on to make our year, and how we want to segment them, we need to identify specific opportunities in those accounts, estimate the dollar size of those opportunities, and represent them on the Territory Plan at a reasonable probability of close. The process of finding opportunities within territory accounts begins with determining what products and services we should try to sell into each account on our territory map.

Of course, there are many factors that bear on determining the “right” product and service mix to sell into any account. But for the purpose of annual territory planning, we need to look at the problem through the white-space analysis lens, with a time filter applied. Specifically, we are trying to determine what products and/or services each account could reasonably buy during the upcoming selling year.

To determine this, we need first to understand what products or services an account may have already purchased from us, and assess whether there is any upsell potential in those areas during the upcoming selling year. If so, each of those may become an opportunity on our sales rep’s territory plan.

Next, we need to assess the propensity of an account to buy net-new products or services we offer. To do this, essentially, we construct an account white-space map, wherein we look across the full range of our products and services not currently purchased by the account (i.e., the “white space” within the account), and for each such product or service, ask, “Is there reason to believe that this particular account would purchase this particular product or service during the upcoming selling year? If so, why?”. To answer that, we need to examine factors such as:

  • Is this product or service a fit for the account based on industry, business model, or some other factor?

  • Will this product or service help the customer solve a business problem, execute a mission-critical function, or achieve an important business outcome?

  • Is the benefit provided by this product or service likely to produce a strongly positive ROI for this particular account?

  • Is this customer likely to want to buy this particular product or service during the upcoming selling year?

For each net-new product or service where we can answer “yes” to the question, “Is there reason to believe that this particular account would purchase this particular product or service during the upcoming selling year?”, we have potentially identified an opportunity to pursue in the upcoming selling year. Together, for a particular account, these become inputs to the Account Plan (to be discussed in a future blog post). In aggregate, across all accounts in a given sales rep’s territory, these opportunities represent the set of known deals the rep is going to pursue in the next selling year.

Importantly, whenever we do white-space mapping to help identify opportunities on the territory plan, it is essential to apply a time filter that constrains what we represent on the territory plan to just those opportunities that are likely to have close dates falling in the upcoming selling year. White-space opportunities falling beyond the end of the upcoming selling year should still be noted in the Account Plan, of course, and may well become fodder for next year’s or some future year’s territory plan, but should not be counted toward the territory plan for the immediately-upcoming selling year.

Sizing Opportunities

But it is not enough to simply know what we want to try to sell to whom and why. That will not answer the essential question, “Can I make my number?”. To get to that answer, we need to augment the way we represent these upsell and net-new sales opportunities on the territory plan by including deal size estimates and probability of close designations.

Estimating potential deal size for opportunities at this early point -- remember, we are building our territory plan somewhat before the selling year begins -- this is part art, and part science. The balance between those varies depending on what kind of products or services a company sells, how customizable or configurable they are, how they are priced, the quantities potentially involved for any given account, etc. Analysis of comparable prior deals, supplemented by any available knowledge of a given account’s buying and negotiating habits, can help us zero in on a bookings-value estimate for each opportunity, but at the end of the day, it is still largely “best guess”-level estimating when putting a territory plan together. The exception to this, of course, comes from in-flight opportunities of known size, that have defined close dates falling in the selling year for which we are preparing when we create the territory plan. In any case, however, every deal on the territory plan *must* have some semblance of a deal-size estimate, in order to support calculations on the value of the territory overall, which will be a primary indicator of potential for quota attainment. It should be understood that it is best to err on the side of being conservative when estimating deal sizes, as we are trying to build a plan that gets us to or above quota, rather than one that leaves us falling short of quota if deal sizes shrink a bit here and there.

Representing Opportunities on the Territory Plan

Once we have opportunities identified, and “sized”, a probability of close must be assigned to each opportunity, so we can look at the territory overall, and assess its aggregate value in terms of expected revenue, as compared to the bookings quota. Understanding, again, that we are performing this activity prior to the start of the selling year, it is not necessary to get as granular as one would in managing actual deals in a pipeline, where we might see eight to ten pipeline stages in a sales process, each with their own corresponding probability of close. Rather, for the purpose of territory planning and assessing territory value against quota, it is more useful to think of opportunities in big buckets -- as low, medium, or very high probability deals -- corresponding to:

  • “Opportunities we *believe* will arise”;

  • “Opportunities we know about”; and

  • “Opportunities we have won”.

I call them “Perceived-Need Opportunities”, “Defined Opportunities”, and “Closed-Won Opportunities”, respectively -- the latter, of course, used only when deals actually close, such that coming into a selling year, all deals on the territory plan are either “Perceived Need” or “Defined Opportunities”, but once the selling year is in progress, deals may progress from Perceived Need to Defined Opportunities, or from Defined Opportunities to Closed-Won Opportunities.

Your choice of opportunity types may vary -- you could choose to have four types instead of three, for example, depending on your business and how you want to analyze territory potential -- but in any case, the point is to keep the number of opportunity types on the territory plan smaller and simpler than what you would typically have as pipeline stages in your sales process.

Once this small number of territory types is defined, a percentage probably-of-close value must be assigned to each opportunity type. For example, let’s say we use probability values like this:

  • Perceived Need = 15%

  • Defined Opportunity = something like 33% or 50%*

  • Closed-Won = 100%

*Note that I generally like to use the historic win-rate percentage for qualified deals as my Defined Opportunity probability when building territory plans. If we usually win one of every three qualified deals, I would use 33%. If we usually win every other qualified deal, I would use 50%. The exception to this is that even if we usually win more than half of qualified deals, I would be reticent to specify a probability greater than 50% for the Defined Opportunity stage on territory plans, as part of the art of territory planning is being conservative.

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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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