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  • Writer's pictureEric Heine

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

Assessing Territory Potential Against Quota.

In the first three parts of this four-part series on Territory Planning, we identified 8 core characteristics of a sound unified territory planning process, talked about Focus-Account Selection and Categorization, and explored approaches to finding, sizing, and representing opportunities on the territory plan. In this final installment, we will look at the last two items on my list of eight core characteristics of a sound unified territory planning process. See Part 1 for the complete list.

  • The territory plan calculates quota attainment potential in terms of expected revenue, not just total deal size;

  • It becomes a living document that answers two key questions -- “Can I make my number in the upcoming selling year?” and “Am I still on track to make my number during the remainder of the selling year?”

Assessing Territory Potential against Quota

Once we have big-bucket opportunity types and corresponding probabilities defined, the expected-revenue value of the opportunities on any given sales rep’s territory plan can be calculated as:

Territory Value = (Oppty Size of Deal 1 * Probability of Deal 1) + (Oppty Size of Deal 2 * Probability of Deal 2) +...+ (Oppty Size of Deal n * Probability of Deal n)

This sum represents the total bookings we can expect the sales rep to produce in the upcoming selling year, based on the opportunities on his or her territory plan, and is the essential answer to the question, “Can I make my number?”.

Divide this number by the rep’s bookings quota, and it is easy to see what percentage of quota the rep can expect to retire in the new selling year. If it falls short of quota, it should prompt the rep to look harder at the accounts in his or her territory, to find additional opportunities. It should also prompt a discussion between the rep and the sales manager about whether the mix of accounts and opportunities on the plan is optimal, and whether there is enough potential in a particular territory, which may induce the sales rep, sales manager, and sales ops team to revisit the definition of that particular territory or the assigned quota expected from the territory.

As previously mentioned, as the selling year progresses, deals may progress from Perceived Need to Defined Opportunities, or from Defined Opportunities to Closed-Won Opportunities. Deals may also fall off the territory map as they are disqualified or lost, and new opportunities may be added as a rep becomes aware of them. Such is the nature of selling. BUT, with the structure of the plan and concept of expected revenue as the path to making quota, we will know how much expected revenue we need to replace when deals are lost or disqualified, and we will always know if reps are on a trajectory to attain quota as the year unfolds.

Consistency is Key

In all cases, it is essential that the probabilities be consistently applied across opportunities, accounts, and territories -- by every sales rep and sales manager -- in order to have a reliable method of determining territory value and the path to quota attainment. This implies that specific rules about how to categorize opportunities by these types, and weight them in terms of probability, must be defined, communicated, understood, used, and consistently enforced throughout the entire sales organization. Of course, the easiest way to do that is to bake these rules, and the entire framework for territory planning, into an automated tool. And when we follow a unified territory planning process, organization-wide, with structured tools that are either integrated with or embedded in the CRM system, the entire organization benefits from the transparency and consistency of the territory planning process, and can approach each year not just striving to hit a bookings target, but knowing if and how, that target can be achieved.

Of course, the Territory Planning Process is just one small component of overall revenue success. Once sales reps, and by extension, entire sales organizations, know which key deals they will pursue to “make the number”, there are many equally important steps required to execute effectively against the territory plan. Look for upcoming articles on Account Planning, Opportunity Plans, and Close Plans, among others.

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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.


This content of this blog article is for informational purposes only, and is not intended to constitute professional, legal, or commercial advice. The opinions expressed are solely those of the author. Please read our full legal disclaimer for further details.

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