When Do I Need to Think About Territory Design?
Territory design is often overlooked yet crucial to sales strategy. In this episode, Collin Stewart is joined by Hayes Davis, Co-founder and CEO of Gradient Works, and Lily Youn, Head of Growth, to explore the intricacies of territory design and its impact on sales performance.
A Technical Journey into Sales
Hayes’ journey into territory design is anything but typical. Initially a technical founder, Davis’s transition from software engineering to sales was driven by the realization that a strong product alone isn’t enough to scale a company.
After a larger company acquired his first startup, Davis found himself fascinated by the challenge of optimizing sales teams for success. He soon discovered that traditional territory design methods were outdated and inefficient, leading him to develop a more dynamic approach.
This shift in focus from a purely technical role to revenue operations allowed Davis to see sales organizations as complex, distributed systems that required careful optimization.
His background in technology provided a unique perspective, enabling him to approach territory design with a data-driven mindset, ultimately leading to significant efficiency gains.
The Impact of Territory Design on Sales Teams
Lily shares her insights from managing outbound SDR teams and their territories. She highlights how territory design can improve a sales rep’s productivity.
Drawing from her experience, Lily discusses the challenges of static versus dynamic territory models and how each impacts not only individual rep performance but also the overall success of a sales team.
Youn’s experience with various territory models, from geographic to the “Wild West” approach, illustrates the importance of thoughtful territory allocation. She emphasizes that even with the best sales enablement tools and training, their performance will suffer if reps work with poorly designed territories.
This realization pushed her to dive deep into the territory design process, recognizing its critical role in driving sales efficiency and success.
The Pitfalls of Traditional Territory Models
Collin and Hayes delve into the common mistakes companies make when designing territories. Davis explains how many organizations swing from one extreme to another, starting with a haphazard approach that eventually becomes overly structured.
This over-structuring often leads to inefficiencies, where some reps are overwhelmed with opportunities while others struggle to find viable prospects.
Examining these traditional methods, the conversation reveals how a more dynamic and thoughtful approach to territory design can prevent these pitfalls. Hayes argues that it’s not just about carving out territories based on outdated practices but also about understanding the market’s real needs and the sales team’s capabilities to maximize success.
Static vs. Dynamic Territory Design
Territory design is a critical element of sales strategy, and companies often default to static models, where territories are assigned once a year and remain unchanged.
As Lily discussed, this approach can lead to significant inefficiencies. In a static model, sales reps may be assigned thousands of accounts. Still, many of these opportunities can be underutilized or outright ignored without the flexibility to adjust based on real-time performance.
The rigidity of static territory models often means that high-potential accounts might be overlooked simply because they don’t fit neatly into predefined geographic or vertical boundaries.
In contrast, dynamic territory models provide a more adaptive framework. Hayes introduces the concept of dynamic books, which function like a load-balancing algorithm.
Instead of locking reps into fixed accounts, the dynamic model reallocates accounts based on current data, such as rep performance and account engagement.
This approach ensures reps consistently work on the most promising accounts and allows quick adjustments when market conditions or sales priorities change.
Choosing the Right Approach
One key advantage of dynamic territory design is its ability to prevent valuable leads from falling through the cracks.
In traditional models, reps often set aside accounts that aren’t immediately promising, but dynamic models encourage reps to actively return unworkable accounts to a pool where they can be reassigned. This keeps the sales pipeline fluid and ensures every account gets the attention it deserves, maximizing the potential for conversions and overall sales success.
Dynamic territory models also address the common issue of reps hoarding accounts. By implementing a “use it or lose it” policy, companies can ensure that all top accounts are being actively pursued.
This approach increases efficiency and ensures that no rep is overwhelmed with more accounts than they can effectively manage.
Mastering Territory Design
Territory management isn’t just about allocating accounts. It’s about empowering sales teams to work smarter and more efficiently.
The traditional approach of assigning static territories can often lead to inefficiencies, with reps hoarding accounts they can’t fully manage. But there’s a better way to approach this challenge.
Lily shares her experience of manually managing accounts for a large team using spreadsheets. This labor-intensive process involved scrutinizing every account to ensure it met the ICP criteria, but it was far from efficient.
Recognizing the limitations of this static model, Lily implemented a dynamic approach, automatically reallocating accounts that weren’t actively worked within 30 days. This policy kept the sales pipeline active and ensured that high-value accounts weren’t dormant.
Strategies for Agile Sales Teams
Hayes expands on this by highlighting the importance of integrating a more agile, dynamic model into your territory management.
Instead of a one-size-fits-all approach, where accounts are statically assigned for an entire year, he advocates for a more flexible system that continuously reallocates accounts based on real-time data and rep capacity.
This method, which can be managed through a CRM like Salesforce, allows teams to dynamically adjust their focus, ensuring that the best accounts are constantly being worked.
By transitioning from static to dynamic territory management, sales teams can avoid the pitfalls of overburdened reps and neglected accounts. This approach maximizes efficiency and drives better outcomes, as reps consistently engage with the most promising opportunities.
Rethinking Sales Territories
Salespeople are often compared to dragons guarding their hoards, fiercely protective of their assigned accounts. While this mindset is rooted in tradition, it’s not always practical. In today’s fast-paced market, clinging to a static set of accounts can lead to inefficiencies, with promising opportunities slipping through the cracks.
But what if you could constantly reassess and redistribute your accounts based on real-time data?
That’s the idea behind dynamic territory management, which adapts to changing conditions and ensures that sales reps always work the leads most likely to convert. It’s about more than just keeping your team busy; it’s about ensuring they’re focused on the correct targets.
The Power of Dynamic Management
Dynamic management also integrates inbound signals, which helps ensure that accounts are matched with reps with the capacity and expertise to work them effectively. This approach is like a well-tuned machine, constantly adjusting and refining itself to maintain peak efficiency.
The beauty of this system lies in its flexibility. Unlike the rigid, traditional models, a dynamic approach allows for ongoing adjustments. Whether launching a new product, responding to market shifts, or simply refining your sales strategy, this model gives you the agility to pivot and stay ahead of the competition.
In a world where agility is often the key to success, a dynamic approach to territory management might just be the edge you need to outmaneuver your competitors and maximize your sales potential.
Conclusion
Dynamic territory management isn’t just a strategy; it’s a necessary evolution for modern sales teams.
You can ensure that your team remains agile, focused, and effective by continuously reallocating accounts based on real-time data. This approach maximizes efficiency and keeps your sales pipeline active, helping you seize opportunities before they slip away.
Embrace this dynamic method to stay ahead of the curve and drive your sales success to new heights.
Transform your sales strategy with Gradient Works‘ dynamic territory management solutions, ensuring your team is always focused on the most promising opportunities.
Optimize your revenue generation with Predictable Revenue’s proven methodologies and expert guidance to drive consistent growth.
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