Sales Territory Management: The Importance of Automation & How to Choose the Right Solution

October 04, 2018

Sales territory management (TM) is one of the hardest - and most important - sales activities to get right. Gone are the simplistic days of sales reps simply “having a patch” to cover for selling their goods and services.

Specifically, you’d have a salesperson who covered a broad array of industries and products. They would perhaps focus year-to-year on their current assigned accounts, along with a long list of zip codes close to their home base to penetrate for new business activities.

They may frequently focus on their goals, but these were goals their bosses seemed to arbitrarily set from the back of a notepad or cocktail napkin. Like a good soldier, most would work tirelessly to service their base and hit those annual targets, but in the end, their actions are nothing more than “going through the motions.” Things were just done that way.

Fast forward 20-30 years to the age of enlightenment for Incentive Compensation Management (ICM) solutions.

Sales and sales operation leaders are equipped with real-time mission critical metrics on performance across their reps in the field—coupled with a brand new buyer who is educated and in the driver’s seat.

This brave new world offers a wealth of information for the salesperson to more proactively drive the business.

But—not everyone is there yet. There are still many who are frantically scrambling to, instead, react to results they just worked through from the previous quarter.

Said differently, we are seeing more and more clients realize that their Territory and Quota Management (TQM) process and supporting technologies are still stuck in the 70’s disco-era while the Incentive Compensation side is doing the Dab and Floss (provided reference from our interns) being up with the times.

The automation of Territory and Quota Management processes onto the next generation solutions, provided by existing Sales Performance Management (SPM) vendors, is what we are seeing emerge in the marketplace.

This shift if critically important for three key reasons:

  1. Improved flexibility in defining and modeling of Territory and Channel structures

  2. The importance of crediting transactions in the Incentive Compensation process

  3. The agility of re-aligning assigned quotas throughout the year as conditions change

Territory Definition and Modeling

Within the SPM Vendor selection engagements performed by OpenSymmetry, companies are beginning to gain a more holistic view of the challenges they face, especially when TQM is brought into the picture.

Customers are starting to realize that more robust and agile territory definitions are becoming the standard. With real-time modeling capabilities being introduced to the marketplace, sales and sales operation leaders now have the ability to successfully answer the questions of how to divide and attack new sales territories by being able to easily realign territory definitions, with the immediate impact being seen for overall coverage and potential quota impacts.

Very few companies we have encountered in the last year have simple territory definitions. Most have leveraged just a geography or product line based approach, with limited visibility and agility.

Now these organizations are wanting - and need - greater flexibility to add dimensions in order to assign and adjust on the fly—all based on the ever-changing needs within their business and customer sectors.

Companies are becoming savvier with the sales roles and associated plan designs, and thus the territory definitions must be infinitely flexible to handle the direct, indirect, and overlay roles, with the use of Excel or other manual methods being left in the past.

Territory Definition and Crediting

The evolution of roles and associated plan designs have increased the importance of flexible territory designs, as those are the catalyst for the accuracy of crediting transactions to the identified roles for compensation.

In our recent customer assessments on their Territory and Quota Framework, the common theme seems to be that their direct crediting is sufficient but things start breaking down for them when it comes to accurately identifying overlay roles for crediting.

Through further conversations, it becomes apparent that at the core of the problem is the lack of robust and flexible technology solution for their territory management process.

Most clients end up making more manual credit adjustments in their home grown and commercial SPM solution after the fact because of the lack of robust territory management functionality.

These much improved Incentive Compensation solutions in the marketplace are all easily enabling territory assignments at varying degrees, like product or customer hierarchies, allowing broader coverage for overlay roles like Product Specialists or Account Managers.

Territory Definition and Quota Alignments

The introduction of real-time modeling applications for the TQM business case has provided the ability for sales operations resources to have immediate clarity on quota impacts.

Territory definitions can be altered with the new plan year setup, as changes are needed throughout the year to account for changing market conditions, or to account for scenarios like temporary coverage for empty territories. Very few, if any, customers we interact with simply set annual quotas and let them ride for the year, hoping for the best, and do not consider other company, customer, or other external factors in their sector.

To be fair, We have also seen companies with processes that over-think the quota management process, allowing sales managers to adjust on a much more regular basis of monthly or bi-weekly depending on the industry.

No matter where your company falls in the continuum of quota alignments, it is paramount to your agility and ultimate success to be able to assess and react to changing territory alignments and their downstream impact on the sales rep’s quota.

Companies still on Excel to manage their quota and territories are falling behind their competition. Going from manually maintained Excel models to fully functioning TQM platforms is like going from piloting a simple glider to the most advance passenger plane, today.

With so many factors to manage, including the size of your sales force, number of roles, overlays, changing market conditions and more, how can you be sure your territory allocations are fully optimized?

While it might be tempting to resolve these challenges by hurrying to purchase one of the latest sales territory management solutions on the market, it’s important to first assess your sales processes and needs, know which problems these solutions are designed to manage, and then decide if territory management or another type of solution is the best fit for your organization.

Three potential solutions include:

  • Purpose-built territory management (TM) solutions

  • TM additions to existing sales performance management (SPM) solutions

  • Customer relationship management (CRM) solutions that have a TM capability

Each of these solutions can help you drive sales force behavior through optimized territory and quota alignment, but your choice of solution depends on the aforementioned factors, again, such as the complexity of your sales force, complexity of account management, existing technology landscape and more.

TM, SPM or CRM — What You Should Know About Your Options

Territory Management (TM)

Specialist TM solutions are very visual and have robust modelling capabilities. They use extracted sales and account data, plus zip or postcode information, to put together a detailed model of the current state of territory allocations and potential future options.

Territory changes can be visually modelled in real time to forecast the impact on account allocation and quotas. Sales leaders can view these territory forecasts, review different scenarios, and collaboratively propose solutions for anticipated outcomes.

TM solutions can also integrate with SPM, which adds sales crediting rules to the territory alignment capability provided by TM solutions.

If you are looking at a major review of territory alignment, this is probably the best solution to achieve effective territory optimization.

Sales Performance Management (SPM)

SPM providers are currently launching or have recently launched TM solutions as part of their SPM suite. These are well-suited to everyday territory management or to help reallocate a few accounts to provide balance across the territory.

If you have a complex TM landscape and are in a volatile environment that requires regular alignment, you may also need a territory optimization tool as part of your overall SPM solution.

Ideally, an integrated and holistic approach that includes TM, quota, optimization, and ICM is preferred.

Customer Relationship Management (CRM)

The ability of different CRM solutions to manage territory alignment varies.

For instance, some solutions designed for complex sales forces in the pharmaceutical industry have a robust TM capability with mapping functionality. However, these solutions lack the sales crediting capability required for effective SPM.

So some integration with SPM solutions is still required to provide full functionality across territory and SPM functionality.

So, which solution is right for you?

Consider these variables before you decide:

1. Sales force complexity

TM solutions are probably best suited for companies with multiple salesforces, large numbers of accounts, a high rate of account movement, and complex crediting.

These companies need robust weekly and monthly realignment of account allocation and territory alignment with the ability to model options and gauge impact.

On the other hand, companies with relatively stable territories, little to no overlap and low account volatility can likely get the functionality they need from their current SPM or CRM solutions.

2. Volatility, or scale of corporate growth

Fast-growing businesses are constantly faced with the challenges of managing fair quotas, an expanding salesforce infrastructure and high rates of market fluctuation.

TM solutions are a good choice for companies dealing with this kind of extreme volatility because they must be able to model a variety of scenarios with multiple changing variables to make the most accurate territory decisions possible.

On the other hand, a more stable, mature business with a lower degree of growth or contraction will rarely require the robust modelling capabilities TM solutions offer.

3. Infrastructure complexity

No single tool can do everything, but adding too many technologies and solutions to your environment can create more problems than it solves. The additional cost of new solutions is also a concern.

So before making any new technology decisions, first determine if your existing solutions can address your territory management challenges.

If not, can you be sure an additional technology investment will pay off through increased sales performance and revenue? Are there other ways to optimize your sales operations?

Conducting a thorough ROI and infrastructure analysis is critical before making any new technology purchase.


After migrating onto a new cloud-based TQM solution, it’s not uncommon for customers to see a reduction in their annual territory and quota setting, from two painstaking months to three weeks with the same level of staff.

It is time to react to the times or you can expect to be left behind by your competitors clamoring for that same dollar in the marketplace.

As a trusted leader and global advisor that delivers Sales, HR, and Finance solutions to accelerate business performance, we are able to help you peer around the corner and take you from uncertainty to opportunity. Our proven approach and team of experts are here to enable your success. To learn more about our Strategy Services offerings today.



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