Territory management (TM) is one of the hardest — and most important — sales activities to get right. 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 purchasing one of the latest TM 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 TM or another type of solution is the best fit for your organization.

Three potential solutions include:

  • Purpose-built 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 several factors, such as the complexity of your sales force, complexity of account management, existing technology landscape and more.

TM, SPM or CRM — What’s the Ideal Solution for You?

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.

SPM: SPM providers are currently launching or have recently launched TM solutions as part of their SPM suite. These are typically best suited to everyday territory management or to help reallocate a few accounts to provide balance across the territory. SPM solutions may not be ideal for companies with larger, more complex and fast-changing territory and quota alignment requirements. Ideally, an integrated and holistic approach is preferred.

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:

  • 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.
  • 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.
  • 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.

How is your sales organization currently managing territory alignment? Which solutions have you found to most effective? Are you considering an investment in TM solutions? Let us know in the comments below!