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Three tips to improve sales territory and quota planning


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In this five-part blog series, we discuss how to enhance the end-to-end sales planning process, including account segmentation and scoring, territory and quota, incentive compensation, sales forecasting, and deal desk. In this blog, we detail how to best optimize your territory and quota plans to enhance sales.

For many sales organizations, devising and assigning sales territories and quotas is often a matter of guesswork and internal politics. It sounds simple; however, sales organizations are susceptible to assigning the wrong reps to the wrong territories or assigning quotas based on wishful thinking rather than data-driven targets. As a result, the process of developing quotas and assigning territories becomes less transparent, inspiring hard opinions rather than high performance.

Research cited in Harvard Business Review found that optimizing sales territory design can increase sales by 2–7 percent, without any other changes in strategy or resource allocation. It is crucial to evolve your territory and quota setting strategy to stay in step with changing business priorities and objectives. Here are three tips for taking the guesswork out of territory and quota planning and how to integrate this sales structure into your overall enterprise performance management strategy:

Use a data-driven approach

Territory and quota planning needs to be part of your team’s overall sales forecasting and sales analytics processes. Chances are, your organization already has a massive amount of great sales data. Look for ways to use this data and gain insights into where the biggest opportunities lie within the various sales territories. Find the territories that show signs of growth and assign reps whose performance potential are best aligned with these opportunities. Make sure your territory assignments and sales quotas are based on real data and solid trends, not just wishful thinking.

Listen to front-line sales managers and reps

Planning quotas and sales territory mapping should be a collaborative process. Instead of handing down the latest territory assignments from the top, work with your sales managers and even your sales reps to get the latest intelligence from the front lines. Which territories are seen as particularly promising, and which ones are the backwaters that no one wants to work and why? Sales people know how to detect opportunities, so take advantage of their insights and intuition to build a stronger sales performance management program.

Make a “living” plan

In the business of sales you often have to improvise and respond to unforeseen circumstances, and it is no different when assigning territories and quotas. Be willing to optimize your sales plan based on shifts in the economy, changing business priorities, or basic sales turnover. Reassign sales people and reallocate resources based on these changing demands over time.

This is where the flexibility of a cloud-based sales planning tools is crucial. Your massive spreadsheets or legacy systems do not offer flexibility or visibility into scenario-based planning. With the ability to foresee what effects a change in territory or account strategy will have, sales can then focus their efforts on the most profitable accounts and regions.

With the right data-driven approach, enhanced collaboration, and the ability to do scenario-based planning, your territory and quota plans can better align with the overall sales and revenue projections and the big-picture business strategy.

Learn more about how to improve your company’s territory and quota planning. Watch our three-minute territory and quota demo to see how leading organizations are optimizing their strategies on-the-fly to get the most out their sales plans.

Read our first blog of this series, which covers account segmentation and scoring—and check back for our third blog in this bi-weekly series, where we will discuss how to better plan your incentive compensation strategies.

“The distribution of customer workload and opportunity across the sales force has a direct impact on sales people’s ability to meet customer needs, realize opportunities, and achieve sales goals. Our research shows that optimizing territory design can increase sales by 2–7 percent, without any change in total resources or sales strategy.”

Andris A. Zoltners, PK Sinha, and Sally E. Lorimer Harvard Business Review