How to think about Sales territories

Before you get started

There is no single right way to build sales territories - in my (humble, and nerdy) opinion, that's what makes them interesting! This is why the title is "how to think" about territories, vs. how to build them.

I always think it's helpful to start with a set of guiding principles. What are the high-level themes that you want to guide your process? Here are the ones I used:

• Set reps up for success

• Create fair and equitable books

• Comprise the majority of assigned accounts in hypothesis high-potential industries

• Also include a smaller subset of industries we want to experiment in and learn from

• Transparency

Find your data source and run your initial data search

There are a number of options of data sources you can purchase to build territories. As an ex-LinkedIn employee, I highly recommend LinkedIn Sales Insights. For a few different reasons, in this case we ended up using ZoomInfo.

Once you've chosen your data source, you need to pull your initial data list based on filters that make sense. Here's a simple overview of my search:

Refine your data in excel

With the above filters, I had my initial data set. Then it was time for some magic in Excel. My filters yielded 11,000 accounts, far more than I needed. So I broke the accounts into 4 categories:

1. Tier 1 - will assign all accounts

   1. In my case, this included B2B software, B2C insurance, B2B law firms, and "Business Services" which comprised sub-industries like accounting, call centers, consulting, etc."

2. Tier 2 - a subset of these accounts will be assigned. These are industries that could be good ones for us to target, but we're not certain and so just want to test the waters.

3. Deprioritize - accounts that will not be assigned.

4. Cherry picked - accounts that didn't fall into Tier 1 or 2, but we still felt should be assigned for a specific reason.

I then determined how many accounts I wanted per book (in my case, 200, but this will likely vary wildly depending on your business and the type of sale - feel free to reach out to me to discuss), and how many territories to cut (I actually cut more territories than we have reps, anticipating potential future hires later this year and knowing I wouldn't want to have to build more territories later on).

Communicate territory philosophy, and territories themselves, to reps

This part is super important and often overlooked. My opinion is that you should bring sales leaders and reps along for the journey of how books were built - transparency is a super important part of earning the credibility required for a healthy ops / sales relationship. Here is the Scribe I used to do this, which included embedded Google Doc links and a video recording link that provide additional context. This was then covered live in team meetings.

That's it! This is, of course, an over-simplified explanation, but should give you a sense for how I thought about building territories from scratch. There are many ways to tackle this, and the larger and more complex the business, the more sophisticated you'll want to be. But for us as a small and growing startup, this covers the basics of how you might think about doing this from scratch.

If you have any questions, comments, or simply want to nerd out and talk shop, please reach out! I'm at justin@scribehow.com and would love to hear from you.