Territory design

What is territory design?

Territory design is dividing accounts or geography among sellers so each has a fair opportunity and the whole market is covered. A territory can be a set of zip codes, a list of named accounts, an industry or a mix. Andris Zoltners and Prabhakant Sinha framed it as grouping small coverage units into larger territories that meet the criteria management cares about. Balanced workload, balanced potential and sensible travel are the usual goals.

Why it matters to a revenue leader

Territory imbalance is a quiet tax on the number. Drawing on work with more than 300 sales forces, Zoltners and Sally Lorimer call territory alignment one of the most overlooked productivity areas and say imbalances cost many sales forces millions each year. Overloaded territories leave buildings untouched. Thin ones leave sellers short of quota and looking for another job. In a branch-based services business, territory lines also decide who owns a national account that spans regions, which is where many disputes start.

An environmental services company has two sellers in one metro. One holds the downtown core with 400 commercial buildings. The other covers the outer suburbs with 150 buildings spread over an hour's drive. The first leaves accounts untouched, and the second runs out of prospects. Redrawing the lines around building count and drive time evens the opportunity.