Salesforce’s Top 8 Tips for Planning Sales Territories

When planning sales territories, it's really important to get a fast start on the new fiscal year, which for us starts on February 1. We don't want to lose two or three months while people are asking, “What's my territory? Who should I be calling? What events should I be having? Who are my prospects?” We want them to have that information on day one, ideally. So part of being fast and delivering results out of the gate is being prepared and having done all the heavy lifting well in advance.

We're growing at a rate of 25%–30%, so the way to continue to drive that growth as a company is to add that much distribution capacity — or about 25%–30% more salespeople — every year. That means we have to create room for all those new people, and have their territories ready so that when they are hired, there is somewhere for them to move into. Before the year even starts, we look ahead and cut up all of the territories we are going to need for the entirety of the year, even if we don’t need them on day one. To cover the new territories, our existing account executives, or AEs, are assigned their main patch plus a little bit more; we know that as we hire new salespeople, the new patches will to be assigned to them.

As we hire AEs, they can jump right into a territory that's already been predetermined, as opposed to waiting around for a month or two while we decide if and how we can create another territory for them. They are also immediately assigned a territory that has already been prevetted and deserves to have an account executive dedicated to it. The AEs can get slotted in and run, which really shortens their ramp time.

We examine a ton of data. We look at industries. We look at the percentage of customers versus prospects in a territory. We ideally want to have a balance so that we avoid having two reps working right next to each other, where one has all the best accounts and no prospects and the one next door has all the prospects and no accounts. We also examine what the penetration is into existing accounts, as well as what kind of support a territory gets in terms of marketing and events. We might end up with a rep in Manhattan with three floors of one building in his or her territory. Based on data, that opportunity could be equitable to a rep who has half the state of Montana.

We also use data to ensure that every AE has an equal shot at quota attainment. There’s a couple of reasons for this. First of all, it allows us to retain more reps. We have lower AE attrition when more people are making their number or are close. It’s very, very costly to replace a rep who’s been trained, amounting to anywhere from a half million to a million dollars in some cases, if you look at the data. The second reason is that when you have balanced productivity across all of your AEs — so they're all producing similar amounts — it's just a healthier business. You have fewer fires to worry about putting out, and you have fewer hot spots you have to manage in your business.

We've gotten pretty good at territory-planning over the years, but in the early days we had some situations where the territories got a little bit out of balance. I think ultimately the reason for that was the data we were looking at. It either wasn't the right data or it was not a comprehensive enough view of the data. We were missing key inputs to how we were defining territories. Lessons like that have helped to motivate us to get really scientific about how we create them.