Salesforce’s Top 8 Tips for Planning Sales Territories

Align strategy teams, sales leadership, and field operations to plan sales territories.

Time to read: 4 minutes

Adam Gilberd
SVP, Commercial Sales, Salesforce

At Salesforce, we put a lot of thought into how we plan our sales territories. The process starts about five months before our fiscal year begins, and we have a fairly large team that tackles it — there's a huge amount of data to get through. We've gotten better at systemizing it to include input from our strategy team, our sales leadership team, and our field operations team, which manages all of our customer relationship management (CRM) data.

Every year, there are eight key tips to successful sales territory planning:

1. Get a head start on territory planning.

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.

2. Plan for what you will need.

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.

3. Avoid sales territory disruption.

Another advantage of formulating the sales territory plan before the fiscal year starts is that it allows us to not have to recut every 30, 60, or 90 days to account for the number of AEs we have at that instant. The latter is a really, really disruptive way to do it. The former method is also a little bit of our special sauce in terms of how we’ve grown as a company. Once the territories are cut, they don’t change for 12 months. It’s not only about being at capacity — we also prioritize how quickly we can get an AE productive once he or she is hired.

4. Lessen your AE ramp time.

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 pre-vetted and deserves to have an account executive dedicated to it. The AEs can get slotted in and run, which really shortens their ramp time.

5. Make data-driven decisions.

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.

6. Give every rep an equal chance.

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.

7. Shift your sales territories annually.

This territory planning tactic is really a byproduct of our growth as a company and the number of people that we promote every year. Let’s go back to our annual practice of cutting all the territories that we will need before the year begins: That exercise alone means there are a lot of customers who are going to have a new rep. The other factor in this is that we’re a company where bright, young sales professionals want to be and have the best years of their career, and we want to help them with that. We promote these reps — in my case, 30% of our reps last year — into a bigger and better job. To fill their shoes, we do a lot of external hiring or promote reps up from below. We always try to minimize disruption (see Tip #3), but when you’re growing this fast, there's no way around a certain amount of it.

8. Use mistakes to make adjustments.

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.

We use data to ensure that every account executive has an equal shot at quota attainment.”

Adam Gilberd | SVP, Commercial Sales, Salesforce


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