When to Redesign Territories?

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When to Redesign Territories?

 

Changes in Team Size

Anytime there is a change in your team size whether its an increase, decrease, or merger of sales teams you need to redesign your sales territory.

If your sales team increases in size you need to know where to place these new sales reps and make sure that they have a balanced and viable sales territory

When decreasing sales team size its important to allocate the old territories equally to surrounding sales territories in order for all of them to remain balanced

If your organization has merged with another then you may have double the amount of sales territories. You will have to find a way to properly split territories between the old and new sales reps so that each territory is balanced with same amount of potential sales.

 

Change in Priorities

If your company experiences a change in product priorities then its time to reevaluate and adjust your current sales territory design. A new product launch or a product extension qualify for this point. For example, your company has traditionally operated in the south where temperatures are moderate. Your R and D department had modified your product so that it can be used in the northern climates, you now need to expand your sales territory design to encompass all the new potential clients. The same idea goes for the loss of valuable products. If your company somehow loses the right to a product then you may no longer need to target certain areas and you'll be able to shrink the size of your territories.

 

Alignment Decay

Alignment decay is caused by micro changes in the alignment that occur over time that alter the size and locations of your sales territories. A good example is shown below. The first image shows what the sales territories look like before any sort of micro changes have occurred. Let's say that the sales rep in the yellow territory has asked to go on a extended medical leave. The surrounding sales reps are each asked to take on a quarter of yellows accounts. A few months later yellow still hasn't returned and has decided to never return. So because the surrounding four sales reps have already taken on yellows accounts management has decided to just let them keep the extra accounts. In doing so these four territories are now 25% bigger than any other territory in the country. This means that these four territories are not balanced and the sales reps will have an upper leg when it comes to meeting sales targets and getting bonuses. This is why its important to evaluate your sales territories every few years to make sure that they are balanced and exactly where they should be.

 

Before Alignment Decay

 

After Alignment Decay