Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
15-17 September, Atlanta, Georgia
Sales Force Productivity
Conference 2014
Aligning Sales Territories: New
Approaches for Optimizing Productivity
1
Ken Kramer
VP Sales & Marketing
TerrAlign
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Ken Kramer
VP Sales & Marketing
TerrAlign
2
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Agenda
Fundamentals of territory design optimization
End-to-End territory management process
Case Studies, Trends, Best Practices & Recommendations
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Objectives of Optimizing Territories
To create territories…
• that are balanced with regards to a strategic metric
• where workload/opportunity requirements are equivalent to
rep capacity
• that are geographically configured to enable reps to work
efficiently
• that help reps maintain relationships with accounts
• that are equitable with regard to work, opportunity and
quota
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Difficulties in Designing Territories
• History
• Newton’s First Law of Motion
• Are people who are setting the territories determining the right balancing metrics? Does Capacity come into play?
• Spreadsheets vs. Maps
• Collaboration & Intelligence
• Thousands of possibilities
• Changes, approvals and more changes
• Is this how Ops should spend its time, or field managers?
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Why Re-Align
• To balance territories based on
a combination of opportunity,
workload, account/prospect
information and geography
• Expansion or reduction of
sales force caused by new
competition, new products,
mergers/acquisitions
• To manage on-going Territory
management or modifications
due to new customer
acquisition, personnel changes
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Benefits of Optimizing Sales Resources
• Increase sales and profits by 4% to 12% by full resource utilization
• Reduce travel costs on
average by 10%-15%
• Ability to identify over and
under-achievers and reduce
turn-over
• Equitable territories lead to
the ‘right’ quota and incentive
plan, and therefore
motivated, focused sales reps
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Agenda
Fundamentals of territory design optimization
End-to-End territory management process
Case Studies, Trends, Best Practices & Recommendations
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
Segment Your Accounts so you can Segment your Reps
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Segmentation and Targeting
Segmentation aids targeting
• Which accounts receive sales calls
• How many sales calls do they receive
How will sales effort affect customer behavior?
• Products purchased
• Quantity purchased
Factors
• Type of account
• Competitive position
• Potential
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Response Analysis
Segment
Relate effort to results
• Effort expended (call history)
• Results achieved (sales history)
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
Maximize return on investment
• Return in sales
• From investment in sales calls
Response analysis estimates
• Sales
• Resulting from a given number of sales calls
• Across a specific segment of accounts
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Travel Time vs. Reach and Frequency
Sales effort (work) is more than the number of calls
Work = frequency x (duration + travel)
Within a segment, accounts with high travel time
• Have a lower ROI
• Must deliver more sales per call vs. average account
• Might be less attractive than lower potential accounts
• Might be better covered by inside sales
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
How many Reps do you need for each Segment?
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Sales Force Sizing
Optimization of reach and frequency
• Estimates maximum revenue
• For a given amount of sales effort or for a given number of salespeople
Optimize sales force size by
• Optimizing reach and frequency
• For various sales force sizes
• Finding the difference in revenue produced
• Choosing an acceptable return on investment
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Optimization of Reach and Frequency
Segment Accounts
Average
Calls
Average
Revenue
Effort
(Reps)
Revenue
(000)
A 4,815 4 85,000 79 409,275
B 5,185 1 17,500 21 90,738
Overall 100 500,013
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Sales Force Sizing
Sales Force Size Revenue (000)
Incremental
Revenue per
Salesperson
80 455,000
90 480,000 2,500,000
100 500,000 2,000,000
110 515,000 1,500,000
120 525,000 1,000,000
130 530,000 500,000
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference25
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
-10 +10 +20 +30
Change in Sales Force Size
Incremental Revenue per Salesperson
Sales Force Sizing
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference26
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
-10 +10 +20 +30
Change in Sales Force Size
Incremental Revenue per Salesperson
Sales Force Sizing
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
Optimally Align Territories to Maximize Rep Capacity
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Alignment
You’ve determined
• How many salespeople we need
• On which accounts they will call
• How often they will call on those accounts
• How much time each of those calls will require, including travel time
specific to the account
Now, we can create territories
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Alignment
A territory is a job description
• It requires one salesperson
• To call on a set of accounts
• With a recommended call frequency
• To produce an expected amount of revenue
Work = frequency x (duration + travel)
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Alignment
A good territory:
• Is balanced with respect to other territories
- It requires the full effort of one salesperson, just like the other territories
• Doesn’t require less than one salesperson’s effort
- Salesperson’s effort is used on less effective calls or wasted
- ROI is reduced
• Doesn’t require more than one salesperson’s effort
- Salesperson can’t adequately cover his or her accounts
- ROI is reduced
• Respects roads and natural barriers
- Maximizes productivity by reducing travel time
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Alignment
0
20
40
60
80
100
120
140
160
% o
f A
ve
rag
e
Work by Territory
Underemployment Missed Calls Productive Work Work Required
Equivalent to 10%
unassigned salespeople
Equivalent to 10%
vacant territories
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Optimization
Optimize
• Balance selling effort
• Minimize travel size
• Minimize disruption
Assess fit to existing salesperson locations
• Expansions
• Closures
• Relocations
Fine-tune in consultation with field managers
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Optimization
Realignment Evolution
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
300.00%
Territories
Rel
ativ
e V
alue Current
Optimized
Final
High
Low
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Benefits of Optimizing Sales Resources
• Increase sales and profits by 4% to 12% by full resource utilization
• Reduce travel costs on
average by 10%-15%
• Ability to identify over and
under-achievers and reduce
turn-over
• Equitable territories lead to
the ‘right’ quota and incentive
plan, and therefore
motivated, focused sales reps
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
Create Call Schedules to Execute on Plan
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Call Planning
• Assign calls to weeks or days
• Meet call frequency requirements
• Schedule calls at equal intervals
• Cluster weekly and daily calls geographically
• Balance effort by week and day
• Two basic approaches
o Zones
o Calendars
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory AA254
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory AA254 (zoned)
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Day 1 Day 2 Day 3
ID Name CallsWork (hrs) ID Name Calls Work ID Name Calls Work
11071 Customer 5 1 1.11 11040 Customer 3 1 1.12 10038 Customer 1 1 1.29
22339 Customer 13 1 1.11 17607 Customer 8 1 1.16 18014 Customer 9 1 1.25
25173 Customer 17 1 1.11 18202 Customer 10 1 1.12 30527 Customer 24 1 1.21
26101 Customer 19 1 1.11 26084 Customer 18 1 1.16 32269 Customer 25 1 1.13
26624 Customer 20 1 1.11 27565 Customer 21 1 1.12 34351 Customer 27 1 1.23
34877 Customer 30 1 1.11 28450 Customer 22 1 1.12 34403 Customer 28 1 1.13
38389 Customer 33 1 1.11 29791 Customer 23 1 1.15 38068 Customer 32 1 1.13
9576 Customer 36 1 1.11
8 8.91 7 7.95 7 8.36
Day 4 Day 5
ID Name Calls Work ID Name Calls Work
10895 Customer 2 1 1.15 14430 Customer 7 1 1.11
11042 Customer 4 1 1.15 18343 Customer 11 1 1.11
11441 Customer 6 1 1.23 20999 Customer 12 1 1.11
22733 Customer 14 1 1.12 23758 Customer 15 1 1.20
25166 Customer 16 1 1.12 34742 Customer 29 1 1.11
33825 Customer 26 1 1.15 36942 Customer 31 1 1.21
44468 Customer 35 1 1.12 41753 Customer 34 1 1.19
7 8.04 7 8.05
Sample 5-Day Call Schedule
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
The Broader Process
Segment Size AlignCall
PlansIntegrate
Push Territory Definition to ICM and CRM
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity ConferenceSlide 41
The Integrated Territory Management Model
TERRALIGN CONFIDENTIALCopyright (c) 2014 The TerrAlign Group, Inc. All rights reserved.
www.seriousdecisions.com
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Why Integrate
• A Plan is just a Plan until it’s Executed
• Hard to manage sharing of Accounts
• Difficult to properly assign new Accounts/Leads
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
It All Comes Back to the $$$
Set Corp Strategy
Design Comp Plans
Design Optimal
Territories
Allocate Quotas
Calculate Commissions
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• What’s the Goal?
• How to Motivate Reps to achieve that Goal
• How to Allocate resources to Accomplish Goal
• Ensure the systems know who owns what to calculate
accurately
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Agenda
Fundamentals of territory design optimization
End-to-End territory management process
Case Studies, Trends, Best Practices & Recommendations
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Case Study
45
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Benefits of Territory Optimization – Time, Efficiency,
Decision Making
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Trends
• Salesforce (shocker)
• BI
• Territory Master
• Management v Optimization
• Check In, Activity Tracking, Routing
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Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Territory Design Best Practices
• Balance territories on metrics
similar to the ones used to pay
sales commissions
• Build territories from the
ground up with science first,
then local knowledge
• Build territories around
customers, not sales reps
• Base quotas on opportunity
from each territory
• Involve field managers in the
territory alignment process
• Integrate, Analyze, Repeat
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Q and A
Please remember to speak into
the microphone – we’re recording!
49
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Thank you!
15-17 September, Atlanta, Georgia
Sales Force Productivity
Conference 2014
50
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Travel Time Reduction
Optimizing territories reduced travel time creating the
following benefits:
• Travel time reduction
• NE decreased by 5.2%
• SE decreased by 4.7%
• Total savings on mileage = 11,960 miles x $.50 = $5,980
Increased available call hours
• NE increased by 1.6%
• SE increased by .6%
• Total value of increased call hours = $100,000 x 2.2% = $2,200
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Over/Under-Capacity Issues and Costs
Optimizing Territories Improves Overall Balance
• Over-capacity means that the reps can’t make all planned calls
• Under-capacity means that reps can make more calls
• Target for each territory is 1,696 +/- 10% hours per year
- 1,526 – 1,866 hours per year
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Over-Capacity Issues and Costs
CURRENT ALIGNMENT
6 territories over 110% of target
877 total hours above 110%
Value = $51,733
OPTIMIZED ALIGNMENT
2 territories over 110% target
59 total hours above 100%
Value = $3,466
Improvement of 818 hours and
$48,267
Optimizing Territories Improves Overall Balance
TOTAL ROI
Mileage saving ($5,980) + increased call time ($2,200) + over-capacity
improvement ($48,267) + under-capacity improvement ($43,266) = $99,713
Proprietary & Confidential Copyright 2008-2014 2014 Sales Force Productivity Conference
Increased Revenue thru Territory Optimization
Historic Revenue with
Unbalanced Territories
200 rep field force bringing in $400M
(average rep brings in $2M)
Opportunities not being worked is
equivalent to 10% of total capacity or
20 reps
Potential Revenue with
Balanced Territories
Re-Allocate work amongst top and
bottom 20 reps
Increase revenue by up to 10%
Potential $40M incremental Revenue
with no increase in resources
Same Resources - $40M in Incremental Revenue
And Increased Market Share