Territory planning is where it all begins. You establish the outer guideposts for where you will focus your attention. The broader this range is, the higher the risk. The more targeted, based on data, the lower the risk.
Let’s say you have joined a new team, you have picked up a new territory, or you are asked to build your plan from a clean slate. In this scenario we’ll start with a blank whiteboard. On the left side of the whiteboard, write down what you know about your “Ideal Customer”. Who are they, why do they buy, what do they care about, why do they care about it, how does it impact their company (team, line of business, their role)? (the who & the why.)
On the right side of the whiteboard, start with what you do really well. Not an all-encompassing everything you do for your customers, but the three to five things that you do really well. (the what)
Use the middle of the board to start refining your target. In the following scenario, we are delivering a sales enablement technology that supports onboarding of new sales professionals & educating existing professionals on new products that the company is bringing to market. Follow along to see how to complete your planning board.
Who is your ideal customer? The optimistic rep might say “anyone who has a sales team”. This likely describes most organizations you are familiar with, and sounds good, but targeting this base would be the equivalent of trying to boil the ocean. There are a number of organizations out there that have seen minimal growth in their sales teams over the past 24 months. Some, through technology and specialization may be shrinking this audience. Others may be selling the same product to the same market for the past five to 10 years. These organizations are neither expanding their team, nor rolling out new products to market. They likely do not have a need for a sales enablement platform that supports onboarding new team members or educating existing team members on new products.
Now draw a vertical line down the center of the whiteboard - ask a Yes/No question that helps you distinguish between those who are in your market, and all others. Your targets should fall to the right. (An illustration follows) Draw a perpendicular line to the first line, just to the right of your first line. Then ask a second Y/N question that helps to further distinguish your target market. Your targets should now fall above the second line. You are further segmenting your target market, and creating focus. Repeat this process with a minimum of 4 questions. This will help keep you and your team focused.
For Example
Our goal is to identify a singular target customer profile, through this we will be able to focus our attention on a segment, instead of attempting to boil the ocean. The benefit of taking this type of focus, is that customers who fit this segment should care about the same things, their vocabulary may differ, but their business requirements are likely very similar.
Now you have identified your ideal customer. The next step is to determine how many of these customers you should focus your attention on. Again, the first response might be “everyone of them” - why would I limit my success by only going after a handful? This gets back to some of the discussions we have had around time management and to paraphrase a quote from Gary Keller & Jay Papasan in "The One Thing,” if you prioritize everything, you prioritize nothing.
If little is known about the market, I like to start with a simple number such as 10. I will research 10 organizations, identify 10 targets, and focus there for the first 30 days. For this example, let’s assume you already know these important things:
You will need to close 4 deals at an average of ~250K to hit your number this year to exceed your quota, or close 3 deals to live to fight another day. At a 25% success rate historically, you will need to have 16 opportunities in qualification by the mid-year point. Based on taking a targeted approach, expect that 50% of the companies you target will move through validation to qualification. This is the benefit of segmenting your market. Using this math, within the first 6 months, you will need to engage with 32 companies.
You’ll notice - we worked the math out to target ~10 companies per month in the first quarter of the year. This is intentional, it allows focus on 3 companies per week in the first month.
This approach scales, if the average deal size is 500K and the number is 1.2M, you need 3 deals. If the average deal size is 10K, and your number if 300K for the year, you will need ~90 deals over the course of the year. On the lower end of the spectrum the sales cycle is likely shorter. On the higher end, it may be longer.
Please contact us if you would like to schedule some time to discuss territory planning in your organization, or your individual territory.
The numbers look great on paper, anyone can come up with some math to support an approach, but what happens if things change? What if, when you begin engaging with your first 10 targets, you find that a competitor is in the market, and has already penetrated this target? What if you find that no one is interested in the story, or the pain is not what you expect?
John Boyd introduced us to the OODA loop - Observe, Orient, Decide, Act - REPEAT. Today, we talk about Agile in the context of software development. Historically, we have discussed agile in the context of sales. Your territory plan is a living breathing document, just like the account plan. Take time to adjust and adapt your plan based on the things you learn, as you engage with your customers. Is the sales cycle shifting to a 9 to 12 month sales cycle? Increase the number of customers you engage with. Are deal sizes larger than expected, but more complex than anticipated? Back off your number of targets, and focus on those who are further along in the sales process.
The territory plan impacts your long term success. It is something you control. Yet so many of us look at this as a one time event, driven by sales management at the beginning of each year. Take 30 min to an hour, each week to revisit your territory plan. Ask yourself what’s changed? How is the plan working? Is it still relevant? If you do this for 1 hour a week, it is less than 2.5% of your work week, assuming a 40 hour work week. As sales professionals we do not clock in and clock out. We ultimately are not measured by the number of hours we work, but by the sales we close. Do the important things.
If you do not have an hour per week to revisit your territory plan, I would argue that you probably need to allocate two to three times as much time to re-build your territory plan, or you need to expand your team because you are missing out on opportunities.
Thank you for rating and reviewing the podcast via iTunes, Google Play, or your favorite podcast platform. Ratings & reviews help others discover the podcast - thank you for helping us get the message out to the sales, account management, startup, sales enablement and customer experience community.
Please send listener questions and feedback to hello@catalystsale.com or contact us directly on twitter, facebook or LinkedIn.
Growth Acceleration - Plateau Breakthrough
----------------------
Subscribe to the Catalyst Sale Podcast
Catalyst Sale
In every business, in every opportunity, there is someone who can help you navigate the internal challenges and close the deal. There is a Catalyst. We integrate process (Catalyst Sale Process), technology and people, with the purpose of accelerating revenue. Our thoughtful approach minimizes false starts that are common in emerging markets and high growth environments. We continue to evolve our practice based on customer needs and emerging technology. We care about a thinking process that enables results versus a process that tells people what to do.
Whether you are an early stage company trying to validate product market fit, or a more mature company looking to break through the next plateau. We are here to work with you.