Bootcamp – Sales Territory Planning (Part 1 – The Framework)

(This two-part discussion examines the high-level process for entering and developing a new sales territory.)

I was recently asked to assess and then plan the development of a new geographic territory that was previously not served by the ACME Services Company (name changed to protect the competitive advantage).  The task was to first determine what opportunities and potential existed in the territory and then to put together a lightweight plan that would allow for quick and efficient entry into that territory.

The request is quite common for companies growing in the marketplace who are trying to effectively plan where to go next and how to approach it, as well as, setting rough revenue, cost, and growth projections.  And like many similar situations out there, I didn’t have a lot of time to execute the assessment and knew that I would need to accomplish this myself with the basic resources that I had at my disposal.  (It should be noted that this process does not replace the need for more thorough strategic and business planning that could include this territory but does allow for an efficient go/no-go assessment and rapid start-up in the territory.)

So where should I start?

I decided to return to the tried and true strategic planning framework that has served me so well when developing larger business strategies but planned to take only the pieces that were required for the scope and level of this analysis. 

All of the the traditional strategic framework elements are important in any planning process.  However, in this situation, the goal is not to create or modify the company’s strategic plan but instead to use the plan as a guide for entering a territory.  Therefore, some of the elements become fixed inputs that will steer or regulate the process while others will become data inputs from which decisions will need to be made.  The elements are marked in the list below for clarity.

Abbreviated Planning Framework Elements

1.  Understanding ACME’s company Vision and Mission. (Fixed Input)  Corporate Vision and Mission are set and are the guiding principles by which all business is undertaken. 

2.  Measuring ACME’s internal strengths and weaknesses and the external market’s opportunities and threats.  (Data Input) The SWOT analysis becomes the most dynamic part of the assessment aligning the capabilities of ACME with the market opportunities.  Most of the work in the assessment and planning will be done in this element and will include:

a. Identifying the target market in the territory- geographic prospect groups, industry vertical groups, size-ranked groups

b. Determining alignment of ACME’s capabilities to the market needs,

c. Approximating the demand in the market that ACME can satisfy,

d. Assessing openness to new providers in the territory and existing and potential competitive threats.

3. Determination of Viability and Options (Fixed and Data Inputs) The SWOT analysis provides a relatively thorough and objective measure of the subject marketplace and the opportunities.  The data gathered needs to provide sufficient information to determine if the market opportunities match the goals and capabilities of ACME.  If the territory opportunities align with existing corporate mission and capabilities, those opportunities should be detailed to a level that is sufficient to create tactical plans for execution.  When assessing viability, it should be remembered that this level of assessment is normally not intended to identify new strategic opportunities.  Regardless of however valuable they may be, if entry into the market requires new strategic initiatives, the viability would need to be questioned.

4. Recommendations and Penetration Strategy (Data Input) With the data in hand and the potential opportunities identified, analysis of the choices needs to be made, a prioritization determined, and a concise tactical plan constructed for each.

5. Revenue/Cost Projections (Data Input) During the Determination of Viability step, some assessment of the market value of these services from a dollar value perspective has been made and has been determined to meet the minimum return required before investing in the effort to enter the territory.  More robust budgeting and planning should be done on a monthly or quarterly basis for at least a year to estimate likely revenue from the target prospects and the direct costs to deliver the services and support the growth of the territory.  These calculations are often challenging as you enter a new territory but are necessary for company budget planning and measurement of progress towards goals and assessed opportunities.  Using prior  comparable territory development activities as a guideline can help the estimation process with more realistic numbers for ACME’s business and served markets.

As mentioned in the introduction, this plan is intended to be an efficient and lightweight assessment of the target territory and needed to be completed in 2-3 days.  This is not your typical strategic planning exercise that can take months and lose timeliness and value before it is finished (although it should not be inferred that thorough strategic planning is not an important part of any business).  

Completing these five elements from the traditional strategic planning framework will get any territory planning exercise going in the right direction with the proper structure and level of detail. 

(In Bootcamp – Sales Territory Planning -Part 2 , we will drill down into more detail of the five elements and address the components more thoroughly.)



About Tod Kerr

Tod is a senior corporate leader with 20 years of experience managing business operations in numerous functional areas, with a focus on developing and marketing business to business technology solutions to world-wide high tech markets that allow customers to operate their business more efficiently by driving out costs, improving productivity, and creating value for their clients.
This entry was posted in Business Strategy, Sales and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s