Establish Sales Quotas and Territories to Measure Performance

There was a time when “territory” referred to a geographic region, and different reps and agents covered different territories and rarely crossed paths. For the most part, those days are long gone. Today at CallidusCloud, we define a territory as a set of accounts – segments, industry verticals and geographies – with products as a cross section. As we like to say, no territory without a quota and no quota without a territory.

By defining a territory as a set of accounts within a certain industry and size, for instance, we make it easier to establish which products are sold and how to set quota. By analyzing those accounts over time, we can establish the characteristics and the proper quota for each territory. Sales quota and territory management software that refines business practices for territory sizing and balancing can add over 5% in sales from existing resources[1].

Sales Quotas and Territories for Coaching and Compensation

Consider a sales manager who is coaching two sales agents serving two different territories. Agent One exhibits all the key behaviors that have proven successful at that company and is making quota each month. Agent Two is barely using any of the proven sales behaviors, and is also making quota.

With good territory and quota information, that sales manager can establish that Agent Two is serving a particularly fertile territory. Armed with this information, she can divide the territory, set the quotas more appropriately, and get a proper revenue level.

If Agent Two is hitting quota because quota is set too low, then the quota correction will force Agent Two to adopt the correct behaviors and increase production or be replaced by someone who will. If Agent Two does start using successful selling behaviors and meets the new higher quota, he will continue to be rewarded for meeting quota. If not, the organization can stop paying a bonus to someone who isn’t earning it and start paying it to someone who is earning commensurate revenue for the organization.

[1] Gartner Research, Don’t Let Tactical ICM Wins Hinder a Strategic Approach to Sales Performance Management, 2012