Territories vs Wide Open for Sales Teams

At Pardot, we built the sales team to almost 30 people before the exit and never had territories (everything was inside sales). Our model was wide open with simple round robin lead assignment based on two different queues (one based on leads from the test drive form and one based on leads from all other forms). When I talk to entrepreneurs about their sales strategy, territories are commonplace. Naturally, we had internal debates about the pros and cons of territories vs wide open.

Here are a few thoughts on territories vs wide open:

  • With wide open, sales reps get an equal number of qualified leads as company lead volume ebbs and flows
  • With territories, sales reps get a reduced geography as the sales team grows, potentially resulting in morale issues
  • With wide open, there’s a constant tension around the rules of engagement for stale leads (we made it so that if a lead hadn’t been engaged in six weeks, it was fair game)
  • With territories, sales reps that are primarily inside have a better opportunity to meet with multiple prospects on the occasional trip to their territory as well as attend regional events

The growth of inside sales is causing entrepreneurs to rethink the traditional territory approach and look for ways to make sales more efficient. Entrepreneurs would do well to evaluate both the territories approach as well as the wide open approach.

What else? What are some more thoughts on territories vs wide open for sales teams?

5 thoughts on “Territories vs Wide Open for Sales Teams

  1. While “wide open” might sound a bit wild west & chaotic to those who haven’t tried it, I wouldn’t run a sale team any other way. We took it one step further on my teams and established that accounts are only protected when it’s a current client or if a rep has progression, as established in CRM notes, towards an actual deal. Regular emails and leaving voice mails are not enough. Having been on sales teams that did it both ways, the advantages of “wide open” are:

    *The whole sales team, regardless of company seniority, has an equal opportunity to achieve. This prevents morale issues and turnover with your talented new reps.

    *You reward proactive sales, sales activity and prospecting for sales opportunities, not seeking to call dibs on a maximum number of best accounts and waiting on them to write in. As a result your talented senior reps stay motivated.

    *In reality Rep A will seize on opportunities that Rep B missed and vice versa. The result will be more sales for all.

    *If your account is only protected by your CRM notes that establish deal progression, your can guarantee your Reps will take good notes in their sales CRM.

  2. I’ve always been a big proponent of sales territories, but I have to say, I’m starting to drink the Round Robin kool-aid for the reasons you outline above in an Inside Sales Model. There’s a tipping point for sure when you absolutely have to go geos, but it’s later in the startup maturity cycle than one may think.

  3. Clearly in favor of wide-open in my experience… and I don’t see the tipping point. The sales team can be managed in this fashion realistically up to 1,000+ sales people and north of $1B in revenue. Another advantage, although some might say it’s a disadvantage, is in wide-open, coast-to-coast the sales rep can work early and late and nearly always have good customers to call. Those that are highly motivated on a highly leveraged plan will take advantage of it. In addition, applying account management or “book management” metrics and processes makes it possible to see whether your business is “customer driven” or “sales team driven”.

  4. I’m dealing with this issue right now, as we are contemplating going from set territories to an open territory format. We are in the direct mail space, and the concern is two car dealerships sending out similar mailers from two different reps in a competing territory. Might cause some controversy- but I think we will deal with this when (not if) it comes up!

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