Recently, Clay called “real-time territories” one of 5 unsolved GTM problems. We definitely agree that static territories are a problem. But are real-time territories unsolved? Definitely not.
Here at Gradient Works, we solve the static territory problem for thousands of reps today with dynamic books, which is what we prefer to call "real-time territories". Dynamic books is what we do.
But we're glad to see a GTM leader like Clay call attention to the problem of legacy territories. It’s a huge issue. How huge? Thanks for asking.
76% of sales teams still use geographic territories and 64% aren’t happy with the results. This kind of legacy territory design costs teams 10% of potential revenue and it’s a big contributor to today’s terrible attainment.
Usually people don’t know of a good alternative, so they keep doing it the way they have for 100 years (seriously, a geo territory approach to sales dates back to at least 1919).
For the past 3, years we’ve been championing dynamic books. It’s an operating model first, tooling second. We’ve built Gradient Works to make the model easy to deploy and execute.
How does a dynamic books approach work?
Instead of carving fixed patches, teams that use dynamic books do the following:
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Ruthlessly define ICP and tier accounts. You need to know what a high-fit prospect looks like (and inversely, what a bad-fit prospect looks like).
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Keep segmentation (SMB, MM, Ent) but pay less attention to geography. Large-scale regional geography probably still matters for language, time zone and cultural reasons, but state-level or zip-code level geo does not.
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Do a bottoms-up analysis to calculate how many accounts reps can actually work at once. Spoiler alert: It's usually a pretty small number, maybe 100-200 for SMB or mid-market reps, fewer for enterprise.
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Assign the best accounts (using scoring, firmographics and signals) to max out rep capacity, so they have a focused, highly prioritized book. Leave the rest in a ready pool for marketing nurture.
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Let the reps cook. They’ll either turn accounts into customers or find out a reason they can’t make progress.
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Enable account returns. If a rep can’t make progress with an account, let them return the account to the pool with clear guardrails.
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Give reps fresh new accounts. Regularly top off rep books with the next best set of accounts available from the ready pool.
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Hold reps accountable for covering their books. If reps aren't working their accounts thoroughly, retrieve and redistribute the accounts to reps with capacity.
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Repeat.
What if we can't go to a fully dynamic model?
Some teams are reluctant to change to dynamic books, for good reasons. The change management aspect of a new GTM motion can be daunting. Maybe it doesn't seem like a good fit for your team. Maybe you rely mostly on inbound or enterprise.
But anyone can use a dynamic model, even with some of those constraints. We've helped enterprise teams with a real reason to use geographic territories - for example, those selling health insurance plans with strict state-by-state regulations - move to a more dynamic model within their unavoidable geo boundaries.
How does that work? Our software helps assign a set of sales reps to geographic theaters. Those reps need to work inbound as well outbound from a pool of accounts. So they get a smaller set of accounts to focus on with outreach, while using automated load balancing with inbound hand raisers to keep rep books balanced. This is dynamic books within geo territories.
Why are traditional static territories so bad?
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Traditional territories are outdated. Sales teams have carved geographic territories for a century. For modern sales teams, a static approach is rigid, inefficient, and leaves revenue on the table.
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Territory planning is a nightmare. Annual territory re-carves are a low-information, high-stakes process that takes months, yet still fails to create fairness or balance.
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Dynamic books are better for commercial sales. Instead of fixed territories, give reps an evolving book of accounts based on quality, buying signals and rep capacity. This boosts pipeline by ensuring reps work the best available accounts, increasing focus and effectiveness.
If you want to read more about why traditional territories are a bad fit for many B2B sales teams, read this.
How can I learn more about dynamic books?
There's lots more content about dynamic books here. Or just schedule a call with our team and we'd be happy to talk more about how it could work for your team.
