The problem with passive territory management (and 4 rules for effective territory management)

How many accounts does each of your account executives manage?

Have they worked on those accounts recently, or are they just sitting there?

What would happen if you moved inactive accounts from a rep's name?

Often, when we audit a CRM, there's little consideration for accounts per rep, engagement per rep, and a strategy for distributing accounts fairly and effectively.

Typically, there's a generic account/lead rotation where leads remain indefinitely in the rep's name.

In a recent case, I found some reps sitting on 3,000-4,000 accounts, including most of the high-value ones, while others struggled to hit their quota with a book full of low-value accounts.

Why does this matter?

A passive approach to account management means important accounts aren't worked effectively. Reps may sit on good accounts, blocking others from working on them and allowing more proactive competitors to win the business.

This is unfair to newer sales reps, highly wasteful, and ensures most opportunities are missed as the available accounts are simply too large to work actively.

This can lead to several issues, such as reps "locking in" accounts and waiting for opportunities to come to them or claiming the best accounts and neglecting others.

Four rules for effective territory management:

Make territory management ongoing, not static

Reps should ideally have a smaller, more focused territory to give each account the attention it deserves.

If an account is qualified out due to being a poor fit, a new, better-fit account should be added.

A too-large account list will stretch the rep thin.

A too-small or unbalanced list will make hitting the quota nearly impossible.

A static list will ensure stagnation and the status quo.

Accounts belong to the company, not the salesperson

High-potential accounts with unengaged reps are a massive waste. If a rep isn't actively working on a high-value account, leaders should reassign it to someone who will.

It's not uncommon to see accounts with little action turn into wins simply by moving them to a rep willing to put in the work. Conversely, I've seen sales reps sitting on all the best accounts for years, locking out colleagues while just "waiting for things to happen."

The result is a dysfunctional team with frustration, friction, and lagging results.

Balance territory management and total addressable market (TAM)

The ideal number of accounts per rep varies based on parameters such as TAM, industry, sales cycle length, and account value.

A manageable number aligned with the nature of your business allows reps to give each account the attention it deserves.

No structure will be perfect

No matter how you structure things, accounts will slip, reps will be unhappy, and reps will try to cheat the system. 

For example, we had a customer who wanted reps to do ongoing check-ins on the accounts they wanted to keep and the next steps planned for said accounts.

If no next steps were there, without any active touch-points or activities to work the account, the account would be rotated to another rep with available capacity.

Here, we discovered that some reps set up automated recurring "phantom" tasks and next steps to trick the system, allowing them to reserve good accounts they couldn't bother to actively work.

Naturally, this kind of behaviour should not be accepted, and depending on the frequency and severity of the cheating, it's a clear yellow/red flag.

But just because it's difficult does not mean it should be ignored. By getting it 70-80% right, you'll be far ahead of most other companies.