If you asked the owners of the ten largest distribution companies in your sector to describe their biggest unsolved sales problem, territory design would not appear on most of their lists. It should be near the top of all of them.
Territory management is the infrastructure of a distribution sales organization. The decisions embedded in how territories are drawn, how accounts are assigned, how workloads are distributed, and how performance expectations are calibrated to what is actually achievable in a given geography determine the ceiling on what the sales team can produce, regardless of how talented the individuals in those seats are. A well-designed territory makes an average rep more productive. A poorly designed one makes an excellent rep less effective than they should be. And most distribution company territories were designed at some point in the past and have been modified at the margins since, without being fundamentally examined.
The reluctance to examine territory design is not irrational. It is one of the most politically sensitive actions a sales organization can undertake, because every change affects someone's livelihood, and the people most affected are typically the senior reps who have been with the company longest and who have the most relationships with ownership and senior leadership. The account that a senior rep has managed for twelve years is, in the senior rep's understanding of the world, their account. The suggestion that it might be reassigned, or that the territory should be restructured based on opportunity rather than historical assignment, is not received as an operational question. It is received as a question about loyalty and tenure.
How Territory Problems Accumulate
Distribution territories are typically built at a specific point in time to serve a specific configuration of accounts, geography, and rep capacity. When the company was smaller, the territories made sense. As the account base grew, as some customers consolidated and others emerged, as some geographies became more productive and others less so, the territory structure was adjusted at the edges without being reconsidered from the ground up. A new account got added to the territory that was geographically closest. An account that was lost got removed without prompting a review of whether the remaining assignments still made sense. Over several years, what was originally a rational design becomes an artifact of decisions that were each reasonable at the time and that collectively produce an irrational result.
The most common manifestation of this accumulated irrationality is the territory where a significant portion of the company's available market opportunity sits inside accounts that are being served by a rep who does not have the capacity to fully develop them, while another rep in an adjacent territory has excess capacity and an account base that is growing slowly. The opportunity is there. The sales force is there. The design of the territory structure is preventing them from connecting.
A second common manifestation is the senior rep with a territory that is producing acceptable revenue while requiring relatively modest effort, because the rep's established relationships in the territory have created a base of orders that essentially renew themselves. This rep looks productive on a revenue basis. On a market share basis, the territory is underperforming against its potential, because the rep's workload does not include the kind of active development that a less established territory demands. The company is paying a senior rep's compensation for a territory that is being managed at a maintenance level.
The Conversation Nobody Wants to Have
Sales leadership at distribution companies understands, generally, that territory design is a problem. They have seen the data on uneven productivity across their rep base, and they have a working sense of where the mismatch between rep capacity and account opportunity is most acute. What they rarely have is a process for addressing it that does not immediately generate personnel conflict.
The senior rep who has been with the company for fifteen years and who has built their income and their professional identity around a specific set of accounts is not going to receive a territory redesign proposal with equanimity, particularly if the redesign transfers some of their established accounts to a newer rep. The fact that the redesign is commercially sensible does not reduce the interpersonal difficulty. Sales managers who have been through this experience once are understandably reluctant to initiate it again, and companies that have deferred the conversation for several years have typically allowed the problem to compound to a point where the redesign, when it eventually happens, is more disruptive than it would have been if it had been done earlier.
The companies that have solved this problem did not solve it by finding a way to make the conversation comfortable. There is no version of territory redesign that is politically painless. They solved it by building the commercial rationale for the redesign on data that was difficult to dispute and by making the case for the change in terms of what the company needed to accomplish rather than in terms of what individuals deserved. The conversation is still hard. The outcome is consistently better than continuing to operate a sales structure that was designed for a company that no longer exists.