Segmentation is an integral component to the territory planning process . When managers are drawing the lines, market segments are just as important as geographical areas.  Without segmentation, sales reps will naturally gravitate towards one of two extremes. They tend to chase the largest opportunities with the fewest accounts or the smallest opportunities with the quickest turn-around time.  There is obviously a major problem with this...everything in between gets lost.

Segmenting allows you to give the appropriate amount of attention to all business sizes, types, and areas.  If you are properly segmented, your sales team should have no coverage gaps.  Here at salesforce.com one of the main ways we segment is by employee band size:

• The first segment is for the largest accounts, Global Enterprise.  These accounts are for the most skilled Account Executives as they have the biggest opportunities and the longest, most drawn out, sales cycles.
• Next is the Mid-Sized Business segment.  As you can imagine these accounts have medium length sales cycles and is a target for our developing Account Executives.
• Finally, the Small Business segment.  At this point I’m sure you’ve caught on to our alignment pattern!  These accounts have the shortest sales cycles and are a perfect entry point for our new Account Executives.

With all this said, it is important to always be running segmentation analysis to make sure you are in fact putting the right sales reps with the correct opportunities.  Remember, getting the right sales rep with the right account, at the first touch, is essential to consistent team success!