You are building or restructuring a field sales team and you are not sure whether you need a Territory Manager or a Regional Sales Manager (RSM). The two roles are very different, and the choice should be made before the search starts.
Before we recommend either one, we want to understand the company's goals, its current sales infrastructure and why it is considering that role. This post sets out how we define the two roles and the questions to settle internally first.
How the two roles differ
A Territory Manager develops business and manages customers within a defined territory, with an individual sales quota. Depending on the product and the business model, those customers could be hospitals, clinicians, dental practices or distributors. Travel depends on the geography and the coverage the customers need. The role typically has no direct reports.
A Regional Sales Manager is responsible for the performance of a team across several territories. That includes:
- coaching, hiring and developing representatives;
- managing the regional forecast; and
- helping the team reach its sales targets.
An RSM's travel includes time in the field with representatives, customer meetings and team development. In some organizations the RSM also manages large corporate accounts.
A simple way to frame the choice: if the company needs someone to build customer relationships and generate sales in an uncovered territory, we would look at a Territory Manager. If several representatives need coaching, direction and accountability to improve performance, we would assess the need for an RSM.
What to settle before the search starts
We begin with what the business wants to achieve over the next 12 to 36 months and how this hire will contribute. Does the company already have RSMs or sales representatives? Who manages them today? What infrastructure and budget are available to support growth?
Then we want agreement on the following:
- The reporting line and any direct reports.
- Whether the person carries an individual quota, a team quota or both.
- Territory boundaries, existing revenue and growth expectations.
- Whether the priority is new business, development of existing accounts or both.
- Who is responsible for large corporate accounts.
- The industry knowledge, customer relationships and leadership skills required.
- Travel expectations and where the person needs to live.
- The support, resources and decision-making authority available.
- What success looks like in the first year and how the role may develop.
The context matters as much as the title. An RSM building a team needs different capabilities and support from someone joining an established team. A Territory Manager opening a new market needs different targets and ramp expectations from someone inheriting a productive territory.
How to set the compensation band
We do not publish pay figures here. A band should come from your own market, and we recommend a salary survey based on the industry, the region, the scope of the role and the skills required.
When you build the band, look at base salary and variable compensation together, and ask whether the earnings opportunity is realistic given the territory or the team. The budget has to support the level of capability the company expects to recruit.
The job description we see go wrong most often
The RSM role is where we most often see a gap between the employer's expectations and the sales leader's understanding of the position. It matters most in small startups and growing organizations, where budgets are tight, investors expect results and revenue growth has to be balanced against expenses.
The company needs to be clear about where this leader can have the greatest impact. Is the priority coaching and developing the team so each representative reaches their individual goals? Or does the role combine team leadership with direct responsibility for large corporate accounts?
A company may well need an RSM to coach a developing team and also manage several corporate accounts. That can work, but both responsibilities need to be clearly defined, with realistic expectations for time, sales targets and compensation. Otherwise the leader may focus on their own accounts while the team does not get the support it needs.
We settle those expectations before the search begins. The job description should reflect how the RSM will contribute to growth, and we then recruit someone whose skills and expectations align with that responsibility.
What to do next
If you are deciding between the two roles, we can help you work through the scope. Read more about the Territory Manager and Regional Sales Manager roles, or book a hiring consult to talk through your field team.