Realisation factor

The stated discount applied to universe accounts' value at norm in a territory potential, because not every prospect converts. The company's judgement written down, the same for every territory, and on the report.

DefinitionThe stated discount applied to universe accounts' value at norm in a territory potential, because not every prospect converts. The company's judgement written down, the same for every territory, and on the report.

Why stated

An unstated factor is a hidden assumption. A stated one is a decision that can be argued once a year instead of every week.

Not applied to current accounts

Current accounts' gaps are against a norm from real customers. The factor is for prospects only.

How it is used

When valuing accounts a territory does not yet sell to, their value at norm is multiplied by a stated factor below one, from the company's own history of converting such accounts.

Example

Universe accounts in a territory are worth $3.0 million at norm. Historically about 15 percent of such value has been won within two years, so $450,000 enters the potential.

Where it goes wrong

Universe value counted in full. Territories with many prospects look enormous and quotas become unreachable.

Articles that use this term

Territory, capacity and quota planning

Territory potential from your own ledger: how to value a territory before you assign it

How to compute the potential of a sales territory from data the company holds, current revenue plus the gap at norm across the accounts in it, plus the universe accounts not yet buying valued at the segment norm, why that beats a market-size estimate for assigning quota, the identity that keeps territory potentials summing to the company's, and a worked comparison of two territories with the same revenue and very different potential.

16 Sept 20263 min read Territory, capacity and quota planning

Territory potential on four territories: the whole arithmetic on one page

The complete territory potential and quota calculation on four territories, small enough to check by hand: current revenue per territory, the gap at norm across its current accounts, the universe accounts not buying valued at the segment norm and discounted by a stated realisation factor, potential per territory, the share of potential that reaches the company target, the quota per territory, the balance check, and the identity that quotas sum to the target, so a reader can reproduce every figure and then run it on their own ledger and universe file.

17 Sept 20263 min read