The Definitive Guide To Sales Territory Planning & Management
Successful sales strategies are critical to meeting sales goals, whether you’re a large or small business or anything in between. While a scattershot approach might net you some wins, you’ll quickly fall behind the competition if you don’t use a more dedicated strategy.
That’s where sales territory management comes in. It’s possible that you, like many, are asking “What is territory management in sales?” or “Why should I use it?” or “How can I get started without going back to school to get a degree in annoying jargon?”
Never fear … we’re here to teach you all about territory management in sales today.
What is Sales Territory Management?
Once territories are defined, sales managers can schedule sales routes more effectively, reduce wasted travel time and associated costs, and set targeted sales quotas for each area (the number one challenge for more than 60 percent of sales leaders).
A successful sales territory management strategy should include:
- Territories organized by geographic location, account type, product type, sales rep assigned, and any other characteristics that make it easier and faster to serve customers
- Analyses of markets, target customers, and products that help delineate which accounts should fall into which buckets
- Mapping software that allows you to visualize territories easily (discussed in more detail below)
While the territory breakdown and strategy itself is the backbone of a successful sales territory management plan, all of that strategizing requires a group of qualified managers to make sure processes and quotas remain in check. Enter the Sales Territory Manager.
The Essential Role of the Sales Territory Manager
Once an organization has broken its entire area down into territories, it then assigns each territory to a manager. That person oversees a variety of sales rep activities and has a range of responsibilities, including:
- Meeting customer needs and maintaining customer relationships
- Helping current customers refill orders
- Upselling and cross-selling to the customer base
- Cultivating new leads and turning them into new customers
- Setting metrics such as a monthly, quarterly, and yearly revenue goal for the territory
- Using data to optimize sales routes
- Matching reps to the right accounts that meet their skill sets and personality types
- Assigning accounts fairly
- Analyzing whether quotas get met
So now you know what it a sales territory is, and how they’re run... but how do you do it?
7 Steps to an Effective Sales Territory Management Plan
Top performers always have been, and still are, defined by their get-up and go. The most recent statistics paint the same millennia-old picture: the best-performing sales reps spend more time on the phone (or in their car) and less time on their computers compared to their less-impressive colleagues. Plus, more than 80 percent of top performers spend more than 4 hours a day on sales activities.
That’s a lot of getting up and going. And when you combine that much activity, mistakes and inefficiencies can really add up. This is as true for sales territories as anything else.
Again, a good sales strategy is worth its weight in gold. When the organization is on the same page about what the sales process looks like, team members are much more equipped to fill the sales pipeline and meet the needs of leads and customers. Territories make this easier by clearly dividing and conquering.
Let’s see how to set up, assign, implement and evaluate sales territories for your business.
1. Identify Your Market and Analyze Your Customers
The first step in sales territory management at sales organizations of any size, in any industry, is to perform a thorough market analysis. This should include information such as:
- Who do we serve?
- Where are they located?
- Can we break the region down into a single tier, or will we need multiple tiers to manage the entire clientele?
- How do our products and services break down?
- Are there other ways we might bucket locations, such as the length of the sales cycle, the size of accounts, or certain events they regularly attend?
Don’t feel pressured to think this all through yourself. Sales reps are the ones who see and speak to their accounts every day, so bring them in on this. Designing an intelligent system of sales territories is much easier when you get input from the people who will actually use the system.
2. Develop Your Team’s Strengths and Build Resources
You will need several resources in order to design an effective sales territory management system. For one thing, a good CRM is important when getting ready to launch a new sales plan. Without the ability to track details about your various accounts, you won’t be as effective at segmenting them.
For another, you’ll need sales software that offers tools to streamline your sales calls. Think checklists for meetings, sales data software to help design and meet goals, and mileage trackers. Happily, there exists software that combines all of these, which we will discuss below.
Your team’s strengths also matter. Some of your account reps are great at closing large deals. Others excel at managing big accounts, while still others do their best work with smaller ones, dealing with clients quickly and moving on. None of these skills are more important than others; they all contribute to a successful sales year if you employ them correctly.
3. Set Measurable Goals
Keeping your sales pipeline full is another critical aspect of sales territory management. To do this, it’s important to set measurable sales goals. That way, people know what they’re shooting for in terms of:
- Lead development
- Account development
- Upselling and cross-selling
- Territory expansion (if applicable)
Helping identify sales KPIs and goals for each of these will help motivate reps to pursue prospects at every stage of the buyer cycle, each and every day. Giving people measurable goals to shoot for is one of the most important aspects of a sales territory plan, so don’t skip this step.
4. Define Sales Territories
While it does make sense to begin outlining different territories based on geographic location, that’s not the only thing you should take into account. The trick is to align your team’s strengths with the accounts that need servicing, then decide how to organize them.
When using sales territory mapping, definitely break your customer segment down into geographic areas first. However, if a particular territory will be serviced by more than one rep, it makes sense to use additional demographics to segment it further. It’s OK to create new territories if necessary.
For instance, let’s say you’re a packaging company. You have three reps who handle one quadrant of the city. That quadrant happens to be the industrial area, where your clients fall into three basic areas: buildable furniture, roofing supplies, and solvents.
It goes without saying that these are very different industries. Therefore, rather than dividing the quadrant into three smaller areas by geography, it makes perfect sense to divide them by type of company. That way, your reps can dig deeper into each industry, expand their knowledge, find new accounts and meet ever-higher sales targets.
5. Assign Duties and Territories to Reps
Next up on the sales territory management checklist: distribute the right territory assignments to your salesforce.
Each member of a sales team should know exactly which accounts they serve and where they’re located. If you need to reassign salespeople to match the needs of your new map, go ahead. Remember what we said about dividing by industry instead of pure geographic area, for instance.
The most important point here: make sure the distribution is fair and transparent. Most sales reps are paid on commission, meaning if one rep gets all the highest-value leads, the rest are missing an opportunity for higher earnings. Transparency and equality is key when assigning territories and distributing leads—otherwise, your reps may lose faith in the company.
6. Create a Routing Plan
Once your basic sales territory management map is complete, it’s time to create a plan for how your reps will visit specific territories. Rather than leaving it up to sales representatives to decide how they’ll complete their field sales calls that day, though, let’s let the machines handle this one.
Why? Because this part of sales territory planning is much easier when you use an algorithm. Outside sales already require a lot of time and energy; why sit in the office doing manual labor when you could instead feed all the addresses into an algorithm and get a perfect route in seconds?
We’ll let you (and your software) do the math on that one. Your CRM may even be able to work together with your route planning software via API integrations, making it ultra-easy for reps to pull sales call location data in and automatically plan a route for the day.
7. Monitor, Evaluate and Analyze
Understanding the quality of your various territories is also important because it can increase your sales productivity as well as the ROI of all sales activities. Ask questions such as:
- Is the new map working?
- Are revenues up?
- Do sales reps seem happy?
- Are the right people on the right accounts?
- Are people spending less time in the car?
- Do you have more leads?
- Is word-of-mouth marketing increasing?
You can—and should—track all of these metrics in a CRM. Then, use them to evaluate how well your territory plan is working and adjust it as necessary.
6 Best Practices for Sales Territory Management
You’ve got your step-by-step plan for building a sales territory map. Here’s how to use it most effectively.
1. Consider Targeting Market Segments as Their Own Territories
Yes, yes, we did tell you earlier to start defining territories by geographic location. However, if you have specialty segments within a geographic location that require a specific level of expertise, you might consider separating each location out further and consolidating them as their own territory. This will reduce overhead, increase the expertise of reps and reduce customer churn.
It’s okay if this overlaps with other sales reps’ beats. As long as the industries are different, there shouldn’t be any serious toe-stepping.
2. Set Sales Goals for Each Territory
As well as setting sales goals for the company, individual products, and each rep, you want to set goals for each territory. How much do you expect it to bring in? What can you reasonably hope for in terms of profit at the end of the month, quarter and year? Then make these numbers available to everyone on the team.
3. Divide Accounts Fairly
Salespeople often get hung up on the number of accounts, but that’s the wrong approach. Determine what’s fair based on revenue instead, so that even if one person has 10 accounts and one has 100, both reps have the opportunity to take home roughly the same amount at the end of the year. (Naturally, this excludes accounts they cultivate and commissions they earn on their own.)
4. Use Quantitative and Qualitative Evaluations
Don’t always rely on data alone; qualitative evaluations are useful too. While you might analyze the worth of some accounts based on the profits they bring, others may prove valuable for word-of-mouth marketing, for repeat business, or for how quickly it’s expanding … e.g. future revenues.
5. Make Sure Your CRM Travels Well
If you can’t use it anywhere, your customer relationship management system isn’t doing the trick. Use a CRM that includes territory mapping software, works on and off WiFi, and is compatible with all devices. Otherwise, you might find yourself without crucial intel at the wrong moment. (Is there ever a right moment to be without crucial intel, though?)
6. Stay Flexible
Just because factors are ‘Just Right’ when you create your sales territory management plan, doesn’t mean they’ll stay that way forever. Don’t be like Goldilocks expecting others to do the work for you. Instead, stay flexible, reassigning accounts and reimagining boundaries as necessary.
Best Territory Management Software
There are several choices when it comes to territory mapping software, which is critical for the effective management of your different routes, no matter how you divide them up. Your software must:
- Be data-driven
- Give real-time updates that allow you to make use of the most current account data
- Include automation of sales processes to reduce the manual load on your sales reps
- Offer sales data and sales performance capabilities that overlay on your map, so that you can tweak routes and assignments for greatest ROI
- Integrate with Excel or other programs you use
- Provide fully functional CRM capabilities, or integrate well with your CRM
Below are a few of the best options.
Best for: Sales reps in almost any industry who want the maximum a customer relationship management system can offer and are willing to learn; Leans toward SaaS industry
What makes it unique: Combines the best of robust functionality with affordable pricing for SMBs
True, Close is mainly focused on providing top communication tools and sales reporting to inside sales teams. But combining Close with other mapping tools can give your sales team a powerful suite of sales tools that keep your deals fresh and at hand. You never have to worry about losing a sale due to lost customer data, a missing address, or any of the other hundreds of things that can go wrong. Plus, because it’s always on hand, you can make customer notes on the go, enriching each account’s notes with every visit.
Close also allows you to create multiple Pipelines so you can track essential sales funnel metrics for different types of sales, and you can use Custom Fields and Activities to track outside sales efforts right in the lead profile.
Ready to see a major jump in revenue and ROI? This might be the answer you’ve been looking for.
Best for: Companies that have a large number of customers and make lots of sales calls; Leans toward the medical device and automotive industries
What makes it unique: Heavy emphasis on sales and marketing based on venerable time in the industry
Salesforce Maps minimizes the amount of work you have to do planning for a day of sales calls. Using location intelligence, it helps users plan routes, track activity, and mileage, and plan for meetings using checklists. That, combined with their sales and marketing focus based on decades of experience in the industry, makes them an excellent tool for sales territory management, from the office to the field, especially if you work in large volumes.
We Map Sales
Best for: Companies that are very analytics-driven in making territory decisions; Leans towards retail and wholesale industries
What makes it unique: Amazing combination of different geospatial and analytical tool types in one app
Using the same basic idea of overlaying accounts onto a geographic area, We Map Sales helps users design optimized territories. Then they can use the program to plot routes, track analytics, and more. Their tools include geo-mapping, territory management, automated territory optimization, and analytics reporting to give you a well-rounded idea of where to go in a day, who is managing what, and how that’s working out for the company overall.
Best for: Companies that want to tap into their geographical data from many angles; Leans towards nonprofits and financial service industries
What makes it unique: As a Salesforce partner, it benefits from the latter’s long time in the industry
While it doesn’t include many of the same robust CRM features that a system like Close does, Geopointe still uses GPS data effectively to merge accounts with locations. It too can help you find the best approach to daily outside sales calls, take notes and work faster. It provides a raft of ways to access and use geospatial data in the decision-making and sales process and helps to streamline sales calls for users worldwide.
Best for: Companies that are new to sales mapping and want a user-friendly tool; Leans towards the medical device and wholesale industries
What makes it unique: Perhaps the easiest-to-use sales mapping software on the market
Badger Maps’ entire goal is to make it easy to find where you’re going, do what you need to do, take notes, and move on. It is a highly tailored system geared entirely toward the field process. As such, it is one of the best options for those looking for a field-specific app. However, it isn’t the best for anyone who wants a robust customer relationship management tool that works in the office and field.
Best for: Businesses whose main focus is outside sales and whose reps will all benefit from sales mapping; Leans towards construction, renewables, and environment industries
What makes it unique: Designed entirely for outside sales reps, SPOTIO devotes its functionality to CRM mapping
With maps that turn your customer profiles into a richly detailed visual territory management map, you’ll never feel lost again. Not only is it easy to divide up territories for your outside field reps, you’ll have the ability to track activity, prospect in the area, automate manual tasks, and get where you need to go.
Best for: Companies that want an all-in-one sales management tool with a focus on outside sales; Leans towards retail or food and beverage industries
What makes it unique: Great for companies with a merchandising focus
Describing itself as the link between office and field, Geo Rep seeks to provide outside field reps an umbilical cord back to the office while enabling freedom of movement. With planning, directional, task-based, and insight tools, reps have a rich informational system at their fingertips on the go. It’s a good tool for small businesses but may not scale well with larger ones.
Map My Customers
Best for: Sales reps and companies who really want to visualize their leads, prospects, and customers as pins on a map; Leans towards wholesaling and medical device industries
What makes it unique: Outlines which areas represent the most business opportunity on the map, so you can focus there
Map My Customers is a true command center for those who want to take their customer relationship management system with them wherever they go. It’s easy to build and optimize routes, find new customers along the way, and view and meet goals. Voice notes and call/email organization are a bonus, though learning the whole system will take significant upfront effort.
It’s Time to Build a Sales Territory Plan
Ready to get started with sales territory management? The best thing you can do is read through the step-by-step guide above for mapping your territories, then immediately get started assigning the right accounts to the right people. Doing so will save you time and money, utilize your resources better and keep your customers happier.
And when customers are happy, everyone wins.
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