People may not realize it, but sales territory management is crucial. It can promote team cohesion, provide a broader customer base, improve sales, and boost the morale of your sales force.
What then is it, and what do you need to concentrate on to manage sales territory effectively?
What Is A Sales Territory?
A sales territory is a set of clients or a region that falls under the purview of a sales team or an individual sales rep. The typical criteria used to determine these areas include geography, potential sales, historical data, or a mix of these things.
Maximizing sales and profitability while effectively allocating resources are the ultimate goals of this separation of responsibilities.
Sales territories are crafted with effective sales territory management so that sales representatives may manage ongoing client connections inside that region and produce adequate opportunities to meet sales quotas.
Sales representatives need a sufficient number of clients and prospects to be profitable at managing sales territories, but not so many that they are overworked to the point of disregarding some client relationships.
The most acceptable sales territory management practices include a continuous cycle of monitoring the territories and making adjustments as necessary to support your sales team and the continued achievement of their sales objectives.
Why Is Sales Territory Management So Important To The Sales Team?
By using territory management, sales managers can better distribute resources and increase possibilities for their team. Some of the main benefits of territorial management include:
1. Fostering stronger connections with customers
Based on certain traits like personality or customer lifecycle, you may organize your territory to pair specific agents in your sales team with prospects and customers you think are better suited.
2. More Strategic Coverage of Territories
Your sales reps will be more productive with the support of territory management, which also guarantees that your best sales reps are working with the best accounts and regions.
3. Delegate a balanced workload
By re-evaluating your regions, you can share the workload equally across your sales reps. In addition, data can be used to align sales territories better.
4. Increasing rep selling time
Sales reps can better spend their time selling when given territory, routes, and clear objectives.
The sales territory manager will provide all these through sales territory management software.
All of these sound fantastic, but what exactly goes into a successful sales territory management process, you might wonder?
So let’s deal with the steps of creating a top-notch sales territory management plan.
7 Steps To Creating Effective Sales Territories Management Plans
Starting from the ground up, the sales territories serve as the foundation. Therefore, it cannot be very comforting to define new regions.
However, you may split and assign territories, so they are helpful and well-suited to both the sales reps and your customers with the correct mentality, procedure, and practical territory management tools.
The fundamental phases in creating a sales territory are as follows:
1. Examine the market
The best sales territory takes into account your market and clients.
Therefore, analyzing your current market can provide helpful information that will enable you to successfully divide sales territories and constantly empower the field sales teams to achieve sales targets.
This implies that it will also result in cost reduction, an improvement of the marketing and sales procedure, and an increase in profit.
You should consider the following:
- How many customer accounts do you currently have?
- How much money do these accounts spend?
- Where can I find these accounts?
- Are there any client location clusters?
- How many new prospects and accounts are you acquiring?
- Where can I find these?
This data can assist you in defining your existing market and comprehending the business climate. Explore the detailed guide about the sales plan.
2. Break down and divide territories
You can safely divide close-by accounts and prospects into geographical regions of comparable value using preliminary sales data and the details you discovered when analyzing the present market.
The number of accounts or account income can represent this value (and potential revenue).
To ensure there are no overlaps, visually map the regions to see where they line up.
Of course, you can lay them out on a map, but territory management software will help you do this more quickly and precisely.
3. Assign sales reps to each territory
You can allocate a sales rep to each territory once you’ve mapped them out. In this step, you should consider where your sales team is located, just as you did earlier when you considered the geographic locations of the accounts and prospects.
Is your sales team comprised of sales reps from different locations?
Geographical location will be one of the main factors determining how sales reps and territory are matched in field sales.
To enhance efficiency, assign a sales territory to a rep situated in or close to each. It won’t be adequate to place a rep in a sales territory far from where they are.
Additionally, if there are variations in territory value, think about assigning your more qualified and adequate sales reps to the higher-value sales territories to monitor sales rep and territory performance.
4. Check the account’s value
You must assess the value of each account inside the market once you’ve determined the ideal target market for your sales region. Depending on the goods or services your company provides, the measurement could be quantitative or qualitative.
For instance, a beverage firm might order its accounts’ worth according to net profitability. In contrast, a business that significantly relies on client referrals might concentrate on accounts that are more likely to refer business to them.
You can prioritize each account in your sales territory plan by figuring out the value of each one. Your sales team will be able to offer these accounts the attention they require by knowing which accounts are represented in their quota metrics. Check out how account-based selling works.
5. Examine your territories
It’s time to examine the qualifications of the sales territory as a whole after evaluating the quality of each account in the territory. This method is subjective and based on various company goals and priorities, just like the account values.
Using the consumer packaged goods example again, if you have a food and beverage territory and a health and beauty territory, you might notice that they do not share the same sales process, churn rates, and even repeat purchasing patterns.
These are only a few instances of variables that may have an impact on a sales territory’s quality.
You may determine internally that the sales cycle is the primary factor influencing territory quality, and you will utilize this element to rank each area from top to lowest.
You might consider the health & beauty territory to be more outstanding quality than the food & beverage territory because of its shorter sales cycle, which could result in quicker revenue for your team.
Include your entire team or assign reps in these conversations to better understand the region’s value. Since they live and work there every day, sales leaders are the only ones who genuinely understand the territories and the customers in them.
By doing this, you may allocate the right reps to each territory to maximize efficiency and allow for an effective sales territory plan.
6. Understand your sales teams and the strength of your individual reps
This is one of the most crucial steps in building the best sales territory management plan. It would be best if you allocated reps with the necessary abilities to each sales territory after evaluating its quality to help it grow and perform at its best.
Assigning a sales representative with experience in closing large sales in an area dominated by large enterprises to a similar sales territory is an outstanding example of assigning sales territories to maximize your sales efforts.
This is not to suggest that, as a sales manager, you should handpick particular reps in your sales team to cover particular regions.
To grow sales organizations and maximize your sales activities, you can rotate the reps and assign new territories, so all reps get enough experience. In addition, you can promote a culture of continual learning rather than confining reps to a specific territory that is so highly specialized that they end up creating silos.
Introduce best practices for each territory using each rep’s knowledge so they may be shared with the rest of the teams.
Your sales team will be given the tools they need to provide customers with an incredible purchase experience if you carefully assign qualified reps to accounts.
7. Set sales goals
You should create goals for your company using the data you obtained about your clients, team, and resources. Here are a few to think about:
- Monthly income earned
- Number of efforts to sell per week or month
- Number of completed sales each week or month
- The ratio of leads to closed sales each week or each month
You must develop a quantifiable plan for achieving each of the sales goals you have set for your sales territory plan after you have identified the goals.
Each goal-setting strategy ought to contain:
When a goal is written down, it becomes solid.
The target statement should explain what you hope to accomplish through different sales efforts and what is at risk.
Key milestones and deadlines
When a goal can be divided into numerous smaller milestones, the path to attaining it becomes much more apparent. By dividing the objective down into smaller milestones, such as $3k by day 10, $6k by day 20, etc, you can monitor progress if, for instance, your goal is to generate $9k in monthly revenue for a specific product in your company. Find, what is gross revenue.
Metrics for gauging professional performance
Metrics like leads created, leads contacted, and leads closed provide excellent insight into productivity and can show how your team is making progress.
Goals should encourage your company to grow and expand while still being reasonable and manageable.
Sales Territory Management Best Practices
Avoid sales territory conflicts
How can you, as a sales manager, assign territories fairly? And how do you make sure reps aren’t stealing accounts from other reps once they’ve been assigned?
Consider the following to lessen the likelihood of team management and sales territory conflicts:
Amount of accounts
In contrast to those who flourish with large accounts, sales representatives who perform better with smaller businesses should be given fewer clients. Even though the quantity of accounts varies, all reps should have a similar overall revenue target.
Make sure to create routes that are designed with a suitable number of stops and with the least amount of travel between appointments.
Some people have a stronger connection to certain sectors while driving sales. Give each sales representative extra accounts once you determine their strengths and focus areas.
Focus on the most valuable sales territories
Give your high-priority territories your best performers.
Though the term “top performer” is a relative one, keep in mind that your rep with the highest sales-per-client may not be the best fit for a territory with a number of small businesses that take longer to make decisions.
Hire an outstanding sales team lead
Without the proper sales leader to oversee its implementation, a sales territory strategy is pretty much meaningless.
When filling out this position, take your time and do your homework because this individual will be in charge of developing the sales region, managing the team, and aligning stakeholders.
Monitor your customer needs and data
Agile territory management comes naturally. You can’t count on a certain territory to continue responding the same way to your sales process. Customer situations can change, and you must be able to do so swiftly.
To ensure you’re tracking what is and isn’t working for you, your reps need to keep records of their sales data in a CRM.
Ask your representatives to document and maintain notes from their appointments. To ensure that your regions are being catered to as effectively as possible, keep up with every trend there.
Track mileage and costs
Reps with a lot of ground to cover should receive some degree of compensation for their travel expenses (gas, meals, and basic vehicle maintenance). Allocate resources for the well-being of your reps. It would only motivate them to work better.
Remember new leads
Efficient territory management is not limited to existing customers. Although it’s an important step in the sales management process, it’s not the only one. Always look for new business opportunities.
That does not imply that current accounts should be ignored. Even yet, you still need to satisfy them, especially the high-volume ones. However, if you want to expand your company, you must continually look for new chances in your territories. Each type of consumer performs a crucial role in the success of your company, so both deserve equal attention. Meet the detailed guide about lead to revenue management.
We’ve accomplished a lot. Spanning from correctly establishing new territories to reevaluating and modifying your current sales territory performance. As you can also see, adopting cutting-edge technologies can greatly improve the efficiency and effectiveness of your sales territory alignment and mapping activities.
Review this article with your management team and decide what adjustments can be made right away to improve resource utilization, enhance your territory management approach, and regularly outperform your team’s sales targets.
Don’t forget to equip your sales team with one of the finest sales tools on the market, trusted by thousands of happy customers, Sloovi Outreach is at your service.
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