One of the essential pillars of a successful business is an effective sales territory strategy. Studies show that effective territory management can increase overall sales, improve customer coverage, and reduce costs.
Territory planning requires careful thought and consideration because getting it right the first time is crucial. Constant changes in territory division can dampen salespeople’s productivity and take a toll on employee morale. And from the client’s perspective, frequent changes in account managers lead to unstable relationships.
In this post, we’ll cover exactly how to execute sales territory planning and management. You’ll also get best practices for sales territory alignment, design, and engagement. But first, what exactly is a sales territory?
Understanding, planning, and managing sales territories can make or break your sales efforts. Your reps need a firm grasp on the specific customer segments they’re accounting for and the general framework of your team’s territories overall.
How you structure, define, and distribute the territories you work with has massive implications for your organization’s sales efficiency and bottom line.
A solid sales territory plan and exceptional territory management can be significant assets to a successful sales team. So here’s some perspective on how to do them right.
Building a Sales Territory Plan
If you choose to assign your sales territories without a plan, you’re no different from a person who sets out on a journey without a destination in mind.
Before long, you’ll realize that you’re wasting valuable time and resources that could have been better spent elsewhere. To help you save time and resources, here are the best sales territory rules of engagement to follow.
1. Define your market.
To effectively set up territories, sales leaders must first understand the environment of their business. There are numerous ways for a business to define a market. Factors could include geography, size, and consumer demographics — among others.
Know what is unique to your business and prioritize based on what your climate demands. A solidified market will lead to lowered costs, increased sales, and a foundation for setting up effective sales territories.
2. Assess account quality.
After a target market is determined, sales leaders need to evaluate the value of each account. The measurement could be either quantitative or qualitative, depending on the product or service the business offers. For example, a beverage company might rank the value of their accounts by net profitability. In contrast, a company that relies heavily on customer recommendations could focus on accounts that are more likely to provide a referral for their company.
By identifying the value of each account, you can prioritize accordingly in your sales territory planning. Repsly has a great product that can help you calculate your custom information to assess your organizations’ clients.
Here is a quick example of what your calculations would look like:
3. Assess territory quality.
After assessing the quality of each account, it’s essential to rank territories. As with the accounts’ values, this process is subjective based on different business needs and priorities. For example, if your business sells products across industries, your territories could be divided and quantified by those industries. Determining what sales territory supports which areas of the sales funnel will also help you score territories into high, medium, and low value.
To get a better picture of territory value, include your sales team in these discussions. After all, no one knows the territories better than the reps who work within them each day. That way, you can assign the appropriate reps to maximize the potential of each territory.
4. Assess rep strengths.
The next step towards effective territory management may be the most important of all. After determining the quality of each sales territory, you must assign reps with the applicable skills to develop and optimize each set of accounts. An example of an excellent sales territory assignment is assigning a territory defined by large enterprise deals to a rep who has experience closing big deals. By strategically assigning qualified reps to accounts, you will empower your reps and ensure the client receives the best possible service.
Here is an example of how to calculate your rep’s performance. You can use Repsly to find out who is the strongest performer in your organization.
5. Review and consolidate.
The four steps outlined above prepare a business to put a sales territory plan into action. The last thing a business needs to do is a final diagnosis of costs associated with each territory. Analyzing cost metrics — like comparing ideal versus the actual number of visits and mileage per rep in each territory — will help managers zero in on specific inefficiencies in the system.
After you have reviewed your plan, consolidate it. By following these five steps, you’ll be building a sales territory plan that’ll make your workforce happier while increasing customer growth and profits.
1. Define your market.
To effectively set up territories, sales leaders must first understand the environment of their business. There are numerous ways for a business to define a market. Factors could include geography, size, and consumer demographics.
2. Assess the quality of your accounts.
After a target market is determined, sales leaders need to evaluate the value of each account.
3. Assess the quality of your territories.
Rank your territories in order of sales potential. To get a better picture of your territory value, include your sales team in these discussions.
4. Assess the strengths of your sales team.
Each account will need a particular skill set to close the deal. Some accounts might appreciate soft skills like empathetic communication while others rely on hard skills like ROI analysis to move forward. Identify these skills in your sales reps and design your sales territories accordingly.
5. Review and consolidate
Analyzing cost metrics — like comparing ideal versus the actual number of visits and mileage per rep in each territory — will help you recognize inefficiencies in the system.
There are some strides businesses can take to ensure their sales territory management is as efficient and effective as possible. Below are some of the sales territory management best practices.
Sales Territory Management Best Practices
Practice sound cadence management.
Proper cadence management — the process of prioritizing, structuring, timing, and conducting account interactions — is central to successful sales territory management efforts. Your reps need to gauge account priority level, group accounts based on that assessment, and determine the best frequency, pattern, and nature of touches between them and contacts.
Cadences will differ from territory to territory. It might take some trial and error, but properly managing territories often hinges upon how you contact the prospects you’re trying to reach within each one.
Consistently keep track of your data and customer needs.
Territory management is dynamic by nature. You can’t expect a specific territory to remain stagnant in how it responds to your sales strategies. Circumstances change, and you need to be able to change with them.
That’s why your reps need to keep records of their sales data in a CRM — making sure you’re keeping tabs on what is and isn’t working for you. Have reps maintain notes from their appointments and keep them on record. Stay abreast of every trend within all your territories to ensure they’re being catered to as effectively as possible.
Don’t forget to pursue new leads.
Effective sales territory management isn’t specific to existing accounts. Though this is a crucial component of the process, it’s not the only one. Always pursue new business — one way or another.
That doesn’t mean forgetting about current accounts. You still need to keep them happy — particularly high-volume ones. But if you want to grow your business, you have to consistently pursue new opportunities within your territories. Both kinds of customers serve an essential function to the health of your business, so both need their fair share of attention.
Remote Territory Management
Not all sales territories require an in-person presence, and there are instances when your reps will have to work remotely. If this is the case, your reps still need to abide by the best practices mentioned above, but in all likelihood, they’ll need to adjust their cadence.
A cadence that rests on in-person interactions will have to change if those interactions can’t happen anymore. It might mean finding a new progression that incorporates more phone time and remote tools like video calls.
It might take some trial and error, but you have to land on a cadence better suited to handle remote interactions — and that might not look like the one your reps are used to using.
An effective sales territory design can be the difference between well-organized, cohesive, successful sales efforts and inefficient, scattershot wastes of resources.
If you understand and implement the sales territory rules of engagement discussed in this article, you can increase your chances of success no matter the territory you find yourself in.
Editor’s note: This post was originally published in June 2021 and has been updated for comprehensiveness.
SOURCE: Sales – Read entire story here.