How to Dominate Your Market with Strategic Sales Territory Planning

Custom Image Sales Territory Planning

Sales territory planning is an integral part of any successful sales team. But it’s not easy.

Many salespeople struggle when they don’t have a solid plan in place. They find themselves spread too thin, wasting time on unproductive activities, or missing out on potential opportunities. And that happens because of a lack of the right resources or knowledge.

So, in this blog post, we will explore the basics of effective territory management and mapping. We will also provide tips on setting up your territories for maximum efficiency and productivity and explain the advantages of using technology tools to streamline the process.

We’ll also share some insider insights on overcoming common hurdles and pitfalls that salespeople often face, so you can avoid them like a pro. So, let’s dive in and strengthen your sales territory plans.

What is Sales Territory Planning?

Sales territory planning refers to creating and managing sales territories for a business. It involves dividing key geographic areas into different sections or territories, assigning leads to salespeople, and setting quotas or targeted goals for each salesperson to achieve.

Let’s say you want to launch a product in three regions or states – New York, New Jersey, and Pennsylvania.

You would first need to divide those regions into smaller subregions or territories. Then, you must assign particular customer groups or leads within those regions to individual salespeople.

Lastly, you need to set specific sales goals for the salespeople to their assigned territories. By doing this, you can track and measure sales success more accurately on a regional level.

In your sales territory plan, you may need to prioritize spending more time in the areas with more potential customers and higher demand for your product.

You may also need to focus on specific industries or target certain types of businesses that are more likely to be interested in your product.

A sales territory management plan can also involve analyzing data and market research to identify trends and opportunities.

For example, you might use data to discover that a particular industry has a high demand for your product in a specific region. You can adjust your sales territory plan accordingly to capitalize on that opportunity.

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Benefits of Sales Territory Planning

Here are some critical advantages of an effective sales territory management plan and why you should embrace this technique.

More Organized and Structured Approach to Sales

A sales territory management plan helps create a well-defined sales plan with clear goals and objectives for each territory. This ensures that you have a systematic approach to your sales efforts. It helps sales reps stay focused, organized, and aligned with the company’s sales strategies.

It also helps prioritize sales activities based on the potential of each territory, optimizing time and effort.

Reduces Travel Time and Costs

Sales territory planning helps optimize travel time and costs by strategically grouping customers within a specific territory. This minimizes unnecessary travel and reduces associated costs, such as transportation expenses and accommodation.

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Enables You To Focus More on Customer Requirements

With well-defined sales territories, you or your sales team can better understand customers’ unique requirements and preferences within each region. This allows you to tailor your sales approach and provide more personalized solutions to their requirements.

Focusing on customer needs can establish stronger relationships with customers, which, in turn, encourages repeat business and drives long-term revenue growth.

Balanced Workload

Proper territory planning helps you evenly distribute your sales efforts across territories, ensuring a balanced workload. This prevents you from overwhelming your sales reps with excessive sales targets in one area while neglecting others.

A balanced workload allows your sales personnel to manage their time effectively and maintain consistent sales performance across all territories.

Offers Better View into Trends and Insights

An effective sales territory management plan gives you a better view of trends and insights within each territory.

You can identify patterns, preferences, and emerging opportunities by analyzing sales data and customer feedback. This allows you to adapt your sales strategies accordingly, capitalize on trends, increase sales productivity, and stay ahead of the competition.

How to Create an Effective Sales Territory Plan

Below are some crucial steps to make sales territory management efficient.

Define Your Target Market

To get started with sales territory management and planning, it’s essential to first define the market you want to target. This can involve identifying your target customers, analyzing their requirements, and evaluating the competition.

You can create more targeted and effective sales strategies with a solid market understanding.

Example: If you sell a software product for small businesses, your market may include small business owners in specific industries, such as retail or hospitality, within a specific geographic region.

Tip: Conduct thorough market research, leverage customer data, and seek input from your sales team and managers to ensure a comprehensive understanding of your market.

Conduct a SWOT Analysis

Once you have identified your target market, conduct a SWOT analysis. It helps you understand the strengths and weaknesses of your product, team, competitors, opportunities, and threats in your market.

This will give you a better understanding of the market trends, competitive landscape, and potential risks.

Example: A strength may be your product’s unique features, while a weakness could be limited brand awareness. An opportunity may be a growing market segment, while a threat could be increasing competition.

Tip: Involve your sales team in the SWOT analysis process to get diverse perspectives and insights as they are on the front lines of selling.

Assess the Quality of Your Accounts

Not all accounts are created equal, so you must assess the quality of your accounts. Evaluate factors such as profitability, customer loyalty, buying behavior of each account, and future revenue potential.

This will help you identify which accounts to prioritize and focus on those with the most significant sales potential.

Example: High-quality accounts may include long-standing customers with a history of repeat purchases, accounts with a high lifetime value, or accounts that align with your ideal customer profile.

Tip: Utilize data and analytics tools to assess the quality of accounts and prioritize efforts accordingly.

Assess the Strength of Your Sales Team

Assess each salesperson’s skills, experience, and knowledge to determine which areas they are well-equipped to handle the sales opportunities and challenges in their respective territories.

You could then provide additional training, mentoring, or resource to help them close more sales.

Set Clear Sales Goals and Objectives

Once you have identified your team’s strengths, establish clear goals and break them into targets, such as monthly or quarterly sales quotas, and communicate them clearly to your team.

Example: If your sales goal is to achieve $500,000 in revenue in a specific territory within a quarter, your targets could be to close 10 new deals, upsell to 20 existing customers, and generate 50 new leads.

Tip: Make sure your goals are realistic, achievable, and aligned with your overall sales strategy.

Clearly Define Roles and Responsibilities

Establishing clear roles and responsibilities for each sales team member to ensure everyone is aligned and working towards the same goals.

Example: The responsibilities of a sales rep in a specific territory may include prospecting and qualifying leads, conducting sales presentations, negotiating contracts, and providing post-sales support.

Tip: Create a collaborative environment where team members can share best practices, support each other, and leverage each other’s strengths.

Encourage Open Communication

Establish open communication channels between your team members, sales managers, and other stakeholders to exchange information, share updates, and address challenges.

Managers should regularly review their sales teams’ performance, provide feedback, and address challenges sales reps face. Sales reps, in turn, should share their insights, challenges, and opportunities discovered on the ground with their managers to inform future strategies.

This is critical for identifying areas of improvement and fine-tuning your sales territory plan to maximize efficiency and results.

Example: Regular team meetings, sales huddles, weekly or monthly performance reviews, one-on-one coaching sessions, and feedback surveys can facilitate effective communication.

Tip: Encourage open and honest communication, and create a culture where feedback and suggestions are valued and acted upon.

Review and Track Results

Sales reps should keep track of their progress toward their goals, analyze their performance, and identify areas for improvement.

Managers should also review sales data and provide feedback to sales reps to help them make informed decisions and optimize their strategies.

Example: Sales reps can review their sales performance metrics, such as conversion rates, deal sizes, and win/loss ratios, to identify patterns and trends in their sales efforts.

Tip: Utilize sales tracking tools or CRM software to effectively gather and analyze sales data.

Leverage Data and Insights

Sales reps should analyze data on customer preferences, buying behavior, and market trends to tailor their sales approach.

Managers should also leverage data to identify patterns and trends across territories and make data-driven decisions to optimize sales strategies.

Example: Sales reps can analyze customer data to identify cross-selling or upselling opportunities or identify potential new markets for their product based on market research.

Tip: Provide training or resources to sales reps on effectively analyzing and utilizing data in their sales efforts.

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3 Tools You Can Use to Create a Sales Territory Plan

Here are the top three tools to create a sales territory plan.

Sales Territory Planning Software

It helps you ensure that sales reps are assigned the correct accounts and that sales efforts are correctly aligned. Here are several ways such territory management software can help.

Plan Optimized Routes

You must ensure your sales reps arrive on time, or the deal may fail before meeting the prospect. And a multi-stop route optimizer solves that problem.

An advanced route optimization software like Route4Me helps plan well-optimized routes in 30 seconds. The software considers traffic, weather, roadblocks, and more constraints to ensure your sales reps get 100% accurate routes and always arrive on time.

If you opt for a cloud-based route planner like Route4Me, you can plan, manage, and track routes and performance anytime, anywhere.

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Efficient Distribution of Territories

Territory management software comes with a territory mapping feature that allows you to draw and name territories, use colors for their display on their map, save the regions as groups, and plan routes based on the selected territory.

Route4Me’s territory management feature even helps you draw overlapping territories and hide or display a specific territory on the map. You can also add unlimited territories by repeating the process.

You can use this feature to segregate your sales team into different regions and ensure each of their set of stops are relatively close together. It helps ensure your team can cover more prospects or clients in less time, ultimately leading to more sales.

Balance Territories

With Rotue4Me’s route planner, you can divide the workload evenly among your team. This helps you ensure no sales rep is overworked and happy at work. Plus, you don’t need to pay overtime costs.

Track Performance

An advanced sales territory mapping software like Route4Me has an interactive map feature that helps you identify where you excel and which areas you need more effort. Therefore, you can create or amend your sales plan to shift and focus your efforts where necessary.

Monitor Sales Reps on the Road

Route4Me offers a GPS tracker that helps you monitor your sales reps’ on the road to ensure they stay on schedule. It also enables you to ensure driver safety.

Learn in detail the top ten benefits of GPS tracking.

Improve Your Future Planning

The best route planners like Route4Me enable you to create mock routes which help you assess the expansion costs.

In addition, such software offers a reporting and analytics feature that helps you identify fuel expenses, the time your sales reps take to get to every customer, how long the sales personnel stay at each prospect’s location, and more. All these data help you better prepare for the future.

Learn in detail why every sales manager needs sales territory mapping software.

Office Software

Office software tools such as Google Sheets and Microsoft Excel have valuable features that help you define territories, conduct market research, identify potential clients, and analyze sales performance.
Excel or Sheets can help you collect and analyze market data, such as size, growth rate, competition, and customer demographics. Below are some useful Excel functions and formulas to plan and analyze efficiently.
  • COUNTIF, SUMIF, and AVERAGEIF to analyze the data and draw conclusions.
  • Conditional formatting or data validation to highlight or filter potential clients based on specific criteria, such as sales potential or customer preference.
  • Charts and graphs to visualize the data and make it easier to interpret.
  • VLOOKUP, HLOOKUP, and INDEX/MATCH to find relevant information.

Customer Relationship Management Software (CRM)

Below are several ways you can use CRM to create an effective sales territory plan.

  • You can store all customer data in CRM, such as purchase history and contact details. This way, you can understand the customer’s needs and preferences and tailor the sales pitch and territory plan accordingly.
  • You can segment leads based on specific criteria, such as industry or geographic location, and assign them to sales representatives based on their territory. This helps ensure that leads are followed up on time and that sales representatives focus on the leads most likely to convert.
  • You can track the performance of individual sales representatives and the overall team. For example, you can see the number of deals closed, the average deal size, and the sales cycle length. It helps you identify areas of improvement for each sales representative so that you can provide coaching or training accordingly.
  • You can predict future sales revenue based on historical data. And by accurately forecasting sales revenue, you can create a sales territory plan aligned with the business’s overall sales targets.
  • CRM software can facilitate collaboration between sales representatives, managers, and other stakeholders involved in the sales process. Sales representatives can share information about leads and customers and collaborate on sales strategies and tactics.

Frequently Asked Questions (FAQs) about Sales Territory Planning

What are the goals for territory planning?

The primary goals of territory planning are resource optimization, increasing productivity, offering better customer service, improving decision making, and efficiently utilizing space.

What are the methods of designing sales territory?

There are primarily five approaches to territory planning. The geographical approach involves dividing an area into smaller territories based on geographic boundaries. The demographic approach involves dividing an area into smaller territories based on demographic characteristics, such as age or income.

The customer-based approach involves dividing an area into smaller territories based on existing or potential customers. The sales potential approach involves dividing an area into smaller territories based on the sales potential of each area. The hybrid approach involves combining two or more of the above methods to create territories that consider multiple factors, such as geographic, demographic, and sales potential.

Final Thoughts about Sales Territory Planning

Sales territory management is crucial and significantly impacts your company’s sales efforts. Following the steps outlined in this quick guide, sales organizations or your sales managers can create a comprehensive sales territory plan that maximizes sales productivity, increases revenue, and improves customer satisfaction.

You must regularly review and adjust the sales territory plan to ensure it remains relevant and effective in meeting the market’s ever-changing needs. However, you don’t need to worry or spend a lot of time planning and managing sales territories if you use a sales territory mapping software like Route4Me.

Don’t take our word for it. Sign up for Route4Me’s 14-day Free Trial and see yourself.

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About author: Rahul Dasgupta

Rahul Dasgupta is a content writer with over 20 years of work experience. He holds a master’s degree in computer science and has written thousands of blog posts on route planning and scheduling, making it easy for readers to learn about these complex topics. Rahul enjoys playing tennis in his spare time and loves cuddling with his pet labrador Shinu. Rahul is a big fan of Roger Federer, Messi, and Bill Gates - he admires their drive to be the best at what they do and their philanthropic efforts.

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About Route4Me

Route4Me has over 40,000 customers globally. Route4Me's Android and iPhone mobile apps have been downloaded over 2 million times since 2009. Extremely easy-to-use, Route4Me's apps create optimized routes, synchronize routes to mobile devices, enable communication with drivers and customers, offer turn-by-turn directions, delivery confirmation, and more. Behind the scenes, Route4Me's operational optimization platform combines high-performance algorithms with data science, machine learning, and big data to plan, optimize, and analyze routes of almost any size in real-time.