5 Benefits of Modernized Territory Planning Tools

Dec 13, 2017
5 min read
Discover 5 ways territory planning tools are optimizing sales performance, maximizing ROI, and providing sales leaders with insights for strategic planning.

For most companies, it’s the end of the fiscal year. If you work in sales operations, that means planning season – and a whole list of to-do’s – ranging from setting quotas to building out comp programs to identifying new tools and technologies, and allocating territories. Of these, territory planning is most essential for the strategic value it brings to all of these functions.

Everything you do starts with territory planning and tools. You cannot set quotas without having first set your territories. It’s impossible to determine a sales person’s total cash compensation (TCC) if you don’t have insight into workload, opportunity, and capacity. Territory planning represents the bedrock of your sales performance management (SPM) strategy.


Everything You Need to Know About Sales Territories

In last week’s joint webinar, “Optimizing Sales Territories for Strategic Advantage,” Simon-Kucher & Partners and Xactly took a close look at why territory planning tools are so vital to your sales performance, and how modernized territory mapping software gives companies a competitive advantage with:

  1. Higher Revenue
  2. Reduced Turnover
  3. Lower Cost of Sales
  4. Improved Efficiencies
  5. Greater Intelligence

1. Drive Higher Revenue

Territory planning software uncovers insights that are critical to territory optimization and revenue generation. To drive sales volume, businesses must make sure that they have the right coverage in a given territory. Specifically, they need to make sure that they have the coverage to:

  • Serve existing customers
  • Uncover potential new opportunities
  • Support workload with capacity

Without enough coverage in these three key areas, you could be leaving money on the table. With territories balanced by workload and capacity, you gain confidence in your ability to adequately cover a given area.

  Likewise, when a sales person’s workload exceeds their capacity, you cannot serve all potential new accounts, as well as existing customers. Territory planning software helps you understand how much energy is required for both hunting and farming accounts. One particular geographic region may have more net new opportunities than another region. Similarly, if one rep is twiddling his thumbs due to a lack of opportunities, but the guy sitting next to him can’t even keep up with existing accounts, you’re not maximizing revenue potential.

With modernized territory planning software, you can get an instant view of all of your account records based on set variables. For example, you can input data, such as sales potential estimates, white space or green space, to measure your territory balance against that variable. This allows you to quickly compare how distribution in one territory compares distribution in another and make adjustments as needed to balance your coverage.

2. Decrease Turnover

If salespeople don’t believe they’re being given fair opportunities, they won’t stick around. Favoritism and seniority should never be factors in territory alignment. Even if not true, the perception that territories are distributed unfairly hurts morale and increases turnover. You don’t want to lose top performers because of sales territory allocation.

Every time a rep leaves your organization, you pay – for acquisition costs, new training costs, and through lost sales. A demotivated sales team affects employee performance – eating up valuable selling time and costing you much more through turnover.

Territory planning software gives everyone a fair share of sales potential. Software shows reps that territories are being strategically allocated based on specific and defined criteria not management’s gut feeling. This, in turn, increases a sales person’s trust in the territory and the process. [caption id="attachment_534139" align="aligncenter" width="640"]

As Erik Charles, Vice President at Xactly, explained in the webinar, if you give a rep Montana, they might be disgruntled. However, if you can show through data the value of Montana, and the methodology behind your account distribution, you increase transparency and build trust in the system.

With a fair process in place, sales people are happier, turnover is lower, and productivity is higher. 

3. Lower Cost of Sales

To maximize sales productivity and lower cost of sales, territories should be distributed in a logical way. With integrated geo-location data, advanced territory planning software makes this process simpler and more accurate.

By optimizing territory design, you can maximize the return of your sales resources, increasing travel efficiencies and ensuring that territories are distributed in a way that covers all of your sales needs.

Many times organizations will simply separate territories by state borders. However, this approach on its own doesn’t account for the location of future sales potential or existing accounts. With new software, data can be used to drive territory alignment, creating balanced territories that are also travel efficient.

  Emerging mapping software can also provide the precise latitude and longitude of your reps and make an instant calculation regarding travel efficiency. You can quickly get guidance on where new reps should be added to offset imbalances and reduce travel costs.

4. Improve Efficiencies

With so many people across the organization involved in the territory planning process, it can be difficult to get input and consensus. Managing the process is time-consuming and labor-intensive.

Sales territory planning should be a team effort. Modern tools ‘democratize’ territory planning, enabling field sales managers to more easily contribute to the process. With the ability to make changes to their own territories, field sales managers can bring their knowledge of local markets and account relationships. This, in turn, produces more refined and well-aligned territories, improving overall sales coverage and productivity.

With new software, you can automate the planning process, inputting parameters for measuring territories and workload to get a set of territories even distributed by sales potential and workload. Companies using modernized territory planning software have seen a 75 percent reduction in the time it takes them to plan territories.

With the ability to visualize territories and accounts on a map, you get immediate insights into any changes and can easily evaluate territories for compactness and geographic contiguity.

It also enhances agility. Many companies do territory planning on an annual basis; however, there can be times throughout the year when territories need to be realigned. Adam Echter, Senior Director, Simon-Kucher & Partners, illustrated how unexpected market changes might impact the need for territory reassessment. For example, an industry shift or even a natural disaster might increase need for a particular manufacturer’s products or services. With such an occurrence, businesses want to make sure they have the appropriate coverage and that might require territory changes.

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5. Greater Intelligence

With a data-driven process, you’re no longer just drawing arbitrary lines on a map to designate territories. For every point, there’s a data value or a set of data values to help you identify the potential or the priority of a given territory.

 By measuring territories based on data, you can quickly determine if they’re too big or too small to reach your sales targets. With greater intelligence, you can create a more fair and profitable distribution.

 Companies are learning that modernized territory planning has become an essential and strategic requirement for gaining competitive advantage. Sales effort can be applied more intelligently with greater business returns. With increased travel efficiencies and automated territory alignment, your cost of sales decreases while selling time goes up.

You can see where the team will have the highest probability of success and power employee collaboration for better results.

If you’d like to learn how modernized territory planning software can benefit your business, be sure to watch Xactly’s and Simon-Kucher’s on-demand webinar here

  • Sales Planning
  • Territory Design
Jennifer Dignum
Jennifer Dignum
Senior Product Marketing Manger

Jennifer Dignum is Senior Product Marketing Manager at Xactly Corporation. As a seasoned marketing professional and independent consultant, Jennifer has over 15 years of experience working with both private and public companies across a broad range of technology industries.