Bonus Benefits: the OTHER Advantages of Data-Driven Territory Management

Jun 09, 2021
3 min read
Modern territory management is seen as a tactical rather than a strategic exercise. While effective territory management has a slew of well-documented benefits, there are still a few more bonuses that aren’t frequently talked about. Find out what the other advantages of data-driven territory management are in this blog.

Budgets are a common tool everyone uses, in both their professional and personal worlds. For example, in your day-to-day household, you plan for things such as your mortgage, insurance, and utilities, all the way down through food and clothing. 

Think of sales territory management as a budget for your organization. Territory management is like the sales version of that. Within your management structure, you use your data to plan out the more obvious things, like creating territories, establishing revenue goals, expanding on current target areas, and uncovering new opportunities. 

But what about the lesser-known uses? What other semi-covert uses do modern enterprises use territory mapping software for? Here are three additional advantages data-driven territory management offers:

1. Resource Planning

Your territory map is one of the most important parts of your sales plan because it sets the baseline for your quota, resource, and incentive compensation planning. Since it is a critical part of your sales planning process, it MUST be in lockstep with other functions such as:

Quota Planning

Quotas inform or control nearly 25 percent of an organization’s total sales-related spending.

However, many organizations don’t have visibility into the variability of sales teams’ quota

performance. Territory management helps to mold and inform quota because it tracks and analyzes specific geographical market potential, the number of current and new opportunities, current success rate in said territory, and the capabilities of the salesperson assigned to service the area.

Having granular insight into quota attainment patterns, such as regions where your sales team beats quota or lags behind, is vital to setting, optimizing, and executing on modern revenue goals.

Creating Competitive Compensation Plans

When it comes to sales compensation, incentives should be customized based on territories in order to motivate sellers to effectively pursue opportunities.

Let’s say your main goal is to build top-line revenue growth, but you’re not sure how you’re going to accomplish that. You can use incentives to help you reach your objective by overlaying sales rep performance with revenue goals and aligning that with territory design.

2. Alleviating and Planning for Sales Churn

Losing valuable employees is a concern for every sales organization. The ability of a sales team to reach its targets depends on having the right number of reps closing deals. But planning for sales churn, and preventing it, is impossible without drawing on data. 

By applying historical performance data to current and future plans, organizations can ensure that they’re hiring the right people, for the right role, at the right time. Intelligent territory software allows managers to set and customize hiring profiles across territories to identify the resources they need in order to easily compare the contribution margin on ramped versus in-ramped reps.

Yet, according to Harvard Business Review, over a third of organizations don’t conduct—or rarely conduct—any type of capacity planning. 

Incorrect ramp and attrition assumptions lead to revenue loss. Without effective resource and capacity management, organizations have little to no insight into their hiring needs, what skill sets they should be hiring for, or when they should be hiring. Understanding how long it takes for reps to reach full productivity and the rate at which reps leave the organization provides a more accurate view of resource needs. 

3. Aligning Marketing Initiatives With Territory Design

Sales reps go where the money is. Therefore, by creating accurate territories, marketing is able to follow suit and direct effort and resources to the same markets, opportunities, and prospects. Just as a salesperson directly sells to a company or person, marketing can help tag-team territories by redirecting strategy and budget to bread-winning markets.

If you’re a company selling software in Illinois, you wouldn’t place an equal amount of marketing effort and sales outreach in Chicago as you would for somewhere smaller, such as Peoria. While Peoria may have a market to tap into, time, money, and effort would be lost over-servicing a smaller town in central Illinois versus a major metropolitan city in the same state. 

Analyzing territory performance helps organizations make more well-informed decisions. When sales and marketing operate like a well-oiled machine, these departments can collaborate in order to laser-focus strategy, increase performance, and target territories that drive more revenue.

The Multi-Beneficial Use of Territory Management Software

As business grows, organizations must be willing to adapt to new challenges, address better ways to operate, and prepare for the next stages of growth.

With an automated territory solution like Xactly AlignStar, sales managers have an easier view of the numbers for better territory balancing and alignment based on data-driven insights. When done correctly, territory management gives leadership broader visibility into the plan, which opens the door to new opportunities and possibilities previously held back by manual processes. 

To learn how you can use data to map effective territories that can give your company a leg up in reaching its go-to-market goals download our recent guide: The Expert’s Guide to Data-Driven Territory Management.

  • Territory Design
Emily Jahn
Content Marketing Manager

Emily Jahn is a Content Marketing Manager at Xactly. She earned a degree in advertising from The University of Colorado - Boulder and has experience in copywriting, social media, and digital marketing.