5 Benefits of Territory Mapping Software
Your sales territories are geographical areas managed by a sales rep or sales team. A territory can be defined by several factors, but most commonly, territories are mapped based on sales potential, sales history, geography, or a combination of factors. The objective is to make sure sales territories are balanced to help increase revenues.
As a result, sales territory design is a critical process for your sales performance management (SPM). Territories should get even coverage by each assigned sales rep without any overlapping or the need to add additional reps to a territory–unless the demographics change. Without the use of sales mapping software, a territory may not be as well thought-out as it should be.
It’s important to use the right data to make the well-informed decisions about territory boundaries. Sales managers cannot trust their gut instincts, or spreadsheets, about what makes a territory both fair and profitable. In order to maximize sales in each area, you must use intelligent, insightful, and data-driven tools such as sales mapping software.
Download our executive guide, "Optimizing Sales Territories for Strategic Advantage," to see how optimized territory planning can help companies maximize return on sales resources, shorten the planning process, and reduce travel inefficiencies.
1. The Right Data for Customer Segmentation
To develop an effective sales territory map, it is crucial to take inventory of your current set of clients, leads, and prospects. The next step is to divide your customers by purchase history, location, spend, vertical, demographics, or another critical sales characteristic.
With sales mapping software, you can integrate third-party data to determine which verticals your team has the most potential with, how prospects in each are make purchases, and their location.
Consider your sales cycle and the average time it takes for different customers to go from prospect to customers. Do these customers require a lot of nurturing or do they often buy online with minimal interaction? Or are they the types of customers who require a lengthy presentation to convert? You should segment your top customers and look for common characteristics.
It’s imperative to know who your customers and prospects are and where they live. You can get this data from the integration of your CRM data with sales mapping software with a visual representation of opportunities within a given geographic region.
Additionally, territory mapping software lets you customize how you visualize and display this data, for example, highlighting more strategic accounts with different or larger symbols.
With these insights, you can spot trends within your market to design balanced, profitable sales territories, which give your reps equal sales opportunities to hit their quotas.
2. Established Goals and Targets
If you fail to plan effectively, then you plan to fail. When creating your sales territory map, it’s critical to set clear guidelines and goals. These goals should be easy to track and measure. If you’re having trouble looking for specific targets, ask yourself the following questions:
- How many opportunities does the average rep need to meet quota?
- Which geographical regions could use more attention?
- Do most of your sales leads tend to come from one or a few areas?
- Based on opportunity, how many reps should you assign to each territory?
- Which products and services do customers purchase the most in each area?
- Which products and services are the most profitable in each area?
- Which customer segment brings in the most revenue?
By answering the questions above, you can get a clearer picture of your necessary objectives for each territory. Fore example, you might also set more specific goals, such as needing x amount of customers in a specific location for this quarter or gaining x more accounts in certain verticals by the end of this year.
3. A Tangible Strategy
It’s important to have a strategy for each territory once you have clear goals for your overall mapping strategy. It’s also crucial to have even an even and fair distribution of reps in each territory. You want to ensure there are enough reps in each territory to cover all of the sales potential, and you should also match the skill sets of your reps with the types of territories you assign.
On the other hand, you might have reps with established relationships in a particular territory. If so, it makes sense to keep those accounts with their reps. Your sales mapping software will help tremendously with creating your territories. To ensure you have an effective strategy, it’s important to think about what you need. Start by answering these questions:
- What resources does your team need to reach their goals?
- What do your reps need to succeed in their territories?
- How can you increase conversions in each territory?
- Are there any opportunities in under-served territories?
Nonetheless, the strategy for each territory can vary. To manage different strategies, managers should create customized plans tailored to the unique demographics of each location. For example, a strategy for a growth-oriented location would differ from that for a more established location.
Moreover, there is a difference between “growing” and “maintaining” a territory. Each requires a different strategy. It takes more time and resources to grow business in a new or under-served territory. To maintain a territory, you may also have the ability to maintain your current strategy and spending level.
Look for sales territory mapping software that comes with features, such as displaying demographic data on a dynamic map with hot and cold opportunities listed. Plus, you can refresh data in real-time to better respond to changing consumer demands. As a result, you get more insight into areas of opportunity.
4. Balanced, Fair Territories
Keeping your territories balanced can be an ongoing process as markets and demographics evolve. There may be several changing dynamics that affect how your territories respond to your goals and strategies. Using mapping software will help you adjust territories quickly and ensure they remain balanced.
If territories aren’t balanced, then your sales reps can’t take advantage of the potential business opportunities within the defined geographical area. Also, if territory distribution isn’t equitable, reps may become dissatisfied, leading to attrition, which ends up costing the business. In fact, on average replacing a sales rep costs a company $115k.
With sales mapping software, you can integrate third party data intelligence. Combined with geographic data, this allows you to distribute territories in a logical fashion, based on sales potential as well as location or other factors. Compact and travel efficient territories allow you to increase productivity, lowering travel time and giving your reps more time in the day to sell.
The right balance includes enough coverage, a fair amount of potential profits per rep, and a sales history equal to the industry standard. When a sales rep’s territory is too large, the workload can be too heavy and unbalanced.
As a result, the territory would be under-served, leaving money and sales opportunities on the table. A territory that is too small may not offer enough opportunities for reps to hit their quotas.
Unbalanced territories can lead to low morale, highly frustrated sales reps, and increased attrition. Yet, when the territories are balanced, every sales rep has an equal opportunity to meet their goals and contribute to the overall profitability of the company. By using sales mapping software, you can create balanced territories and ensure the right coverage.
Advanced sales mapping software provides you with a scorecard that offers instant analysis around territory balance along with recommendations to optimize coverage and travel efficiencies. If one rep has a higher percentage of opportunities over another rep’s territory, you can see that and re-balance your territories as needed.
This also leads to an improved responsiveness to emerging trends, better lead development, a balanced workload for each sales rep, and improved morale. Ultimately, balanced territories lead to the optimization of both performance and profits, freeing up time to focus on the best practices for sales territory design.
5. Measurable Results and Useful Analytics
Now that you have your sales territory map, goals, and strategies, it’s important to track your progress. Your goal is to see how your new territories affect sales. Have sales increased in any of your new territories? Are there any significant disparities between the territories? Are any of your sales reps struggling to keep up with leads, while others aren’t even making half their quota? Are there any under-served markets?
As you can see, it is vital to take the time to evaluate all your sales territories. You need to see how business is doing on a consistent basis. If one location isn’t performing as intended, use your sales territory mapping software to create a new one and/or change your tactics. But, you won’t know whether you need to take action unless you track your progress.
Plus, sales reps and opportunities can change. Sales mapping software offers the intelligence needed to update and re-align your territories as needed.
Using Xactly AlignStar, a best-in-class territory planning solution, companies have reduced the time spent on territory design by as much as 75 percent. By moving away from time-consuming manual processes, such as spreadsheets, companies save hundreds of hours in time designing territories.
AlignStar automatically aligns territories according to travel efficiencies. With a user-friendly interface, organizations can balance sales potential for equitable distribution across territories.
Moving Toward Optimized Territories
There is a lot that goes into an effective sales territory map. When you increase the travel efficiencies and overall balance of your territories, you also increase the productivity of your sales reps. In turn, this boosts sales, decreases associated costs. And sets the foundation of a successful sales plan.