Five Elements of an Effective Sales Territory Map

Blog
Mar, 12 2020
7 min read
Balanced, fair sales territories are vital to strong sales plans and performance. Understand the key elements you need to build successful sales territory maps.

If you’re in sales, you’re more than likely familiar with the battle over territories. Reps are competitive by nature, so it’s no surprise that there’s competition over who has the best geographical area and opportunity to close deals. The question is how much are you willing to bet that your sales territory map is balanced and targeting the highest opportunities for your team? 

Sales territory mapping is a critical process in every organization, but often, it’s treated as a tedious, draining planning activity that, honestly, you’re just relieved when it’s finally over. That’s not to say that territory design is neglected and rushed. Rather it’s just a pain in the...well, you get it.

Suffice to say, no one is alone in their territory struggles (and headaches). Luckily, if you’re like most companies, you have data that you use to analyze performance. If you take that information, you can gain insights to simplify and improve your sales territory mapping.

Strengthening Sales Territories with Data Insights

It's important to use the right data to make strategic decisions about territory boundaries. Sales managers cannot trust their gut instincts, or spreadsheets, about what makes a territory both fair and profitable. When you combine your internal data with third-party insights, you can map the ideal territories that are fair, balanced

Using territory design software, you can make this process more simple. In fact, enterprises that implement technology in their sales territory design see up to 30% higher quota attainment than those mapping manually. This, of course, isn’t an overnight fix, so to help you get started today, here are five insights you should analyze to design an effective sales territory map.

Elements of an Effective Sales Territory Map

1. The Right Data Insights

Your customers are your best source of information when it comes to sales territory mapping. Looking at data around deals you’ve closed can help you identify patterns and common factors that ultimately made these deals successful. 

When examining your performance insights, you should aim to answer these initial questions:

  • In what geographical areas do most of our customer base reside?
  • Does industry or other factors impact the areas we successfully sell into?
  • Are there any markets or areas that we’ve previously ignored that could provide additional opportunities?

It's imperative to know who your customers are and where they operate. This can help you get a better visual representation of opportunities spread over a geographic region. But it takes more than just your customer data to build an effective sales territory design. 

You also need to consider third-party data into your planning. Sales territories are often designed by geographical locations with large populations, hot pocket regions based on your industry, or even areas with professional sports teams. Third-party insights allow you to identify spots you may have previously overlooked and expand your map to include more opportunities. 

2. Established Goals and Targets

If you fail to plan, then you plan to fail. When you're creating your sales territory map, it's critical to set clear guidelines and goals that are easy to track and measure. In a recent Sales Management Association (SMA) survey, Xactly uncovered best practices and trends for strategic territory design. If you're having trouble looking for specific targets, it helps to take these items into consideration:

  • How many opportunities do you need to meet your quota?
  • Which geographical regions could use more attention?
  • Which locations do most of your leads come from?
  • How many reps should you assign to each territory?
  • Which products and services do customers purchase the most?
  • Which products and services are the most profitable?
  • 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. You might come up with specific goals such as "We need x amount of customers in this location for this quarter," or "We need five more accounts in this vertical by the end of this year." Management certainly needs to have measurable goals for each territory because all the sales reps will rely on it.

3. A Tangible Strategy

It's important to have a strategy for all your territories. You can do this once you have clear goals for the territories. It's also crucial to have an even and fair distribution of reps in each territory. You want to 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 give them those accounts. 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. You can 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. To illustrate, a strategy would be different for a growth-oriented location than it would be 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.

Your sales territory mapping software 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. Fair, Balanced Opportunities

Keeping your territories balanced can be an ongoing process as markets and demographics tend to evolve. There may be several changing dynamics that affect how your territories respond to your goals and strategies. 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.

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. With compact and travel efficient territories, you can increase productivity – lowering drive 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. On one end of the spectrum, a salesperson's territory can be too large--then, the workload would be too heavy and unbalanced. As a result, the territory would be under-served--leaving money on the table. On the other hand, a territory could be too small leaving the sales rep begging for sales just to reach their goals.

This can lead to low morale,  a highly frustrated sales rep, and increased turnover. 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 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 improved responsiveness to emerging trends, better lead development, a balanced workload for each sales rep, and improved morale. Then, it leads to the optimization of both performance and profits. And, you can then focus on the best practices for sales territory design.

5. Measurable Results

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 underserved 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.

How Sales Territory Mapping Software Helps

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—which, boosts sales and decreases associated costs. The biggest advantage you can give yourself is a solution that helps you create well-designed territories.

With territory mapping software, you can integrate third-party data such as vertical data, population trends, and even the number of hospital beds in a territory with your CRM data. With that type of information, you can then place a focus on which verticals your team has the most success with, how they make purchases, and their location. 

Additionally, a territory design solution allows you to 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 create more balanced and profitable sales territories, which give your reps and equal chance at finding and closing sales opportunities to hit their quotas.

Discover more ways optimizing territory design can help improve your overall performance in our “Complete Sales Planning Handbook.”

  • Sales Planning
  • Territory Design
Author
Karrie Lucero
Karrie Lucero
,
Content Marketing Manager

Karrie Lucero is a Content Marketing Manager at Xactly. She earned marketing and journalism degrees from New Mexico State University and has experience in SEO, social media and inbound marketing.