By adopting advanced territory planning software, Xactly’s sales operations team shortened the time spent designing territories from a month to a week – shaving hundreds of hours off the process. Moreover, with advanced, purpose-built software, we were able to integrate data intelligence to maximize sales coverage and fairly distribute potential. (Read case study here.)
Given our first-hand experience, we weren’t surprised, then, to learn that organizations using technology in territory design outperform the slow adopters by 20 percent in sales objective achievement.
That was just one of the findings from the recent Sales Management Association (SMA) research update “Optimizing Sales Territory Design.” (View infographic here.) The survey, which polled over 100 sales organizations, found a distinct correlation between territory design effectiveness and overall sales performance.
Data Has Become Essential for Effective Territory Design
Further, building effective sales territories now mandates data insights. Gone are the days of breaking up sales territories based on state lines. Top performing organizations are turning to data to measure the sales opportunity that exists for customers and prospects across territories. With this insight, enterprise companies can design more balanced territories and avoid missed opportunities.
According to the survey findings, firms that were effective at measuring sales potential in existing and prospective customers outperformed the laggards by up to 12% in achieving their sales objectives.
Manual Processes Can’t Apply Logic
To measure sales potential requires data. However, it’s nearly impossible to capture that data intelligence from manual processes that are not designed for logic. Yet 83 percent of respondents still use spreadsheets to some degree for their territory planning.
Given those facts, it’s perhaps not shocking that only 36 percent of organizations say that they’re effective at territory design. The remaining 64 percent should take note. Organizations that were effective at territory design outperformed the laggards in sales goal attainment by nearly 30 percent!
The main goals identified for territory design were pretty straightforward and to be expected, including:
- Covering existing customers
- Covering potential customers
- Balancing salesperson workload
- Designing travel efficient territories
However, if you don’t have easy access to data, how can you achieve these goals? If you don’t understand the sales opportunity for prospective or existing customers, how do you assign territories?
Without that information, territories can be assigned that are too large for a single rep to handle – meaning that you’re leaving potential business on the table. On the other hand, if you assign a territory that doesn’t have enough opportunities for a single rep, you don’t maximize their sales productivity.
Avoid the Slippery Sales Performance Slope with Territory Optimization
As the lynchpin for the sales performance management (SPM) value chain, effective territory design is crucial. Without the right territory distribution, you can’t appropriately allocate quotas. If quotas are unachievable, reps can’t hit their numbers. If reps don’t hit their numbers, they can’t earn the anticipated amount of compensation – impacting their satisfaction and, possibly, retention.
Without optimized territory design, your organization’s sales performance becomes a slippery slope.
Which is why many enterprises are turning to purpose-built territory planning software. In addition to significantly shortening the territory planning process, these solutions make it easier to ensure territories are effectively distributed across your team.
To learn how other companies are applying modernized territory planning software and gaining business value, download our "Guide to Fair and Productive Sales Territories.”