Seven Things to Know About Sales Territory Planning
Sales territory planning can feel like a risky business – there are many factors to consider, a vast amount of data to comprehend, and a team of dedicated sales reps to contend with. Distributing these segments of varying value can seem daunting, but with some knowhow and a little bit of preparation, you can make every territory assignment feel like Christmas for your reps.
Sales Territory Planning Best Practices & Considerations
1) How to Target Your Market Place
First things first: whom are you selling to? What type of customers do you approach? To answer these questions, you must figure out if you can sell your product in any industry, or if you are a niche product that can only be sold to Tech companies, or exclusively in Healthcare. Once you’ve figured out your target demographic, you can use a database like Hoovers to make your new customer profiles useful. Look at areas where there are clusters of the company types you are trying to sell to. GIS systems like ERSI allow you to punch in and start looking for places that are segmented into business verticals. That way you can find all the existing companies you will try to target.
2) Size Matters
*Ahem* the size and structure of your Sales team, that is. Many growing companies under-staff Sales, believing that additional reps would take away deals from existing staff. However, if you haven’t properly researched your target marketplace, you might be left with reps scrambling to connect with an abundance of prospects. This may sound like a good problem to have, but if Sales doesn’t have enough bandwidth to return phone calls and set meetings with companies in the pipeline, you’re doing your company a disservice.
Download our executive guide “Optimizing Sales Territory Design: Sales Management Association 2018 Research Update” to discover the benefits of using data and automation to optimize your sales territory planning.
3) How to Handle Pushback
The question isn’t if you’ll get pushback from reps on the sales territories you assign them; it’s how you’ll handle the pushback that you get. MY advice for managers getting pushback like “we haven’t gotten anything there yet, hope you can cut me some slack…etc., etc,” is that reps will either push back on the territory or the quota. If they don’t like a territory and think it has little opportunity, then they will ask for a small quota.
As a manager, what can you do? Be informed. When you hand a rep a sales territory, you should already know what the top ten companies in that territory are. You should already be in your CRM and be ready to talk about the business potential in their territory that you see.
4) To Travel or Not to Travel
If you have a lot of deals spread across the country and want a rep on the ground with each one that’s another major factor in how spread out territories can be. It takes time and a sizeable chunk of change to send sales reps to meet prospects in person. If you’re convinced that you can make your business work with 100 percent inside sales, then territory distance isn’t a factor. However, it’s important to keep in mind that even in a business that is predominantly inside sales you will come across potential customers that want to meet face to face at the end of the sales cycle. People still like to meet their rep; it provides trust, and the human factor still matters.
5) Carving Up a City?
If you’re dealing with a large city, it’s likely going to take more than one rep to cover it. Take a city like New York for example. It’s too big for any one rep to own. That’s why companies break down territories by street name, customer size in revenue, or customer size by total employees. ZS and Associates has a territories module that is integrated with Xactly Incent Enterprise to allow companies to look at a territory with a map overlay, and integrate with Incent to ensure they have the right rep in the correct territory.
6) When to Rotate Territories
Usually, territory assignment is only changed once a year, unless there is sales force turnover. When you see a lot of rep turnover at the end of the year or after payout, you might be looking at reps that are very unsatisfied with the value of their territory.
7) Quotas to Match
Adjust for territory. While reps often malign fly-over states, they often have more business than expected. However, no matter how much business potential you might find in Indiana, it’s never going to compare to the potential in London or Manhattan. Make sure the territory and numbers for reps are aligned.
Ready for the next step? Read on about how to manage a sales territory.
Optimizing Sales Territories for Competitive Advantage
To learn more about how you can gain a strategic advantage through sales territory optimization, download our executive guide and discover how companies can maximize their return on sales resources...