Sales territory optimization can boost sales. One may think that it’s not too significant, but here’s the fun part - it offers such results without any change in the sales strategy or total resources.
In simple words, it just requires astute workforce management to deliver better results while maintaining business scalability - and that’s just the tangible component of the advantages!
Sales territory mapping can also streamline resources, improve customer service, balance workloads, introduce fairness, and maximize productivity - all of which will attract multi-fold benefits.
Read on to know more about sales territory - from what it is to how to create and assign it.
What is a sales territory?
A sales territory is a sub-division of the target market based on parameters like:
- Geographic region.
- Account type.
- Industry.
- Sales channel.
- Revenue potential, etc.
It marks a well-defined segment of existing and potential customers that are assigned to a salesperson or a team to match their skill sets and capabilities.
The benefit?
Such a classification-led sales territory assignment allows the sales team to deploy appropriate strategies and register success in every sales territory.
Types of sales territories
As mentioned, sales territories are well-defined target market segments.
As such, it comprises boundaries that depend on various factors, such as geographic location, demographic details, product-linked territory, and more.
Along these lines, here are some examples of sales territories:
1. Geographic sales territories
Geographic sales territories are by far the most common (and oldest) sales territories to ever exist.
In fact, most on-field salespeople have used geographic sales territories for centuries!
It involves the classification of the target market based on its geographical location with the continent, country, state, or zip codes defining the territories.
However, today geographic sales territories are not the first choice considering the bias that comes with it. A product might work well in some states and not in others. This brings in inequality as some sales reps will have it easy. Some companies, to avoid this, rotate sales reps among their states.
2. Product sales territories
Product-based sales territories feature in organizations that have multi-line product or service offerings.
Categorizing the teams/reps on the basis of the product allows them to gain a certain amount of expertise on what they’re selling and do it more convincingly.
Team A: Responsible for kitchen appliances.
Team B: Deals in mobile phones, smart wearables, and accessories.
Team C: Looks after the sale of personal computers and laptops.
Team D: Handles television and set-top boxes.
3. Customer sales territories
Customer sales territories are divided based on customer characteristics, such as demographic, psychographic, and behavioral details, to compartmentalize existing and potential customers.
It may also include account-based management (ABM), where you focus on selling to customers or prospects who would be more beneficial to your organization.
4. Industry sales territories
As the name indicates, industry sales territories depend on the industry vertical of the company.
Such an approach obviously works best if your business caters to individuals or businesses from different industrial backgrounds.
5. Sales channel territories
Sales channel territories correspond to the different sales channels that a business may employ to generate revenue. These territories could be as broad as online/digital and offline/physical or as granular as the specific sales channels like Instagram, YouTube, WhatsApp, etc.
6. Hybrid
Many sales organizations use a mix of territory types, even
blending one or more together to achieve optimal sales coverage.
Steps to map a sales territory
Now that you understand the different types of sales territories, the next obvious question would be, where does one start?
Here is a step-by-step guide to mapping sales territory:
1. Bring all sales reps on board
Who would have a better understanding of sales territories than the salespeople themselves?
So, get them involved as early as possible as you commence the journey of charting sales territories.
2. Define sales territory mapping goals
As with any sales strategy, the first step is to understand the primary motivator behind the move.
Start by establishing clear goals and objectives that you wish to achieve through sales territory mapping. It would be best if you could capture these goals in the SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) format.
Think something along the lines of customer sales territory mapping to increase market share by 10% amongst Gen Z in the next 10 months.
Such an unequivocal and concrete definition will also help identify the apt sales territory marketing technique.
3. Identify your best buyers
Your existing customer base is a treasure trove of information on what your target audience should ideally look like.
You can start by identifying your “best customers” and analyzing the common and underlying demographic or firmographic data. Use this information to create an ideal customer profile (ICP) that promises long-term customer lifetime value (CLTV).
This ICP would serve as a frame of reference for your salespeople so that they can focus on the leads or customers that matter.
Additionally, you can create multiple ICPs and assign them to different teams to further streamline sales efficacy.
4. Create and document territories
The combination of the sales territory mapping goals and the ICP may have shed some light on how you can divide your sales territory.
Now it’s time to put all the theoretical knowledge to practice to use and create territories!
Use the examples shared previously to define your sales territory based on the geographic location, industry, product, revenue potential, or anything else of value that applies to your sales organization.
You can also capture all minute details about these sales territories so that there are no overlaps or ambiguities – allowing your sales team to function with laser-sharp focus.
5. Assign sales territories
By this point, you have put in all the elbow grease that goes into defining sales territories.
You can now assign them to the sales reps or teams!
To do this, perform a SWOT analysis of the sales team or salespersons to visualize their individual strengths and weaknesses. Match these with the specific requirements of each sales territory to find out if they will be a good fit for the market segment.
You can also use the FALCON principle 👇
In doing so, you will empower your sales team by allowing them to play to their strengths while also enriching the customer experience.
Might I say, a win-win for all!
6. Rinse and repeat
While defining and assigning sales territory is the primary goal, the ultimate objective is to improve sales efficiency.
So skip the set-it-and-forget-it approach and conduct periodic reviews.
How?
You can monitor the sales and account data regularly to evaluate your sales team's performance in their respective territory. Also, shuffle things up or even consider hiring opportunities to find reps that fit the territory.
4 Tips for creating an effective territory plan
Here are some useful tips to help enhance the efficiency of your territory planning process:
Assign a sales leader
A sales leader is responsible for team management, territory development, and stakeholder alignment – ensuring that the territory plan delivers desired results.
Moreover, they’ll help establish cohesiveness between the efforts of different salespersons to ensure the achievement of company goals.
Manage sales activities
The success of your territory planning exercise will depend on how efficiently you can schedule the sales activities.
That’s why salespersons should undertake informed cadence management based on the specifics of different territories. Moreover, as cadences can vary across territories, it can take you some time to get it right.
But the success here depends on the way you get in touch with the prospects.
Track crucial data and customer requirements
It’s essential to remember that territories will continue to evolve. And this is why your territory planning strategies should adapt to evolving circumstances.
To do so:
- Ask salespersons to maintain comprehensive client meeting notes.
- Train your reps to maintain updated records on the CRM.
As a result, you will be on top of every trend in every territory, make changes when required, and keep tabs on your clients.
Pursue new leads
Your growth can stagnate if the salespersons restrict to existing customers only.
To avoid this, they should always look for new opportunities within the assigned territory. But remember to give equal attention to your existing customers and maintain healthy relationships.
Top tools for territory planning you should check out
Here are some of the essential sales territory planning tools that you can use:
1. CRM
A Customer Relationship Management (CRM) platform can help you track customer details and data from multiple sources, including emails and social media. You can use the data for analysis and customer retention efforts.
CRM tools: HubSpot CRM, Zoho CRM, and NetSuite.
2. Territory mapping
A territory mapper offers insights to help create balanced workloads. It also helps easily distribute territories through seamless organization and visualization.
Territory mapping tools: Maptive, GeoMetrx, and eSpatial
3. Customer mapping
Customer mapping software collects crucial data from the CRM and helps you visualize crucial data points on the sales territory map. You can use it to determine opportunities in the sales pipeline, filter results, and much more.
Customer mapping tools: Lucidchart, OmniGraffle, and Clarabridge
4. Route planning
Route planning tools show the best route to reach a customer's place – helping your reps save tons of time. Additionally, it can help reduce time in traveling, tracking mileage reports, and other functions.
Route planning software: Badger Maps, Spotio, and RepMove
5. Rep tracking
Use rep tracking software to monitor the activities of salespersons when they are out of the office. Features like GPS tracking, visit verification, and activity tracking promotes accountability and transparency.
Rep tracking apps: Unolo
6. Sales tracking
Sales tracking tools help with pipeline metrics, performance reports, territory analysis, and visibility into activities. This allows you to track, manage, and assess the performance of sales processes under one roof.
Sales tracking software: Salesforce, Dragon Anywhere, and PipeDrive
Key takeaways
You can divide your territory based on categories like geography, product type, customer characteristics, the industry you’re in, sales channel, and more.
This helps your sales team to deploy appropriate strategies and register success. Moreover, effective sales territory planning can result in an increase in sales objective achievement.
Go through the steps mentioned above to start sales territory mapping today!
