Helping sales teams hit their sales goals has never been an easy task: only 65% of field sales reps at large companies hit their sales quotas. The current sales environment has only made it harder than ever for reps to meet, let alone exceed, their quotas.
If your business’ sales goals are not being met, you should not immediately start onboarding more field sales reps to try and solve the problem. One of the first places to start is to take some time to re-evaluate and optimize your sales territory management strategy.
This article is your go-to resource for everything you need to know about sales territory management, allowing your team to be more effective and hit sales quotas more consistently.
What Is Sales Territory Management?
Sales territory management is the comprehensive process of creating sales territories, assigning those territories to your reps, monitoring the performance of the territories, and making adjustments as needed to ensure they are as effective and efficient as possible. One of the goals of a sales territory manager is to consistently enable your reps to get the most return out of a group of territories.
In effective territory management, territories are designed so that reps can generate enough opportunity to hit sales quotas, while also managing existing client relationships within that territory. Sales reps should have enough accounts and prospects to make money but not too many accounts to where they end up neglecting some relationships because they’re stretched so thin.
It is important to also note that the best sales territory management involves a constant cycle of reviewing the territories and making adjustments as needed to help your reps continue to achieve sales goals.
Sure, all of this sounds great, but you may be wondering what exactly goes into an effective sales territory management process?
How to Set Up a Sales Territory
It all starts with the foundation – defining the territories themselves. Defining territories from scratch can be an intimidating prospect. However, with the right mindset, process, and tools, you can divide sales territories so they are effective and well-suited to your customer.
The following are the core steps of setting up a sales territory:
Evaluate Your Market
The right sales territories keep your customers and market in mind. So, evaluating your current market can arm you with valuable information that will help you separate the territories effectively and enable reps to meet sales goals more consistently. This means it will also lead to lowering costs, improving the marketing and sales process, and increasing profit.
You want to look at things like:
- How many customer accounts are there currently?
- How much are these accounts spending?
- Where are these accounts located?
- Are there any clusters of customer locations?
- How many new prospects and accounts are being added?
- Where are these located?
This information will help you define your current market and understand the business environment.
Divide the Territories
Using past sales data and the information you gleaned when evaluating the current market, you will be able to confidently group nearby accounts and prospects into geographic territories of roughly equal value. This value can be either in the number of accounts or account revenue (and potential revenue).
Map the territories out visually to clearly see where they line up and ensure nothing is overlapping. They can, of course, be drawn out on a map, but utilizing territory management software (more on this below) will help you do this more accurately and in far less time.
Assign Reps to Each Territory
Once you have your territories mapped out you can assign reps to each one. Just like when you looked earlier at where the accounts and prospects are geographically located, in this step, you want to consider where your reps are located.
In field sales, geographical location is going to be one of, if not THE, top driver of how reps and territories are paired. So, assign territories to reps that are located in or near each one to maximize efficiency. Assigning a rep to a territory that is far from their location is not going to be effective.
Also, if there are differences in territory value, consider giving the higher value territories to your more skilled and productive reps. This will serve as an incentive for their hard work and a motivator for reps in other territories.
How to Evaluate Your Sales Territories
Companies, customers, and sales environments are in constant change. Once you have established your sales territory, it’s crucial to continue to evaluate it to make sure it meets your needs.
Establishing effective sales territory alignment and management requires good, hard data. Some best practices for managing your sales territories are to fully understand:
- How your accounts compare in terms of services provided, lifecycle stage, revenue, costs, and profit. Evaluate each account to measure its value (especially in relation to your end goals.)
- Which territory has the most successful sales funnel (leads, opportunities, new accounts, conversion rates, etc.)
- How each sales rep performs in terms of their numbers and their intangible qualities.
Taking the time to periodically evaluate your territories will ensure that everything continues to stay in alignment, your sales reps are in a prime position to continue to be effective in their sales efforts, and customer needs are still being met. This also allows you to pinpoint any deficiencies in particular territories and make adjustments as needed to ensure continued success.
When evaluating your existing territories, you should be looking at both the accounts within the territories and the performance of the territories themselves:
Your accounts will continue to change and shift after your initial assessment. Continue to evaluate them to make sure they align with your territories and sales/productivity goals. Once you have your territories set, it will be easier to assess them to find inefficiencies in the system or excess costs.
Every account is different, but some are more similar to each other than others.
Accounts may share similar types of products or services. They may share similarities with the amount of revenue they generate for the company. They may have similar costs.
This last point should not be ignored.
Account costs are the expenses needed to maintain the account, including:
- Travel to and from the client
- Portion of the rep’s time spent on the account (percentage of their salary)
- Marketing or promotion costs
Once you understand each of your account’s revenues and costs, you can calculate their net profit. This will help you prioritize accounts and optimize sales territories to drive as much profit as possible per sales rep.
After you figure out which accounts should be prioritized, you can optimize sales territories to focus on the most valuable accounts first and generate as much profit-per-rep as possible.
Individual Sales Territory Assessment
While account assessments are focused on how accounts within a territory compare to each other, territory assessments allow sales organizations to understand territories in terms of their sales funnel performance.
When assessing a current territory, you should evaluate your sales funnel to answer:
- How many leads are being generated?
- How many leads turn into opportunities?
- How many opportunities convert to new customers?
The conversion rate is one very valuable way to assess the performance of sales territories. It is calculated by dividing the new customer accounts by the original number of leads.
For example, say you’ve expanded into four territories and want to evaluate your sales funnel performance. Your numbers may look like this:
Here are some noteworthy insights:
- Even though the West territory has the third-highest conversion rate, it had the highest number of leads and the highest number of new customer accounts. So, overall, this is the best-performing territory.
- The South territory yields the highest conversion rate and second-highest number of new accounts, therefore it does have an effective sales funnel.
- The East territory has the lowest conversion rate (by quite a large margin) and therefore has the weakest sales funnel.
In the above example, using the insights found, the sales manager should analyze exactly why the East territory may be underperforming. It may help to move resources around to increase conversion in certain areas and generate even more accounts. Keep in mind that conversion rates can often also be directly impacted by having strong or weak sales reps within a specific territory.
Critical Elements of Effective Sales Territory Management
At the end of the day, the way you shape and allocate resources to your sales territories has a massive effect on your bottom line.
Effective sales territory management means well-balanced territories. And well-balanced territories will allow you to get the most out of all of your reps, while also giving you a better understanding of who your top performers are. The more equal the opportunity is between territories, the more level the playing field for your reps — this provides major benefits.
For example, if a territory is over-served, there are too few opportunities per rep—your team won’t have enough to do. This leads to money and time down the drain, and also means other territories will likely end up under-served.
If a territory is under-served, there are too many opportunities per rep. If your reps take on more accounts than they can effectively service, it leads to lower value accounts and dissatisfied clients.
With well-balanced territories, your reps will be motivated to take full advantage of the opportunities in their territory without competing against their own team or overwhelming themselves.
Other critical elements of effective sales territory management include:
- Consistently using sales data to gain insights into territory performance.
- Ensuring your reps are keeping the ideal customer profile in mind,
- Proactively making adjustments as needed based on performance, capacity, and resources.
- Maintaining ambitious but realistic sales goals for your territories.
- Communicating any territory changes to reps right away.
- Automating territory mapping and management.
Tracking and Managing Sales Territory Performance with Software
Knowing the right strategies for sales territory management is an excellent start, but to leverage all of your opportunities and ensure continued effective sales territory management, you and your team need the right tools. In times past, sales territory planning and management went something like this:
- Set up a map
- Outline areas
- Sit with salespeople to get their feedback
- Give them an area and hope for the best
Thankfully, it no longer has to be a shot in the dark. Data has changed sales and territories from a vague art form to a more precise science. Territory mapping and management technology utilizes this data and makes it easier than ever to achieve well-balanced and high-performing territories. These tools also enable you to effectively analyze this data moving forward and optimize your territory management.
With the right tools, your team can gain insights and make calculated moves to better serve customers and make the most of their sales efforts.
Sales territory management software can actually be broken down into two different types – territory mapping software and territory optimization software:
Visualize Your Data With Sales Territory Mapping Software
Sales territory mapping isn’t just seeing where your territories are on a map — it’s the ability to visualize how territories are performing and map territories using a combination of area, sales, and customer data. While the data from CRMs can provide valuable data, it can be challenging to interpret on a spreadsheet.
Territory mapping software can provide valuable visualization to make management easier and more accurate. It is easier to see if your territories are balanced or not, and how well each one is performing. It also clearly lays out territories to avoid overlaps between reps. Without a map to clearly see their areas, it is easy for a rep to encroach on another’s territory without realizing it. Accurate territory mapping can help avoid confusion and potential negative team dynamics.
With territory mapping software, you can easily populate your sales data on a map and adjust the territories to suit your team’s needs. You can create sales territory maps in seconds using zip codes, demographics, and your business data — visualizing your accounts has never been easier.
Here are a few examples of sales territory mapping software to choose from:
Map My Customers
An all-in-one, mobile-first sales software purpose-built for field sales teams, Map My Customers helps make your team’s territory mapping efforts better than ever before. The robust interface enables sales teams to view accounts on a map, find new prospects, create optimized routes within those territories, track their sales activities and other crucial data, and plan and automate each day.
You don’t need to be a master analyst to effectively map sales territories and make more well-informed decisions. Map My Customers makes analyzing rep and territory performance easy, always ensuring your reps have the best opportunity to succeed.
Within the app, you can visualize not only the territories themselves but also key sales data for each of the territories. For example, the revenue heat map helps you and your team easily pinpoint the highest-performing areas. Then your team can more effectively capitalize on opportunities and leadership will know where attention may need to be shifted. There are a variety of other advanced reporting features available as well that help teams understand and improve sales performance within their territories.
Map My Customers’ robust dashboard also enables sales leaders to effectively coach the team from afar through powerful team management functionalities. Management will have a birds-eye-view of all of the sales activities that are happening, all visualized on a map. Then you’ll know exactly what is driving sales, what is working, and what may need to be tweaked.
Our platform combines a territory mapping software, data visualization tool, sales automation app, sales rep tracking software, and sales rep route planning software all into one comprehensive solution.
Personal = $60/month per user, Team = $105/month per user.
An interactive demo is available.
- The interface can be fully accessed from any device, even on the go.
- Provides a powerful territory mapping & management solution that can stand alone as your team’s main sales CRM or integrated with Salesforce, Hubspot, Zoho, or Microsoft Dynamics.
- Provides the ability to quickly and easily create optimized sales routes through powerful routing capabilities, enabling reps to save even more time.
- The built-in comprehensive dashboard helps teams to not only improve sales territory management, but also cadence management, pipeline management, and overall team management.
- Since this sales rep app was built specifically with field sales in mind, inside sales teams may not get as much value from Map My Customers’ features.
See a Hands-On Product Tour of Map My Customers
For sales teams who are using Salesforce CRM and looking for Salesforce territory management, Salesforce Maps is a native add-on that makes for another good option in territory mapping software. Within the software, you can quickly and easily map territories for your team and visualize your Salesforce sales data on a map-based interface, enabling sales leadership to make location-driven decisions that increase productivity.
The territories can be split up by a variety of different CRM data points including geographic location, customer revenue, new or existing customer, product needs, or sales type.
Salesforce Maps also enables your team to zero in on the most valuable prospects and customers. This is done by creating an optimized 7-day sales schedule with visits prioritized based on Pardot® Score, Einstein® Score, or potential revenue.
Basic = $75/month per user, Advanced = $125/month per user.
A free trial is available.
- Salesforce Maps is good for businesses that have a lot of prospects in their area or operate across state lines.
- Teams can view many different aspects of your sales CRM data on a map-based interface, including prospects, customers, and sales revenue.
- The software has a robust dashboard that displays the number of opportunities generated, the number of check-ins for the week, average time on site, and more all in one place.
- The platform’s capabilities are limited once reps are out in the field. Not all functions can be accessed from a mobile device.
- It does not have as many capabilities as some other mapping and territory management tools. For example, it does not include a deals tracking capability to allow you to view sales pipeline activity.
- There is a higher learning curve in the beginning for this tool and it can take a while to initially set up and configure for your team’s needs.
Optimize Your Territories With Smart Models
Territory mapping software may be able to visualize and assign territories, but how can you be sure it’s the right strategy? Territory optimization software cuts out the guesswork — it takes mapping software one step further and builds smart models that set your reps up for consistent success.
This software creates and compares fully optimized territory models for you. Modeling with just a single data point is risky and unpredictable. Territory optimization software takes all of your data and sales goals into account and builds a more comprehensive model. This means your territory management strategy will be based on zip code, opportunity, open deal value, previous revenue, and more key indicators of territory performance.
By layering and weighing every business consideration, you can guarantee an even distribution of opportunities for your reps, build a more predictable business model, and increase the efficiency of your team to drive deal movement. But just because it’s comprehensive doesn’t mean it’s difficult to use — all you have to do is populate your data and the software does the rest of the work for you.
Some examples of sales territory optimization software include:
We Map Sales
A geo business intelligence solution for all types of businesses, We Map Sales offers advanced sales territory optimization capabilities for sales teams. In this robust platform, sales teams have access to automated territory design, map-based analytics, and intelligent territory optimization.
With We Map Sales, you can easily allocate resources to specific areas and enable reps to focus their efforts on the best opportunities. The software makes it easy to create optimized territories that will eliminate guesswork and inefficiencies, maximize potential revenue, exceed sales goals, and increase productivity. Territories can be generated based on multiple different variables within the selected geography and easily changed as needed to proactively manage sales efforts.
The dashboard brings together all of the important sales data you and your team need, all updated in real-time. This includes deal status, activities, risk indicators, etc, with the ability to drill down into the details quickly and easily. The dashboard automatically updates with your team’s CRM data.
Advanced = $25/month per user, Premium = Contact for pricing
A 30-day free trial is available.
- The software syncs in real-time with your team’s CRM data.
- Sales leaders can quickly generate multiple different “what if” scenarios for comparison and data-driven sales planning.
- New optimized territories can be created and added with very minimal disruption to existing territory assignments.
- This software currently only integrates with the Pipedrive CRM.
- Since it is an advanced geo-spatial software, it can have somewhat of a learning curve for less tech-savvy reps.
- We Map Sales does not have routing capabilities like some of the other field sales software options covered above.
For Salesforce users, Geopointe offers a good mobile-friendly option when it comes to territory optimization tools. The platform location enables your team’s CRM data, applying geography to sales efforts and streamlining territory efficiencies. With Geopointe’s robust visual editor, you can optimize your territory mapping by utilizing actionable geographic insights and creating clear and efficient territories for your sales reps. Reps can then be easily assigned to the territories, even across multiple teams, through Geopointe’s Automated Assignments feature.
Geopointe also helps your reps automate many of their daily sales activities, including multi-stop route planning. Reps can create optimized sales routes for that day or pre-plan routes several weeks or months in advance (available as an additional add-on to the annual plan).
From the sales manager perspective, Geopointe provides a bird’s eye view of your territory and sales data allowing you to identify sales trends and patterns using filtering and visualization capabilities.
Annual Plan = $55/month per user, Enterprise = Contact For Pricing (includes optional add-on features).
A free trial is available.
- The platform makes it easy to visualize your CRM data in terms of your team’s geographic territories.
- Sales management can utilize easy-to-use tools to create, adjust, and share the territories with their reps.
- Geopointe lacks the advanced data filtering functions that some of the other mapping tools offer.
- It is not a stand-alone solution and must be integrated with your Salesforce CRM to get all of the capabilities from the software.
- This software does have somewhat of a steep learning curve compared to other options in this list.
You Can Revamp Your Sales Territory Management Today!
We’ve covered a lot of ground. From properly setting up new territories to re-evaluating your current territory setup and making adjustments. Plus, as you can see, utilizing powerful technology can help make your territory mapping and management efforts much more efficient and effective.
Review this guide with your management team and determine what changes can be made today to optimize your territory management strategy, better utilize resources, and consistently surpass your team’s sales goals.
Elevate your sales territory management efforts today!
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