Times of significant market changes and economic downturns are tough for any business. It can put a strain on almost every aspect of a company. Sales is one of those aspects. But, successful companies know how to pivot and readjust when needed to remain successful.
In many situations, your company’s sales force is the most expensive investment in human resources. So, in harder business times, it’s not uncommon for companies to reduce the number of sales reps to become more cost-efficient and maximize profitability.
But, this, in turn, affects the number of sales reps you have per territory. Causing territories to get bigger for the existing reps, with more ground to cover and more customers and prospects to manage. This is where the need for readjusting your sales territories comes into play. But you may be wondering when is the right time to adjust sales territories? Or how to divide sales territories properly when readjusting?
In this article, we’ll take a look at when it may be necessary, the benefits of doing so, and sales territory management best practices when you are readjusting your territories.
Knowing When It Is Necessary To Readjust Your Sales Territory Plan
Knowing when to make adjustments to your sales territories can be tough and unpredictable. Especially since these adjustments are usually triggered by change. But, during economic downturns and significant changes to your market, as well as internal business changes, not taking a look at your current sales territories and how they may need to be adjusted can become a problem fast. More than likely you’ll quickly be faced with lower sales productivity and territory imbalance.
That is why strategic sales territory realignment as soon as factors change such as the number of sales reps, prospects, etc will keep you ahead of running into any significant problems. In the case of having to downsize the number of sales reps, you don’t want to run into a situation where the remaining sales reps can’t effectively cover the gap left in the territory without being stretched too thin.
In most cases, it is better to do it sooner than later as long as it is done strategically. The goal is to position your sales team and your company as quickly as possible to remain efficient and productive and cost-effective.
Aside from downsizing your sales team, there are other times you should be aware of where redesigning your sales territory plan would make sense. These include:
- A change in products or services offered - One territory might have a much higher demand for the new product causing a need for coverage by more sales reps.
- Expansion of sales team - Just like when downsizing the number of sales reps, as you bring more sales reps back onto your team your sales territory plan should be reevaluated. More reps mean more coverage.
No matter the current situation, over time, the structure and balance of your sales territories naturally decline. Making sales territory analysis and management a regular part of your routine will help you remain proactive and ensure your sales territory plan is always as effective and profitable as possible. Even when sales are going well, keep a periodic check on the performance of each territory and your sales reps within the territories.
Benefits Of Sales Territory Realignment
There are significant benefits to realigning sales territories when it is needed. Overall, strategically readjusting your sales team’s territories helps to streamline processes and sets your reps up for optimum efficiency and productivity in any situation. Not realigning territories when needed can mean valuable time, energy, and resources wasted by not having enough sales reps working a territory or having too many in a territory.
Specifically, readjusting your sales territory plan can:
- Increase revenue by redistributing sales effort more equally and strategically. Allowing time and resources to zero in on customers and prospects with the highest engagement and greatest revenue potential.
- Increase profits by using a reduced sales force (costing less money) to target the areas and customers with the greatest potential.
- Organize the workload evenly across sales territories. Resulting in equal coverage of existing customers and prospects and maximum sales efficiency.
- Boost client satisfaction through more responsive and consistent client coverage.
- Reduce client fatigue. With more organization of the territories, reps can remain focused on effective sales processes, resulting in the elimination of outreach redundancies.
- Balance revenue potential across territories. This will also help to keep morale high by allowing for even rewards and incentives to all sales reps.
- Reduce your sales reps’ travel time and expenses by implementing an efficient outbound sales strategy that appropriately matches the size of the territory.
Readjusting Properly: Sales Territory Management Best Practices
When you are taking the time to readjust and looking at how to divide sales territories, to enable your sales teams to be successful it is more than just looking at sales volume across territories. Some sales territory management best practices should be followed to help you strategically readjust territories properly:
Reassess Your Capacity and Resources
Your current number of sales reps and the available resources might not be the same as when you last created your sales territory plan. Especially in a situation where you have had to downsize your current sales force. So, when readjusting your territories to move forward, it is especially important to realistically look at how many reps you have available to cover areas as well as what resources you have to help them reach their sales goals.
Based on your capacity and resources, some territories may need to be reduced and/or shifted geographically to allow your reps to focus on the areas with the highest opportunities.
Utilize Data Insights
Gathering and utilizing certain sales data and third-party data is an essential step in strategically realigning sales territories. This will help you best align sales reps to territories. You want to look at metrics such as:
- Number of accounts per rep currently
- Lead distribution
- Geographical location of customers and prospects
- Current revenue per territory
- Revenue potential
- Location of sales reps
- Market data on industry changes, prospects’ current technology usages/needs, etc.
Diving into this data and using data visualization will help you pinpoint instances of unbalanced territories currently and what course corrections may need to be made.
Keep Your Ideal Customer Profile In Mind
As you probably know, to have the most sales success, your sales reps should know what type of customers are best to approach. So, when you are readjusting your sales territories it is important to keep your ideal customer profiles in mind. Some geographic areas may now have a greater (or lesser) concentration of target prospects, which should impact how you divide sales territories.
Taking into account your customer profiles will help you pinpoint upsell and cross-sell opportunities within existing customers that should be focused on. Oftentimes, especially during economic downturns, these opportunities are the easiest and most profitable to capitalize on with a reduced sales force.
Set New Goals and Benchmarks For Your New Territories
Looking at the problems you want to solve and the opportunities that may now be present can help guide your territory restructuring and enable you to set new goals and benchmarks. These new goals and benchmarks will then allow you to assess the success of your new territory structure moving forward.
For territory restructuring to be successful, you have to be able to determine sooner than later if the changes are helping to meet business goals and objectives. Make analyzing your sales territory plan something you do regularly moving forward. This allows for a deeper insight into territory performance and the ability to be proactive in making changes before problems derail sales performance.
Automate Your Territory Mapping
Utilizing a robust territory mapping software can not only speed up the process of readjusting your sales territory plan but also make it more successful through the use of data-driven insights. Automated mapping tools allow you to:
- Perform sales territory analysis on existing territories to pinpoint ways to improve
- Look at potential territory maps as you are redrawing your territories
- Compare different territory models
- Share the new sales territory plan with your sales reps and make sure everyone stays on the same page
Territory mapping software provides an optimized sales territory map based on all the available information to help your company remain competitive and profitable. It will also help you make your territories balanced and fair for your sales reps. Motivating them to stay productive and perform to their best.
It’s also important to utilize other automated tools, like your CRM and industry/market tools, to pull in internal and third-party data. This will help ensure that each territory provides equal opportunities for your reps to hit their numbers.
Effectively Communicate The New Territory Changes
Your work to readjust your sales territories strategically will become lost if you don’t ensure that everyone is on the same page with the new changes. It is critical to make sure that the new territories, what has changed, any new sales goals, and any new roles are clearly communicated to the entire sales team. It’s also important to be transparent and communicate why the territories were restructured and the steps you took to do so.
Effective communication and transparency will help maintain trust from your sales force and prevent confusion and eliminate any surprises, both of which can cause decreases in cooperation and productivity from your reps.
Realign Your Sales Territory Plan For Success
As you scale your sales team (down or up) or your company faces market changes, readjusting your sales territories is necessary to remain profitable and continue growth. Territory readjustment helps ensure that no matter what capacity and resources you currently have available, your sales team will be as efficient and productive as possible and align with your sales goals.
By following the best practices outlined above, utilizing automation tools, and communicating with your team you can save time in your readjustment efforts and ensure everyone is on the same page. Resulting in your sales team remaining competitive, effective, and profitable under any circumstances.