Sales operations teams know territory design is critical for revenue achievement. It directly affects sales team goals and performance. If you get it wrong, it can undermine team morale, impact retention and reduce revenue.
Territory Management and Design is complex, dynamic and tough. This guide will help you design, implement, and refine your Sales Territory Management System.
Data first, your winning formula
Start with your data. Too often territory design is based on "gut feel". Later in your design process, you encourage input from your sales leaders and sales reps. But build your foundation on your sales data.
Why you need a Sales Territory Alignment System
- Boost revenue by up to 12%
- Reps maximise earnings potential
- Uncover hidden sales potential hotspots
- Reduce sales staff turnover, while increasing rep motivation
- Increases decision-making speed
1. Start early
The territory planning process can be complex and lengthy. So start early and schedule times for designing, sharing and accelerating feedback from the team.
2. Future proof your planning
If you are growing quickly or resizing your sales team numbers. It is important to develop different scenarios for growth or reductions in seller numbers.
Adopting workload can ensure your sales territories are manageable and equitable for all sellers.
3. Minimise territory disruption
Territory decisions can have unforeseen effects. Reps can be frustrated if their accounts move, or if they inherit new customers. Customers can respond negatively to a change in their rep. So, when making changes try minimizing these effects and implement changes that remain in place for at least one year.
4. Make data-backed decisions
Sales data can overwhelm you. Focusing on trends is your secret sauce. What insights are you gaining on
- Competitors. Are competitors entering new territories? Are they winning a greater percentage of sales opportunities or deals? Is there more competitive prospecting activity?
- Product sales. Are some products performing better than others in specific geographies? Are there seasonal movements in product sales that indicate a trend?
- Micro hotspots. Are there products or geographic areas with exponential growth? Could they signal potential high-growth opportunities?
- New target industries or customers. Are customers moving into new verticals you should explore? Are there use cases for other industries you have missed?
- Customer growth patterns. Are some customers growing faster than others? If so why and how do you respond?
Overlaying multiple datasets on a map generates insight impossible to gain on spreadsheets.
5. Agree on a regular re-alignment process
For some of you working in dynamic industries with large numbers of sellers, it's essential to redesign and realign territories on a quarterly basis. For others, annual alignments are best. We recommend that every organisation performs an annual territory alignment.
Balanced territories equal happy stakeholders
Equitable sales territories provide reps with equal opportunity to hit sales goals and maximize earnings. Unequal sales territories can result in higher sales team turnover and lower motivation. So, always consider the impact of territory changes on sellers' performance. Never allow the territory to reward the seller.
Diagnose with data
Traditional territory designs suffered from major shortcomings like reps enjoying areas with so much sales potential, they can't cope. While other reps scraped a living in territories with limited sales potential.
Your market is dynamic. So, well-designed sales territories may lose market share gradually due to competition or customer movement. Your resources are not maximizing new growth opportunities.
Using your sales data (from your CRM or ERP) you gain a clearer picture of:
- Customer locations
- Current sales potential hotspots
- Future sales potential hotspots
- Competitive landscape
Balance Sales Territories
Your goal is to maximise sales potential while minimizing the cost of sales. You must ensure you create equitable and balanced sales territories.
If you have reps with too many accounts to service you are losing revenue. If you have sellers with too few accounts to service you lose valuable revenue potential.
Your reps want equal opportunity to grow revenue and maximize their earnings. Unbalanced territories can lead to higher rep turnover.
Success Tip - Measure your sales team workload.
Workload is a recommended formula that delivers. It results in more equitable, balanced territories and lets you see where to adjust headcounts while improving rep earnings potential.
Manual versus Automated Territory Alignments. What's right for you?
You commit to designing balanced and equitable sales territories that are centred on areas of the highest sales potential. Unsure which approach works best? Every organization is different requiring different approaches.
As your guide consider the number of alignments you make annually. If you have a dynamic, changeable territory base (with high levels of territory turnover) you should consider automation.
- Large enterprise? Choose Optimization and automation
- Small business? Choose manual territory design
A final consideration is your requirement for balancing indexes. Some eSpatial clients use sophisticated multi attribute-based alignments. The level of complexity is such that the only real option is optimization software.
3 Reasons to invest in Optimization software
- Slash administration time from weeks to hours
- Use "what-if scenarios" to improve your decision making
- Use balance factors like workload
Usability – Things to consider before investing
Sales Territory Mapping software spans a variety of use cases and applications, but many are designed for technical mapping experts. If you're not an expert in geographical information systems (GIS), choose intuitive mapping software. A product built for Sales Operations leaders, not GIS experts.
All new software involves a learning curve. User adoption is affected by ease of use. You'll need to consider those in sales, service, marketing and operations. How easy is it for them? How quickly can they be trained and onboarded?
You must also consider any legacy systems and how easy it is to integrate mapping workflows into existing processes.
- Can you build territories on points only? Many systems are limited to Zip level only optimization.
- Or better still can you create sales territories at zip code and/or points level?
- Is it a “Complete solution for sales operations? Does it include mapping and routing capabilities?
- Does the software offer upgrade options? (for example to include routing or new users)
- Are real people available to train you and your team?
- Can you easily share maps with your colleagues and team?
- Does the application provide in-app chat?
- Does it offer you the visualization functionality you need?
- Does it include a route planning tool?
- Is the system secure? Is it ISO accredited?
- Is it cloud-based?
- Is it available on mobile devices?
- Can you export maps to jpeg, PDF or Powerpoint?
- Can you store data easily?
- Do you have access to state, county and zipcode data?
SecurityThe cost of any data breach is severe. So, you should consider how your data is stored. Always ask about:
- A supplier's ISO ratings.
- A security statement outlining data management policies Single sign-on (SSO) capabilities.
- Data centers used and access controls.
- Administration controls to manage access rights for all users.
How do you assess sales territory mapping software's return on investment (ROI)? A great starting point is to check customer references and testimonials.
Also, look for a solution that allows you to scale quickly. You won't need to invest everything upfront. By starting with a smaller number of users, you can build your business case and measure investment returns
Think about the types of ROI you need
- Increase revenue
- Decrease in selling costs
- An increase in rep productivity (more sales calls or less administration)
- A reduction in travel time and fuel costs
- A higher level of service to customers
- A decrease in service costs
Overcoming the obstacles of designing and maintaining sales territory alignments, boosts revenue, slashes administration time and leads to greater sales rep effectiveness.
Using a data-driven approach is critical for success. But combining data with key stakeholder feedback and intuition guarantees superior results.
When choosing the right sales territory alignment software for you, consider how dynamic your environment is. And how many sales reps you'll manage. Choose automation when you face high complexity and change. Choose a manual approach if you have a simpler use case.
But always assess your vendor's capabilities. Often the difference between success and failure lies with the quality of their people and training.View our sales territory management guide