Guide to Territory Management: 12 Proven Tips for Sales Teams

Liam Costello by Liam Costello on November 20, 2020  |  12 minute read

Territory management is critical to your sales strategy if you manage a field-based sales or service team. How you create, optimize, align and assign sales territories can significantly impact sales performance. And like many things in sales, territory management is not a one-off task. Sales territory management is an ongoing process in a dynamic, fast-changing business environment.

What is territory management in sales?

Established entrepreneurs can attest that successful sales management calls for a lot. Besides building a strong sales pipeline, you must capture and nurture qualified leads, convert them into actual sales, and build stronger customer relationships. You can use a few effective sales strategies to pull that off. Arguably, one of the most popular and effective ones is territory management.

But what is territory management? This process requires you to divide sales territories among sales representatives or marketing teams to maximize sales potential.

Ultimately, you can allocate sales resources optimally among sales team members. That allows each sales rep to solely focus on the target customers within their territory boundaries, boosting their chances of reaching more people and bringing more revenue.

Before you start managing sales territories, keep in mind you may experience some challenges, which include:

  • Uneven sales performance
  • Limited resources for allocation
  • Complex territories that are hard to manage
  • Territory gaps and overlaps
  • Low sales team productivity
  • Increased competition

With a clear territory management definition and knowledge about what the process entails, it’s time to look into its key components.

The pillars of territory management

Here are the most important aspects of territory sales management:

Sales territory design

Sales territory design is the process of strategically dividing a larger market into smaller territories to make it more manageable. To create these areas of focus, sales leaders must first conduct a thorough analysis of the overall market. While performing their research, they should examine demographic data, customer profiles, purchasing behaviors, competitive landscape, and market potential. Understanding these dynamics enables them to collect valuable data to make informed enterprise territory management decisions.

Sales territory planning

Sales territory planning involves developing a comprehensive action plan for effectively managing sales territories to achieve specific sales objectives and targets. During this stage, sales representatives must establish and understand clear territory boundaries, ensuring everyone knows the geographic location that is their area of focus.

Sales territory optimization

In sales territory optimization, sales leaders maximize the efficiency and effectiveness of sales territories to achieve the best possible outcomes in terms of potential revenue generation, customer satisfaction, and sales team productivity. With the right territory management software, they can analyze and adjust territories to ensure they are balanced, well-aligned with organizational goals, and capable of leveraging available resources to achieve their full potential.

Why does territory management matter?

These are some of the benefits of territory management:

1. Boost your sales

Territory management encourages collaboration and teamwork among sales representatives operating within the same territory. By sharing information, best practices, and insights, teams work together to overcome sales challenges and increase territory management sales.

2. Strengthen customer relationships

Territory management allows salespeople to develop deeper, more personalized relationships with customers within their assigned areas by assigning sales territories to representatives. They can understand unique customer preferences, needs, and challenges and then offer customized solutions.

3. Maximize productivity and efficiency

Territory management best practices boost efficiency in various ways. For example, it allows salespeople to focus on defined territories and invest their time in lucrative sales activities and high-potential opportunities.

Again, territory management minimizes travel time and costs by organizing territories efficiently. Representatives can plan their routes more effectively, reducing the time spent on the road and increasing the hours invested in sales activities.

4. Keep your sales reps happy

Assigning territories is the way to go if you want to boost employee morale. Territory management, meaning the process of defining and optimizing sales regions as we’ve seen, gives employees a sense of clarity and purpose.

Then, assigning specific territories to sales reps gives them the freedom to develop their own strategies and make decisions they believe will lead to success. Upon attaining it, they can even be recognized and rewarded for exceptional territory performance.

12 powerful territory management tips

Below we share 12 actionable territory management tips for sales and sales operations leaders. All are proven and actionable.

Combining clean data with a simple and powerful mapping software tool:

  • Saves time and reduces sales admin
  • Creates optimized territories with realistic quotas
  • Drives new revenue growth
  • Reduces the cost of sales
  • Improves sales productivity and utilization

Let's dive in.

1. Develop a territory management plan

First, you'll need a sales territory management plan.

Here is our guide to creating your plan and here is a summary:

Step 1: Analyze your market

The first step to creating a sales territory plan is collecting and analyzing market data. Include an assessment of buying trends, past sales targets and performance, competitor activity, and other relevant data points.

Step 2: Segment your customers

So, you've analyzed your business operations, sales performance, and market context. The next step is to segment your customers into groups.

Step 3: Conduct a SWOT analysis

Once you've organized your customers and prospects into groups, the next step is to assess internal and external factors that affect your business performance.

Step 4: Create your sales territory plan

The final step in the sales territory planning process is to combine your data, market research, and business goals into a single package.

Sales managers should create clear parameters for their sales teams. That includes realistic goals, information on who to target, and more. It will help you develop more balanced sales territories upfront and allow you to pivot down the line.

Some critical questions you should ask include:

  • Where are your highest-value accounts located?
  • How will you organize sales territories to capitalize on your sales team's strengths?
  • Which regions may need more sales support?
  • Where are the primary sources of new leads, and why?
  • What quotas do you have for sales reps?
  • What resources do your sales teams need to grow?

Check out our conquering territory management guide

2. Get buy-in from all stakeholders

Territory management is data led. You take clean data and territory management software and use them to drive your decisions.

Hard numbers trump gut feel and result in better but not perfect outcomes.

You need support from your reps and your sales leadership. Their additional feedback and local knowledge are crucial for fine-tuning territory designs and ironing out the risk of disruption.

Better territory planning means change, which impacts your sales team, who may resist. You may move customers from one territory to another. Regions can get bigger or smaller, affecting quotas.

To minimize disruption and boost engagement, communicate clearly and often. Share your alignments on maps and get real-time feedback on workloads, quotas, and boundary changes.

Starting early improves your chances of getting support — or at least less resistance — both inside and outside your sales team.

3. Clean your data

Sales territory planning will only work with good data. So, clear out corrupted, outdated or duplicate data. Develop transparent processes for capturing and presenting data. Conduct regular audits to ensure your data is clean and your decisions improve.

Even the best territory management software is only as good as the data you feed it.

4. Determine your priorities

When implementing your sales territory management process, remember that it must align with business priorities.

What will you prioritize?

  • Sales productivity and utilization
  • New account prospecting
  • Workload balance
  • Revenue growth
  • Cost reductions
  • Resource allocation
  • Customer service and relationship continuity
  • Product profitability
  • Balanced quotas

5. Balance your sales territories

Balancing territories allows you to ensure that your team members' effort to hit quota matches the workload required to service all customers.

That means enough opportunities to hit their sales target. But not so many prospects that there is not enough time to service each. By matching sales potential with workload, your sales reps hit quota more often, which means retention improves. Customers are happy, too, as their service needs are met.

6. Align territories with your resources

Balancing territories may require you to reallocate resources. That could mean redrawing a rep's territory. Or even moving them to a new region.

The goal here is to boost sales efficiency. Poorly aligned territories mean waste: wasted effort, lost revenue, fruitless miles and wasted time. By aligning your territories with your resources, you can drive more revenue while reducing the cost of sales.

7. Set more achievable quotas

Do your sales territories reward your reps? How? If you have a representative managing an area abundant in sales potential, hitting quota is easy. There is so much opportunity you can't fail.

The flip side is true too. A rep whose territory punishes their hard work because no matter how hard they try, there is not enough opportunity or sales potential to hit quota.

Use your territory management process to balance opportunities across territories. Or to adjust quotas based on the actual sales potential of each region.

8. Delight your customers

Good territory management should make it easier for reps to give each customer the attention they need. By balancing workloads across your sales team, your customers get better service, driving more upsells, renewals and repeat business.

9. Save the environment

A big challenge for field sales teams is cutting "windshield time" so you travel less and spend more time with customers. Less windshield time means more meetings.

It also reduces wear and tear on company vehicles and cuts your environmental footprint. You can design your sales territories for less travel with good data and the right tools. Fantastic for you and the planet, not to mention your Finance department.

10. Retain and nurture your staff

A Gallup survey found that 76% of US workers reported experiencing burnout. The report also noted that unfair treatment and unmanageable workloads were the leading causes.

Territory management can help you spread the work and the opportunities more fairly. Reps should no longer be overworked or faced with unachievable targets. With some organizations experiencing a 20% turnover in sales staff annually, it is a fail-safe way of improving retention and boosting morale.

11. Review your territories regularly

Nothing lasts forever, and territory management is no exception. Your market is too dynamic for a static approach to territory design. It is a continuous process of improvement.

Internal reorganizations and promotions can also impact your territory alignment. You have to update alignments based on changing internal and external factors. As a minimum, we suggest annually.

12. Expand your business

Once you've mastered territory optimization for your existing operations, it's time to think about future growth. It may involve adding resources and carving out new territories in high-potential markets.

After seeing what territory mapping can do to enhance the status quo, you'll feel excited about the possibilities ahead. Take these tips and apply them to new opportunities.

Sign up for a free 14-day trial, and experience the possibilities for yourself.

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Liam Costello Written by

Liam Costello

Liam is an eSpatial account manager and mapping expert. He specializes in helping businesses solve problems and increase sales through mapping visualization, territory management, route optimization and more. Liam holds a Master's Degree in Geographical Information Systems (GIS) and Remote Sensing.

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