What is sales territory management and alignment?

As businesses have become more data-driven, they've invested more in territory management software to enhance their sales performance. This trend shows that businesses are looking for ways to make sales data easier to digest. They want to be able to manage and align territories, analyze the information and gather insights about market gaps and resources levels. But what exactly is sales territory management and alignment? Firstly, we need to define a sales territory.

What is a sales territory?

A sales territory is a group of customers that's managed by an individual salesperson. Typically, these territories are based on geographic area while also considering other factors, like customer density, historical sales or pipeline value. Companies strive to balance and align sales territories because this can reduce costs and increase sales.

What is sales territory management?

Sales territory management is the ongoing optimization and improvement of your sales territories. Your goal is to use your resources effectively. This helps to maximize your sales productivity. When territories are well managed, you never lose out on sales because your reps are too busy to meet with leads. On the flip side, your salespeople always have enough work to keep them busy.

You need to regularly review your business goals and strategy; the same is true for your sales territories. Many companies set and forget them, but this is a mistake. Over time the market will change, and you'll win and lose clients. Your sales territories have to shift with these changes, or they'll become less effective over time. That's why it's critical for sales territory management to be an ongoing process, not a one-off project.

What is sales territory alignment?

Sales territory alignment is a term for properly distributing your sales opportunities and resources while ensuring your territories match your business goals.

The basic building blocks of territories are usually states, counties, cities, accounts, or ZIP codes. The individual building blocks can be moved between territories to even our opportunity and workload among your salespeople.

If you don't make sales territory management an ongoing process, you can end up with poorly aligned territories that are a headache for sales teams. If a sales rep's territory is too large or their workload too heavy, they can't cover all customers and prospects effectively. On the other hand, a sales rep without enough leads can end up wasting their potential on low-priority clients. Ultimately, that means you're overpaying salaries, and your salespeople are less motivated. Eventually, this leads to high turnover, which is disruptive and expensive.

On the other hand, aligned territories are effective and efficient, allowing you to get the most from your sales team by fairly allocating opportunities. Sales territory management software ensures efficient coverage, improved lead development, and balanced sales rep workloads. When all these pieces come together, you can maximize your company's performance and profits.