Territory optimization reduces costs by eliminating wasted effort in underserved markets. It improves customer service by ensuring reps have enough accounts to serve and growth opportunities.
A well-optimized sales territory plan makes achieving quota goals easier for the team. Use CRM software to create clear parameters and realistic goals for your sales territories.
Establish a Strategic Alignment
The first step in creating a plan to optimize your sales territories is ensuring it aligns with the company’s strategic goals. This should be a collaborative exercise that includes all stakeholders in the sales team, including their managers and leaders. A well-defined strategy will enable you to separate territories effectively, improve the customer experience, and boost overall sales performance.
It’s also essential to ensure that territories are balanced. Over-served habitats often result in lower conversion rates and dissatisfied customers. Conversely, under-served parts can cause reps to take on more than they can manage and overburden them. This can lead to poor morale, high turnover, and decreased productivity.
Using data points like ideal customer profile, industry, location, and purchasing behavior can help you identify the right areas to segment your sales territory. This allows you to align environments with the most lucrative customer segments and provide the most value for your organization.
As market conditions and sales opportunities change, it’s essential to evaluate your territory management process regularly. Depending on the situation, this may require a redistribution of accounts or a realignment of resources. This will keep your territory planning process handy, helping you to adapt quickly to changing market conditions and business needs. It will also ensure that each salesperson has a fair opportunity to reach their quota and achieve success.
Segment Your Territory
When it comes to sales territory optimization, the key is segmentation. Breaking down a territory by market, industry, and customer segments allows reps to target more qualified leads and accounts. These more targeted opportunities will increase the likelihood of success and help your team meet your revenue goals.
Analyzing the cost associated with each territory is another way to help your team identify and address inefficiencies. By comparing prices to the estimated sales potential of each region, your team can create more realistic targets that are within reach for each rep.
A more detailed analysis of the sales potential of each territory will also help your team determine which markets are worth pursuing. For example, the size of an account or its decision-maker’s role might indicate that it will yield higher revenue opportunities. Look at the types of products a customer buys and see if any natural partner products or services can be promoted together to generate more value.
When you use these sales territory optimization strategies to identify the best markets, you must continually monitor and adjust the territories to reflect market changes. Using a sales territory management tool that enables you to analyze and make real-time adjustments will give your teams the flexibility they need to thrive.
Identify Your Ideal Customer
To develop and optimize a sales territory, evaluating which customers are the most valuable to your business is essential. Accounts with higher value are more likely to generate revenue in a shorter time than other accounts. For example, if you sell consumer packaged goods, you should focus on food & beverage and health & beauty markets that generate high profit margins. These accounts also have low churn rates and repeat purchases, essential metrics when reviewing the quality of your territories.
Considering this information, it’s crucial to regularly review and adjust your sales territory management strategy to reflect market conditions. It’s recommended to do this on a regular cadence, such as quarterly, and to use sales performance tools to automate the process.
This will keep your team on the right track by ensuring they’re targeting and cultivating the best-fitting accounts for your products. In addition, these systems can compile and update customer data in real-time so that your sales reps always have the latest and most significant information. This is important, as customers and businesses change often. It’s also essential to understand that different accounts have varying sales cycles and processes. For example, larger versions typically take longer to close deals than smaller, local businesses.
Balance the Workload
Balancing the workload and opportunities across territories is essential when establishing sales territory goals. Parts with high customer density may require more reps to effectively service the market, while regions with low customer density might only need one salesperson to reach their quota goals. Aiming to strike this balance will ensure that no territory is overserved or underserved, allowing your team to develop and grow their strategic customer relationships while also having the time to manage their existing accounts.
Analyzing the quality of your territories is another crucial part of territory optimization. This includes evaluating factors like revenue potential, growth potential, and customer loyalty to determine the value of each region. Considering these factors will allow you to set realistic targets that are both challenging and achievable, motivating your sales representatives to strive for success.
Ultimately, it’s essential to evaluate your sales territories and make adjustments as necessary regularly. This will help ensure that your domains align with broader sales and marketing strategies and that your team members are positioned for success. By assessing your territories periodically, you can be confident that they are providing a good return on investment for your organization.
Aside from assessing your territories, it’s crucial to continually analyze your sales teams’ performance. This is critical in identifying areas of opportunity and improvement, as well as rewarding top performers.
