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How you assign your sales quotas. The territories you give your most productive sales reps. The new segments you decide to introduce.
There are a lot of ways your sales territories define your business. Which means getting them right is key to whether or not you meet your sales targets. All of which makes sales territory planning critical to your business success.
A solid sales territory business plan can help you set the right quotas for your team and align their strengths and weaknesses with the segments they represent. What's more, it can help ensure you're pursuing the right leads as a business and that you're not ignoring potentially lucrative markets along the way.
But getting your territory plan right means accessing the best data and putting it to work. To do that, start with the following:
Sales territory and quota planning enables you to map out your sales territories for maximum impact, ensuring that you're targeting the right prospective customers. Territories are usually based on geography, but can also be separated according to other criteria--from industry to customer type. Your sales representatives will be assigned to a territory based on their experience, strengths and weaknesses, as well as the sales potential of the territory in question.
Once you've planned out your territories and understand their sales potential, you can start to build quotas for your team and create a sales forecast that your entire sales and operations team can plan against.
By thoughtfully planning out your territories, you can set your sales team up for success--and put your organisation on track to reaching its sales goals. A successful sample territory plan does that in several ways:
In other words, a well-executed territory plan lets you position your team for more targeted, smarter selling and puts your organisation on track towards greater gains--now and in the long run. It can also help increase your overall sales by making your team more productive and cost effective as a whole.
But to create an effective sales territory plan, you need to put in the work to get it right.
So how do you go about planning the best sales territories for your business? These five steps can help:
By determining how your existing customers are spread out, you can start to recognize trends and see how you might segment and approach prospective customers as well. Are your customers best segmented by geography or industry? Are there emerging markets or industries you're starting to see new business from? Where are your top or most lucrative customers based? Look at sales data over time to better understand what the sales trends are and what segments have the most growth potential.
Now you want to look at your current sales team and the territories they represent. Which reps have the best track records and highest quotas? Which have the busiest sales pipelines? Which territories are the most profitable or have the most growth potential? By looking at how you're currently doing things, you can start to see where you might make changes--where your top-ranking sales associates will have the biggest impact or where your most ambitious might be able to open up a new segment for growth. A SWOT analysis can help with this--providing a model for identifying the strengths, weaknesses, opportunities and threats that exist in your current territories and team.
After you've examined your existing customers and territories, it's time to look more closely at where your most promising future potential may be and compare the two together. Are you targeting your Total Addressable Market or are potentially profitable segments being ignored? Using your Ideal Customer Profile, analyse the market to identify where you might have been missing opportunities all along. How big are those segments and how can you best add them to your current territories to explore them better? You'll want to balance your territories against the potential of each.
Using a top-down approach, you can start to set your overall sales goals and yearly quotas, determine whether any new territories are needed and start making any necessary adjustments to your existing territories. Analyse your data to determine your most and least profitable territories historically and set your quotas accordingly. Consider the overall sales pipeline and whether it will support your goals. Do you have the marketing leads you need in each territory to justify the quotas you've set out? What strategies will you use to make your goals a reality?
Don't just assume you got it right the first time. There's room for improvement even in the best sales territory plans. By measuring your results, you can continue to optimise your territories to maximise their potential and make any necessary changes to your sales pipeline to set your entire team up for success. You can also keep an eye out for any emerging trends: territories that have diminished or increased in potential, increasing costs or sales representatives that aren't measuring up. Check in on metrics such as gross sales, gross profits, conversion rates and total commissions at regular intervals to keep an eye on your ongoing success.
By following these steps, you can create a strong sales territory plan and quotas that will push your team to maximise their potential--then continue to optimise your plan for continued success. Some additional best practices will help you along.
So what else do you need to know to build an effective territory plan? A few more best practices will keep your sales territory planning on track and your sales team moving toward your business goals:
With the right balance between territories, you can be confident knowing that your sales representatives are spending the bulk of their time on the most high-potential leads and that none of those potentially fruitful leads are being ignored.
While tweaking your territories will help optimise your results, a mostly steady sales territory plan will work in your favour, better enabling your sales team. After all, too much change can make it hard for your sales reps to develop the relationships they need to succeed.
While a lot of companies use geography to divide their sales territories, other segmentation possibilities may work better for you. Don't be afraid to explore other ways to divide territories, such as account type, industry, product or something else entirely.
Your sales representatives may have their own quotas, but you can help them reach those objectives by putting in place smaller goals along the way--the number of emails they should send in a day or the number of follow-up calls they should make to pursue a lead, for instance.
A thoughtful sales territory plan will set your sales team up for success and put your entire organisation on the path to meeting its sales goals. More than that, it can help you identify and explore new territories and find more efficient segmentation options--giving you the power to set even larger objectives.
Build a successful sales plan with the help of Vena's sales performance management tools.