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5 Steps To Segmenting Your Sales Accounts With Territory Planning

August 30, 2021 Tanya Goncalves  
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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:

What Is Territory Planning?

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. 

Why Is Territory Planning Important?

By thoughtfully planning out your territories, you can set your sales team up for success—and put your organization on track to reaching its sales goals. A successful sample territory plan does that in several ways:

  • It expertly segments your sales opportunities: While many territory plans are based on geography, some go further to segment based on factors such as industry, company size or market. These kinds of segmentations empower your sales representatives to become experts in their area of interest, with a deeper understanding of a sub-segment of the business, not just a specific location.

  • It aligns your sales representatives with the number of potential leads: Every territory isn’t created equal when it comes to the amount of sales potential it has. But if your territories are planned properly, you can even up the odds—balancing the load to ensure no opportunities are missed.

  • It assigns your best sales reps to your busiest territories: Every sales territory may not be the same, but neither is every sales rep. Some are more experienced and can handle higher sales quotas, while others may be excellent when faced with the challenge of forging a new market from scratch. The better you understand your sales territories and team, the better you’re able to assign the right sales representative to the territory where they can have the biggest impact.

  • It lets you dig deeper into the data to achieve the best results: Territory planning isn’t a one-time thing. By following your performance data, you can get a deeper understanding of how each territory is faring and whether it’s meeting its potential or not. That data can feed into your sales forecasts and future quotas and let you tweak your territories or sales team distribution if need be.  

In other words, a well-executed territory plan lets you position your team for more targeted, smarter selling and puts your organization 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.

5 Steps To Creating an Effective Sales Territory Plan  

So how do you go about planning the best sales territories for your business? These five steps can help:

streamline-icon-customer-relationship-management-team-assignment@220x2201. Analyze the Customers You Already Have

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.

streamline-icon-monitor-team@220x2202. Analyze Your Current Territories and Team

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. 

streamline-icon-graphic-tablet-draw-1@220x2203. Look at Your Potential Market

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, analyze 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.

streamline-icon-business-team-goal@220x2204. Articulate Your Goals and How You’ll Achieve Them

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. Analyze 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? 

streamline-icon-election-result-2@220x2205. Measure Your Results

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 optimize your territories to maximize 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 maximize their potential—then continue to optimize your plan for continued success. Some additional best practices will help you along.  

More Best Practices for Successful Territory Planning

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: 

1. Make Balance Your Objective

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.

2. Don’t Rock the Boat Too Much 

While tweaking your territories will help optimize your results, a mostly steady sales territory plan will work in your favor, 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.

3. Explore New Ideas 

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. 

4. Set Smaller Goals for Bigger Results

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.  

Planning For Success

A thoughtful sales territory plan will set your sales team up for success and put your entire organization 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.

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