Sales Territory Management

A sales territory is the regional, industry, or account type assigned to a specific salesperson or sales team. A sales territory owner is responsible for prospecting into their customer base and meeting their territory quota.

CRM systems, the term territory management designates a process of lead routing and account management based on a prospect or customer location. The typical scenario is this a company has substantial national or international presence and a single point of entry for incoming enquiries (like a website or a toll-free phone number). After identifying a prospect or client location, these inquiries are passed only to responsible employees in local offices.

Territory management in CRM software offers a number of advantages. For example, it allows one to compare sales or marketing statistics between different territories. It can show which territories are showing positive dynamics (sales are growing) and which ones are declining, allowing management to make appropriate decisions before it gets too late. Finally, it can help in building accurate sales forecasts for each territory.

Businesses who cater to a large audience categorize their prospects into territories based on similar characteristics such as geography, business type, business size, referral source, needs, etc. Referred to as territory management, this sales practice is an effective way for sales managers to enable sales reps to focus and prioritize on leads assigned to them. Organizing sales teams by territory also helps to identify profitable territories, sales reps who are meeting targets, and the potential sales areas to improve.

Sales managers divide their sales team into specific groups so they can effectively handle their territories and maximize opportunities; however, the process of assigning territories to sales reps becomes a problematic exercise if you don’t have an automated system in place. A sales management system like CRM software comes with territory management capabilities to define your sales territories.

With a sales CRM like Freshsales, you can create a systematic sales territory management plan to organize your team, auto-assign leads round-robin, assign phone numbers to territories, transfer calls to territories, limit territory access, and more.

Understanding, planning, and managing sales territories can make or break your sales efforts. Your reps need a firm grasp on the specific customer segments they’re accounting for and the general framework of your team’s territories over all.

The way you structure, define, and distribute the territories you work with has massive implications when it comes to your organization’s sales efficiency and bottom line.

A solid sales territory plan and exceptional territory management can be significant assets to a successful sales team. Here’s some perspective on how to do them right.

Sales Territory Planning

1. Define your market.

To effectively set up territories, sales leaders must first understand the environment of their business. There are numerous ways for a business to define a market. Factors could include geography, size, and consumer demographics among others.

Know what is unique to your business and prioritize based on what your climate demands. A solidified market will lead to lowered costs, increased sales, and a foundation for setting up effective sales territories.

2. Assess account quality.

After a target market is determined, sales leaders need to evaluate the value of each account. The measurement could be either quantitative or qualitative depending on the product or service the business offers. For example, a beverage company might rank the value of their accounts by net profitability while a company that relies heavily on customer recommendations could focus on accounts that are more likely to provide a referral for their company.

3. Assess territory quality.

After assessing the quality of each account, it is important to rank territories. As with the accounts’ values, this process is subjective based on different business needs and priorities. If your business sells products across industries, your territories could be divided and quantified by those industries. Determining what sales territory supports which areas of the sales funnel will also help you score territories into high, medium, and low value.

To get a better picture of territory value, include your sales team in these discussions. After all, no one knows the territories better than the reps who work within them each day. That way, you can assign the appropriate reps to maximize the potential of each territory.

4. Assess rep strengths.

The next step towards effective territory management may be the most important of all. After determining the quality of each sales territory, it is crucial that you assign reps with the applicable skills to develop and optimize each set of accounts. For example, a territory that is defined by large enterprise deals needs to be handled by a rep who has experience closing big deals. By strategically assigning qualified reps to accounts, you will empower your reps and ensure the client receives the best possible service.

5. Review and consolidate.

The four steps outlined above prepare a business to put a sales territory plan into action. The last thing a business needs to do is a final diagnosis of costs associated with each territory. Analyzing cost metrics like comparing ideal versus actual number of visits and mileage per rep in each territory will help managers zero in on specific inefficiencies in the system.

After you have reviewed your plan, consolidate it. By following these five steps, your business will be on its way to having a more satisfied workforce, as well as increased customer growth and profits.