An efficient sales territory plan will make your team more productive, increase overall sales, improve customer coverage, and reduce costs. By contrast, unbalanced territory plans and continual changes in territory division will hurt productivity as well as the working relationships between clients and account managers. This is why it’s crucial that you work on your territory management strategy.
Read on to learn how to create a sales territory plan.
Definition of a Sales Territory Plan
The purpose of a sales territory plan is to target the right customers and implement goals for revenue and consistent sales growth over time. Normally, sales territories are created by geographical location. Recently, however, sales territories have been expanded to include customer types, various industries, and other segments. Furthermore, sales territory plans are often developed using sales mapping software.
Steps to Creating a Sales Territory Plan
1. Divide your Customers into Segments
It’s essential to divide your customers into segments based on their various characteristics, such as their industry, purchase history, location, and anything else related to your business. Then ask yourself, “who are my top customers, prospects, and leads?” Then categorize your customers into three groups.
The first group should consist of your best customers or the ones who you can convert with minimal effort.
The second group should consist of customers that require a little more work but in whom you have confidence that the potential revenue gain justifies the extra work.
The third group is then made up of customers who require a lot of work.
Now that these groups are formed, you can figure out how best to use your resources.
2. Do a SWOT Analysis
The next step is to evaluate your sales team’s internal strengths and weaknesses and external opportunities and threats, with what is called a SWOT analysis.
A SWOT analysis identifies internal and external factors that can affect your organization’s performance. Knowing your team’s strengths, weaknesses, opportunities, and threats will allow you to develop a more robust sales territory plan.
3. Create Goals and Targets
A successful sales territory plan requires that you set clear parameters and realistic goals for your teams and individual sales reps’ territories. To do this, ask yourself some questions:
- How many new opportunities do you need to meet your quota?
- Where are the most significant number of leads coming from? What geographical areas do you need to focus on?
- Which of your products or services are the most profitable? Who is buying them?
- Which opportunities do you want to focus on?
4. Devise Strategies to Accomplish your Goals
Now that you have your customer segments and objectives in place, you need to develop some success strategies. Using the information you’ve collected, come up with an even distribution of specific geographic regions or markets for each individual sales rep. The SWOT analysis will give you a better idea of which team members will be successful in which territories based on their strengths and weaknesses. And the customer segments you created will tell you how to contact specific accounts.
5. Review and Track Your Results
Lastly, you need to review and track your territory division results so you can optimize as necessary. This is crucial to measuring your progress and understanding how your plan is affecting sales. Some things to look for as you track your results are:
- Did sales increase or decrease in a specific region or market?
- Can you see any disparities between sales in different territories?
- How much does it cost to maintain each territory?
- Are any of your sales reps struggling to keep up with their leads?
- How many of your sales reps are meeting their quotas?
- Do you have any underserved markets?
Summary
Creating a successful sales territory plan requires careful data analysis. You need to consider what customers are easiest to sell to and which are hardest. You also have to take into account the strengths and weaknesses of your sales reps. You then need to create goals for your sales territory plan.
To achieve these goals, you need to devise a strategy that considers your different customer categories and the abilities of your team. This will allow you to ensure that every sales rep is set up for success when you divide up a region into sales territories.