How to Build an Effective Sales Territory Plan?

In any high-performing go-to-market organisation, distribution of market opportunity determines revenue potential. Even top-tier sales talent will struggle if assigned an unbalanced segment of poor-fit accounts. Conversely, average performers can hit their targets when backed by a balanced market design.

A robust framework is driven by Sales Territory Planning. Data revealed by the renowned Harvard Business Review proves that sales rise by 2%–7% when the territorial design is maximised without increasing manpower. Here we will learn about the meaning of territory plans & the ways to design one effectively.

What is a Sales Territory Plan?

To build an effective strategy, you must first answer the above fundamental question. A sales territory plan is a strategic map that divides Total Addressable Market (TAM) into segments of accounts allocated specifically to individual sellers. Sales territories nowadays go way past simple zip codes. These territories can be defined based on firm sizes, product lineage, verticals, account tiers, and geographical locations.

A territory sales plan focuses mainly on efficient sales coverage with minimum hassles in administration and preventing rep burnout. Each salesman should have equal chances to meet his quota target in the organisation.

Core Advantages of Strategic Territory Management

Arbitrary account allocation causes redundant marketing, conflict within teams, and failure to achieve pipeline objectives. Implementation of a Sales Territory Business Plan yields definite benefits, which are listed below:

Step-by-Step Guide: Designing The Sales Territory Strategy

Territory planning needs data-based segmentation along with sellers' capabilities to ensure optimal sales results. Let's explore step-by-step how to create a territory sales plan​.

1. Set Specific Revenue Targets

Begin by aligning the business objective with the geographical objective. If an enterprise aims to make $20M in additional Annual Recurring Revenue, its territory strategy should support this target accordingly.

• The success or failure of any enterprise depends highly upon its sales cycle and revenue.
• Consider customer retention objectives while also focusing on logo objectives.

2. Create your Ideal Customer Profile (ICP)

A territory fails badly in its sales function when its focus lies solely on the number of accounts, regardless of account quality. By utilising the historical CRM database, it becomes easier to identify characteristics of the most valued customers.

• Intent Signals: Growth indicators or high-growth recruitment patterns.
• Firmographics: Market verticals, Income size, and number of employees.
• Technographics: Digital maturity and technological tools investments.

3. Apply Tiering and Segment Accounts

After defining the targeted audience base, the classification of accounts becomes necessary for representatives' guidance:

• Tier A (Target Accounts): Ideal-fit accounts having considerable sales opportunity. A high-touch approach is required for them.
• Tier B (Average Potential): Suitable, Medium deal value, and Standard outbound outreach.
• Tier C (Low Potential): Large volumes, but small amounts in contracts. Nourished using automation processes or online portals.

4. Evaluate Exact Sales Volume

One of the major mistakes done while sales territory planning is drawing boundaries considering hypothetical personnel numbers. Design should always be based on maximum staffing levels:

Workable Accounts Per Rep = (Available Annual Selling Hours) ÷ (Avg. Time Required per Account)

Sales representatives are the backbone of the sales team and need ample training time to get started. Sales representative app development companies should consider ramp-up timelines for sales reps, previous turnover, administrative costs, etc. When salespeople are overloaded with workloads, their accounts cannot be worked on efficiently, paving the way for competitors to step in.

5. Balance Territory Potential

Equal earning ability must be ensured among the territories allotted. Relying on equal number of accounts will not work out. Having 50 accounts of Tier-A enterprises will give greater revenue generation ability than having 300 Tier-C SMB prospects. Summing up total scoring abilities in terms of potential will help.

Implementation of a Sales Rep Territory Plan

Enterprise strategy execution depends heavily on its grassroots level. After the assignment of territories, every salesperson requires a sales rep territory plan, which should be made available individually to each sales rep.

The operational guide explains everything about how a single salesperson handles his/her territory:

1. Partner Ecosystems: Spot referral network partners or regional integrators to strengthen sales channel management and expand market outreach.
2. Targeted Allocation: Deploy around 60% of the efforts for Tier-A prospects, 30% for Tier-B, and the remaining 10% to Tier-C.
3. CADENCE Standards: Standardise touchpoints for target accounts.
4. Competitive Playbooks: Playbooks are customised uniquely for different local or industry-based competitors.

Selecting The Best Sales Territory Planning Tool

Traditional sales territories using static spreadsheets lead to siloed data, outdated allocation, and biased distributions in the organisation. Revenue operations need a specific sales territory planning tool to facilitate the efficient automation of account distribution.

A diligent sales territory planning tool offers key features:

• Geocoded Lead Mapping: Finding customer density helps optimise routes and scheduling.
• Scenario Modelling: Conduct hypothetical simulations to see how territory alteration affects sales representatives' workload and quota achievements before executing the plan in practice.
• Automated Lead Routing: It involves automatically deploying leads to the relevant representative using dynamic, rule-based criteria, helping teams maintain a smoother sales order process as opportunities move through the pipeline.
• Real-Time Data Sync: Integration of account management software directly with your CRM will keep your historical data intact throughout the account transfer process.

Key Strategies for Up-Keeping Long-Term Territory Health

Market conditions will always change, sales personnel will move on from their designated territories, and consumer segments will change as well. Here are a few guidelines:

• Quarterly Review of Cadence: Avoid waiting until year-end for resetting territories; use sales reporting to review performance quarterly and identify imbalances, industry opportunities, and employee turnover.
• Cross-Functional Coordination: Engage with sales teams, the revenue operations department, finance division, and human resources during design sessions. Finance will confirm if your targets align with increasing revenues for your company. Human Resources checks the fairness of commissions offered.
• Protect Account Continuity: Avoid mid-year transfers within accounts whenever possible. Continuous transfers will impact the quality of interactions between customers and representatives.

How TradeOne CRM Eases Sales Territory Planning?

A sales territory business plan is a systematic approach that connects organisational objectives with sales operations effectively. Once the ideal customer profile is determined, along with equal market opportunities for all, empowering sales representatives with a customer playbook, and adopting proper technology, it results in a balanced and scalable revenue-generating system.

Our dedicated CRM is an all-in-one platform that connects all the field sales representatives, warehouse teams, head office, delivery partners, and customers on a single platform. That’s how TradeOne CRM helps in making the best sales territory planning by considering the situations of all stakeholders.

Get a free consultation now.

Frequently Asked Questions

1. How to segregate sales territory effectively?

Sales territory division requires strategic thinking to cover maximum regions effectively based on organisational structure, industry type, customer needs, account potential, sales cycle duration, etc.

2. When should Sales Territories be reassessed?

Sales territories need to be reviewed at the end of each year, keeping checkups during quarters to evaluate performance according to the objectives. Nevertheless, major changes in markets or organisational teams would require immediate assessment.

3. Why is Sales Rep Territory Plan crucial?

Sales territory planning avoids duplication of accounts, creates balance between the workload of representatives, and decreases administrative hassles in sales operations.

4. How to strike the ideal balance between sales territories?

One should not divide sales territories solely based on the number of accounts available in each territory. The balance between sales territories is achieved via total revenue potential and the quality of accounts through ideal customer profiles and account tiers.

5. How to handle accounts opened by departing sales reps?

Such accounts need to be immediately transferred to other sales reps paying emphasis on priority deals. It is essential to avoid keeping potential leads waiting.