Sales Territory Management Best Practices for 2021
One of the sales strategies organizations of all sizes implement to drive more revenue is sales territory management.
Sales territory management involves using data to segment your customers into ‘territories’. Enabling you to leverage your resources to optimize your sales methodologies and processes within each territory and sell more.
Sounds simple enough, doesn’t it?
It’s actually not that difficult.
However, it’s only possible - if you want to execute it well - by using the right software.
Sales used to be an all-or-nothing game. Make a sale, get a commission.
There was no way to progress you towards that win and increase your chances of winning. Because of that, most reps didn't hit their quota.
20% of reps driving 80% of the revenue on average has become a norm.
With new data available and this shift to digital and machine learning, that is changing.
It turns out the best reps do the basics right at the right moment during the sales cycle. Splitting your customer base into territories is the perfect way to further help facilitate that.
Before you read sales territory management best practices, it’s important to understand that AI expands your ability to win more and win fast by realigning sales around small wins that lead to the big win.
You can download our Signal-Based Selling eBook to learn how to focus sales on the signals and techniques that close deals.
Take a read through the following sales territory management best practices and you’ll see for yourself how powerful leveraging sales intelligence software is for driving more revenue:
What Is Sales Territory Management?
In simple terms; sales territory management is the process of creating ‘territories’ and managing those territories as independent sales entities.
To create and manage sales territories effectively, however, there are quite a few components that go into the process - as we’ll be explaining in this article.
The first thing we have to point out is that territory is not purely geographic. It’s natural to assume they are, as obviously the word “territory” refers to a piece of physical land.
However, in sales terms, a territory can essentially be any metric based on customer behaviors that you’re able to define and track accordingly.
Some of the most common sales territories are built around:
- Sales/market potential
- Different industries
- Certain products or groups of products
- Types of customers
- Accounts type
- Number of customers
As you can see, all of these metrics help group any number of customers together that have something in common.
This makes it easier to assign the best-suited sales rep or reps to any given territory. As well as making it possible to measure how well they’re performing in a more controlled manner.
Why Sales Territory Management Is Important?
Let’s jump straight to what really matters, studies have proven that good sales territory management can increase overall sales, reduce operating costs, and increase morale and productivity within a sales team.
The aim of sales is to drive as much revenue as possible, while ideally keeping costs as low as possible, so this should pique your interest.
The reason why sales territory management is effective at driving more sales is that it enables reps to get a better understanding of their customers.
Understanding customer behaviors is a huge revenue driver. When you’re able to better understand the needs of your customers, you can better tailor your sales strategies to them.
It’s that simple.
By segmenting customers with common ground into territories and analyzing their collective behaviors, it enables reps to better tailor their sales strategies to a greater number of customers at the same time.
This is what makes SetSail the most effective sales territory management software on the market.
SetSail tracks more data points than other sales tracking software and is the only software to use a combination of AI and behavioral science to turn that data into actionable insights.
This enables your sales reps to uncover more customer behaviors, on a much more detailed level, and the insights SetSail uncovers provides the actions reps need to drive more revenue.
Sales Territory Management Best Practices for 2021
Now you understand the importance of sales territory management, you need to start by mastering the best practices:
Clearly Define Your Territories
This may sound obvious, but the starting point is to clearly define your territories. This takes some careful planning, and it’s not always easy to decide on how to best segment an audience.
But it’s also something you want to get right the first time as it’s difficult and time-consuming to change.
If you’re already using sales tracking software, you can start by looking at the data you have on your current and prospective customers.
Look for ways to group customers that have common interests and behaviors. Things like geographic location, the products or services you’re selling, specific problems you’re solving, how long it takes for customers to buy, and so on.
Assign the Right Reps to a Territory
Assigning the right reps to a territory is equally as important as defining the right territories. The goal is to align the particular skill sets of your reps to the needs and challenges of your customers in a territory.
You can use the sales data collected by SetSail to help with this. SetSail tracks rep performance and activity down to a much deeper level than just looking at the number of sales they’re making.
You can get insights into a rep’s strengths and weaknesses, where they’re spending their time, the activities that are converting sales for them, the types of customers they best interact with, and much, much more.
If there is a metric that’s unique and important to your business, there will be a way to track and monitor it using SetSail.
It’s these types of insights that enable you to assign reps to territories where they’re going to perform best. While also pulling them away from customers that they aren’t converting, giving you a win-win situation.
Set Territory Goals
Setting goals and targets is something that’s expected in sales as it lays the foundation for action. Setting the right goals, however, is both an art and a science.
We can solve the science part for you. You can leverage the data SetSail collects on your reps, team, processes, and customers to develop realistic goals based on real-time granular data.
To give you a starting point, some of the most common sales territory goals sales managers set are:
- Increasing monthly or annual revenue
- Reducing customer churn
- Selling a certain number of a particular product
- Generating new leads
- Reducing sales cycle times
- Reducing customer acquisition costs
Analyze, Monitor, and Improve Performance (Set KPIs)
As we touched on earlier, the reason why you should set sales territories in place is to make better use of the resources you have available and drive more revenue.
So, you have to analyze and measure how successful your territories are to know what the impact has been. Especially if you can use a KPI that demonstrates the difference between now and your previous sales process.
The only way - or at least the most effective way - to know how effective your sales territory performances are is to set and measure some Key Performance Indicators (KPIs).
KPIs are measurable values or metrics that companies use to evaluate how successful reps or processes are at reaching targets.
For example, some of the common KPIs used to measure sales territory success are:
- Monthly sales growth
- Sales targets
- Average conversion time
- Number of sales opportunities
- Retention and churn rates
- Pipeline value
Using the data SetSail collects, cleanses, and enriches, you can keep a close eye on KPIs that matter to you in real-time.
In addition to this, one of the key features of SetSail is its performance leaderboard. Everyone can see an overview of top sellers and how everyone is progressing towards their targets on a global leaderboard.
There are some interactive elements, too. Reps can communicate with each other via the leaderboard (a bit of friendly banter or encouragement, anyone?), and sales managers can set monetary rewards for top sellers.
The bottom line is that with SetSail, you have the data available to measure and analyze any metrics that are tied to improving performance within your sales cycle.
In this article, we covered some of the most important sales territory management best practices for 2021.
You will have noticed that all of these best practices are only made possible by using the right software.
Data is everything in sales. Not just any data, but reliable, accurate data in real-time that enables sales managers to make impactful decisions.
This is where SetSail comes in.
SetSail is the market-leading sales intelligence software. It collects more data points than any other software solution and is the first Signal-Based Selling sales management software to use a combination of AI and behavioral science.
It’s a true end-to-end solution that helps you gain data-driven insights into how your sales team is performing individually, collectively, by territory, or however you choose to dissect the data.
It also provides solutions and ways you can improve productivity and performance. Ready to optimize your sales processes and drive more revenue? Tour the product →