For many organizations, when it comes to sales territory management, there’s a lot at stake: Effective sales plans with balanced territories and attainable quotas are essential to maximize sales performance and exceed revenue targets.
If you get it wrong, you’ll have disgruntled sales reps who view their new territories and quotas as unfair, unattainable, unbalanced, or worse… you won’t see the issue before it’s too late and you don’t hit your number.
While many organizations have a mature, and often manual process for quota planning, data indicates that a large percentage of organizations believe their territory planning and management processes fall short.
According to the CSO Insights World Class Sales Practices study, only 37% of those surveyed said their sales coverage model effectively aligned resources to customer needs.
As sales reps dive into their goals, organizations need the agility to respond and react to change.
Following are five sales territory management tips to ensure your sales team succeeds.
Key sales territory management tips
- Prepare for change
As new sales territories are released, organizations need to be ready to adjust them, if necessary.
It’s important to analyze attainment on a regular basis and if turnover has created market gaps that will hinder attainment of strategic goals, you need to react quickly. Don’t wait until midyear to find out that critical areas are being underserved or that key accounts are being ignored due to geographic considerations.
Organizations need to be agile enough to make changes quickly, but with the right insights to know how to react, all at scale and in sync with changing business requirements.
Traditional methods of territory management often lack insight and make change difficult. You can improve outcomes by leveraging real-time territory analysis and artificial intelligence to react, modify, balance, and reallocate.
- Go beyond zip code
Organizations often use traditional defaults like zip code or city to create and assign territories. When you consider the variation between zip codes, it’s apparent that zip codes are somewhat arbitrary and the geographic disbursement of businesses that fall within these areas can vary widely.
Relying on classifiers like zip code when grouping addressable customers into accounts can obscure geographic considerations like toll bridge costs, travel distance, and road conditions, which can hinder success.
Intelligent sales tools empower organizations to segment sales territories strategically, using a wealth of connected data to improve outcomes like geographic visualization, historical performance, number of accounts, and sales resource availability.
This insight enables business users to optimize territories and identify hidden growth opportunities as well as identify and avoid potential pitfalls.
- Validate quotas
As each quarter progresses, you should evaluate the effectiveness of the plan’s financial goals, including quota targets.
Sales reps are motivated to close deals to earn commissions, but when quotas aren’t aligned to earning potential and historical performance, they’ll quickly become disillusioned when their goals are unattainable and will look for employment elsewhere.
Conversely, if quotas are too low and easily attainable, sales reps will easily hit goals and the organization will miss out on potential opportunities for growth.
Establishing value, capacity, and target goals can be challenging, but AI-driven analysis helps businesses refine quotas with historical data while using real growth numbers and close rates to estimate attainment to determine realistic and stretch goals. Leveraging data to determine quotas assures that goals are fair, equitable, and attainable.
- Manage changes at scale
Companies spend a lot of time carving out territories and setting quotas, but often the real challenge is dealing with the day-to-day needs of the business, especially when you consider the scale of the modern enterprise.
If sales operations teams are using spreadsheets for sales planning, changes are too time-consuming and labor intensive to execute or analyze.
Spreadsheets can work for small businesses, but they come at a cost of operational efficiency and financial risk. Growth requires more sales reps, advanced sales methodology, and strategic incentive compensation plans, all of which come with greater complexity.
Automation empowers organizations to manage complexity and change at scale while empowering business users to deliver superior outcomes.
- Align with incentive compensation planning
Territory creation is about segmenting your addressable market into bite-sized chunks and then strategically aligning sales resources to maximize revenue and attainment. In isolation, territory configuration and planning can be complex in its own right, but to stay competitive, the modern enterprise needs to remove selling barriers while promoting success.
When organizations align strategic incentives with organizational goals, they can eliminate gaps by connecting incentives with outcomes.
More plainly, quota targets can be set based on expected and historical performance and strategic incentives can work in tandem, promoting the key goals of the organization independent of prior performance. This dual approach validates quota discrepancies between similar roles while providing a common ground that fosters healthy team competition.
Territory planning and management for the modern enterprise is complex. Every company does it, but few do it well.
As market forces converge, organizations that master territory management in conjunction with quota planning and incentive compensation management will gain a distinct competitive advantage.
