Sales Territory Planning - 4 Key Steps to Drive Sales Growth
Although many in sales now work in hybrid or remote models, according to HubSpot’s 2024 sales trends report in person meetings are still the most effective sales channel.
Consequently business owners and sales leaders still want to see, you, their sales teams out meeting with customers. This means Sales Territory Planning remains as important, if not more so, than ever.
Sales Territory Planning requires smart thinking, especially as face to face meetings are now back as a key tactic but with increased travel costs.
As you continue to understand more about what you have learned and to implement the information, you will grow your sales – trust me. But as stated much earlier, sales is a continuum, so future strategic planning and refinement then turns into
The four key aspects of Sales Territory Planning are:
Sales goal setting
Territory analysis
Customer analysis
Call-cycle planning
Sales Territory Planning is the process of analysing available data to make educated decisions on how to best organise interactions with your customers in your assigned regions to meet your assigned targets. These targets may be set for you by your sales manager or determined collaboratively.
In establishing sales territories, it is important to:
Define sales territories strategically
Maximise coverage while minimising costs
Set SMART objectives (see more below)
As a salesperson, you will be assigned a territory for which you are responsible. Generally, you will be responsible for managing all existing customers in that territory and generating new sales.
The size of your sales territory will depend on the nature of your company, the number of salespeople in your team and the overall region within which you operate. If your company only operates in a metropolitan area and has a sales team of four, it is likely the metropolitan area will be divided into four equal areas in terms of customer base. If your company operates nationally, each member of the sales team may be assigned a geographic region to manage. Sales regions can also be split by account types, industry segments or market potential.
Having been assigned your sales territory, it is your responsibility to then determine how best to manage your customer base within it, taking into account the territory itself, relationship- management requirements and call-cycle plans.
Remember that the sales plan should support the marketing strategy, which in turn should support the overall business goals. There should be total transparency and alignment, so territory planning needs to consider the end goals and long-term plan.
Sales leaders can set their team up for success by:
Defining sales territories strategically
Setting sensible sales quotas (unrealistic quotas can demotivate and be counterproductive)
Ensuring effective processes to improve efficiency
In terms of the four key aspects of sales territory planning, the main considerations for each aspect are as follows.
1. Sales Goal Setting
All planning needs to align to a series of measurable goals. The saying “If you measure it, it will grow” is very true. Again, sales goals need to support the company goals and should be defined SMART Sales Goals (see below). Goals differ to targets in that generally goals are specifically numeric, whereas targets are a little less tangible. For example, a target could be to expand into a specific new market. Some typical goals might be:
To achieve a certain number of new deals per quarter
To increase territory revenue by 15% for the financial year
To increase your conversion rate by 5% for the financial year
To lift your net sales margin by 5%
Set educated, intelligent goals that can be measured. If you are not familiar with the SMART acronym, it means:
S = Specific
M = Measurable
A = Attainable
R = Relevant
T = Time-Bound
With goals set, the next step is putting the actions in place to reach them.
2. Territory Analysis
Helping sales teams hit their sales goals has never been an easy task, but good sales territory planning will:
Make you more productive
Improve customer coverage
Increase sales revenue
Reduce costs incurred through inefficiency
Territory analysis will help you plan effectively. Key understandings to gain in conducting meaningful territory analysis are:
Understanding how each region, industry or segment performs. Used properly, your CRM will tell you all you need to know about conversion rates, opportunity volumes and margin returns.
Understanding what your best performing territory is and why. Similarly, understanding what your poorest performing territory is and why.
Understanding the cost of service, sales revenue and margin return for each territory.
This data enables you to make educated, intelligent decisions about how to optimise
resources, capitalise on the available opportunities in high-performing areas and improve underperforming areas.
3. Customer Analysis
Customer categorisation will enable you to start defining call cycles (next point) and gain some understanding of where to focus your efforts. The objective from this deeper analysis is to understand where you most effectively and efficiently generate sales revenue.
With deeper analysis, you should consider aspects such as the account costs and expenses
needed to maintain customer accounts, including:
Travel to and from the client
Portion of the salesperson’s time spent on the account (percentage of their salary)
Marketing or promotion costs
Customer analysis will identify where you get your bang for buck; where you generate goodsales revenue at good margin in fertile areas. These are the customer accounts to prioritise in your planning. Once you know which accounts should be prioritised, you can optimise sales territories to focus on the most valuable accounts and generate as much profit-per-salesperson as possible. However, this should not come at the expense of a customer-focused, problem-solving mindset.
4. Call-Cycle Planning
If you understand and trust your sales process, you’ll know that if the right activity is done with the right regularity, you will succeed. In short, call-cycle planning is proactive hunting and farming, based on company goals that are determined by agreed priorities.
Call cycle and the type of call or touchpoint will vary by customer, particularly now, given what the last two years has meant in terms of travel restrictions and increased video calling.
Some key considerations for effective customer call-cycle planning:
Determine cadence and touchpoints
Map your territory
Work smart
Be the Mayor
“Be the Mayor” is a great saying I heard recently. It basically means get to the point within your industry and realm where you are recognised as the keeper of knowledge. It doesn’t necessarily mean for just your product or service but for any related industry issues your customers want advice, contacts or information on. They contact you for that information, and you pass on what you come across that you think will benefit others.
It’s your territory – Know it, Own it, Grow it.
If you want to learn how to best utilise anchor appointments for travel planing, I’m here to help. Check out my services or contact me directly for a bespoke programme of sales coaching at hello@iancartwright.co.nz