RevenueBase Blog

Mandy Walker January 19, 2024

Profitable Sales Territory Planning

The secret to a successful sales territory plan is making sure that your sales team targets the right prospects. You will often hear us talk about segmentation as a central part of sales strategy, but territory planning allows you to take it one step further along the path to sales success. The territories that you choose have the potential to define your business and your success, which means that it is vital that you get it right.

What is Territory Planning?

Successful sales territory planning takes segmentation to the next level. Segmentation allows you to divide your target market into specific niches to provide tailored marketing and sales activities for specific customer groups based on their shared characteristics. Your sales territory plan focuses on the process of optimizing sales efficiency by breaking down large groups into smaller, defined territories and assigning specific representatives to them. The result? Specialized sales teams who know what the decision makers in their territory want and need, and who can target and approach prospects and leads with optimal success. 

What an effective sales territory plan looks like will depend on your organization, but typically, sales territory plans are based on geos, company size, or industry. With strong sales territory management and more advanced data manipulation, such as the datasets available from RevenueBase, it is possible to gain greater impact from your territories by combining multiple characteristics, for example Geo, Company Size, Industry & Customer Lifecycle.

Benefits of Sales Territory Planning: 4 reasons why even small businesses need to create a sales territory plan

1. Territory planning is a valuable tool for sales and operations leaders, as it allows the sales process to strategically attack the market. With the right strategy, organizations can optimize sales momentum because the right salespeople are chasing the right opportunities.
   
2. Territory planning allows you to save time. By assigning territories based on geography, industry experience and product knowledge, sales teams can spend more time selling and less time learning about new products and industries.
   
3. This targeted approach means that success rates are higher, and deals are bigger; companies that focus on providing a great customer experience yield revenue 4-8% higher than their less customer focused counterparts.
   
4. By matching your sales teams with territories that align with their skillsets, you are ensuring that your customers are able to communicate with someone that understands them. With a consistent approach, relationships continue to build, leading to customer loyalty and repeat business.

5 Step Plan for Successful Territory Planning- Factors to Consider When Planning Sales Territories

The creation of a strong sales territory plan will depend on your product, industry and resources, but there are some tips that are relevant across industries and organization sizes.

Step 1: Let Data and Research Guide your Strategy

When targeting your audience, you need to look at the data first. Your data can be divided into three broad categories: historical data, customer behavior and journey, and your Ideal Customer Profile (ICP).

Historical and first party data give you real-time insight into how your customers respond to your existing marketing and sales activities. At the very least, marketing, sales and operations leaders across GTM organizations should be looking at common characteristics within your:

• TOFU – which segments perform the best for ad campaigns? Of those, which ones close?

• Sales Conversion & Win Rate – what do your buyers look like? Who are your best customers in terms of deal size, annual revenue, lifetime value and sales velocity?

Identifying common characteristics can help you to see your areas of strengths and identify stronger prospects. However, be aware of falling into the trap of thinking that only people within those verticals or geographies are strong prospects; you could risk addressing the wrong audience or missing valuable opportunities. One big mistake that GTM teams make is to assume that the data is static. Your market will be shifting constantly, so in order to be as effective as possible, it is essential that you constantly revisit your data. RevenueBase’s Database as a Service allows you to access real time data when you need it; this prevents you from reacting to outdated information and can put you ahead of your competitors. 

Step 2: Align (and involve) your entire GTM Team

We spoke about the importance of alignment in our segmentation piece: Segmentation Strategy Success: A Four-Step Guide for GTM Leaders. If your entire Go-to-Market team is not involved in the finalizing of your sales territory strategy, you risk misaligning your sales and marketing efforts. For example, marketing may run targeted campaigns that produce more leads than sales can handle in certain territories, whereas sales teams in other territories may not have enough leads to pursue.  

For marketing teams, one of the biggest factors to consider is sales capacity. Demand generation teams need to know that sales teams have the capacity to act on the leads that are coming their way. Without collaboration and proper planning around sales goals, there is a risk that potentially valuable leads will go cold.

To measure their potential capacity, marketing ops needs to look at the volume of leads they are driving in; past performance provides good insight into what can be expected. Product marketing, on the other hand, will have an in-depth understanding of the market. They will know the type of demand and content that needs to be created, what buyers are looking for during the decision-making process, and how to identify the most promising markets. They may also have an understanding of the regulatory requirements, such as data compliance, and product regulations, that could have a positive or negative impact on marketing efforts.

By working together, sales and marketing operational leaders can identify areas of higher capacity and lower leads – these are the areas that they may decide to focus investment and targeted campaigns on. This is where multiple categories for sales territory mapping and planning can be useful; teams can start with geo but layer on vertical, product or organization size as well to further split out larger territories.

Step 3: Staff your Territories for Success – Understand your Sales Reps’ Strengths

Once you have the entire GTM team on board with your territory strategy, you need to make sure that you have the right staff to achieve success in each territory.

• Leverage your existing sales team’s expertise – examine your team members’ specific areas of expertise across products, industries or geographies to enable your sales reps to meet decision makers where they are (both literally and figuratively), and speak to them in a language they understand.
  
• Manage team size – according to RevOps Podcast, if you choose to only look at one data point to determine if your lead generation is in alignment with sales team capacity, look at the percentage follow up on leads; this provides an instant insight into whether your lead generation is being maximized for each territory, or if precious leads are being left behind. If you identify that you have one territory with a much lower percentage of followed up leads than another, you should start by diagnosing the best solution for that territory. Do you need to pull someone with extra capacity to assist? Do you need to hire additional reps to cover that territory? Do you need to implement sales training and enablement to ensure the local sales team knows the workflow expectations when they’re sent leads?
  
• Marketing planning and campaign/ lead allocation – as above, you need to make sure your marketing efforts are generating leads in the right places for teams that have the capacity to follow up on them.
  
• Fair and equitable territory planning – use data to make sure your territories are measured and allocated fairly. By leveraging premium buyer insights and signals to determine your top Ideal Customer Profile (ICP) accounts, you can identify the most fair and equitable way to divide territories. Not only is equitable territory planning helpful for sales culture and retention, but you can also get an accurate assessment into your top performers, and determine who may need a little extra support. When assessing territories, don’t be afraid to dig deep: are there additional nuances that could hinder performance, such as gifting strategy limitations for ABX strategies, or heavy compliance regulations for finance and healthcare? Although you may have worked hard to build an equitable territory strategy on paper, certain rules or regulations may drastically impact marketing’s ability to run certain campaigns.

Step 4: Build Strong Operations around Territory Management

With your territories clearly defined, it is important that your operations are designed to align with them so that you can get the full impact of your carefully planned territories.

1. Clear rules of engagement are important here; make sure that all sales team members know what the protocol is for overlapping markets and uncertain boundaries so that all prospective and existing customers can get a first class experience, without duplication of activity or missed leads.
   
2. Go-to-Market Operations managers need to make sure that all target accounts are built into the CRMs and their ICP accounts are added, even if they haven’t been assigned out yet. It’s critical to ensure your accounts have the data sources your segmentation strategy is built upon (e.g. company industry). Once in the CRM, the inbound lead workflows should be built with the territory strategy in mind so that, when leads come in, the process of assigning the right rep to the right accounts is streamlined, saving time and money, and allowing the sales teams to focus on the act of selling.

Step 5: Revisit and Optimize your Territories Regularly

Typically, sales and ops managers will review their sales territory strategy and planning annually so that sales reps can get comfortable in their territory. That being said, you should always keep an eye on sales rep head count and capacity to make sure that you have enough talent to meet future growth plans. For example, if your strategy intends to double activity within a specific area by mid-2024 or you plan for new territories to open, you need to make sure that you have the staff in place within that territory to meet that need. You can expand to new territories starting with marketing and BDRs, while assigning relevant leads to existing sales team members to warm up the market and avoid leads going cold.

While an annual review of your territory strategy is usually adequate – assuming you don’t have a large company event take place, such as M&A activity – it’s best to take a more agile approach with the target accounts assigned within your various territories. In order to determine how often you should review the target accounts within each territory, identify the volatile data points that you are using to define your ICP. How easy is it for companies to move in and out of the segments of your GTM strategy? For example, if a key signal of your ICP is the size of a sales team, you may want to review your target accounts quarterly, especially during these macroeconomic conditions. The more volatile the data points are that matter to your organization, the more frequently you should review your target accounts. This will ensure your territories remain aligned with your GTM strategy, and sales reps have clearly defined boundaries, so that they can get the best results. Using outdated information, especially when identifying target accounts to focus your sales and marketing dollars on, will do more harm than good when building and managing your territory plans.

If you want to accelerate your sales and territory planning, sales productivity and operational management, RevenueBase can help you by providing you with the tools that you need to succeed.

Get in touch for a free demo or to find out more.