5 Best Practices for Optimal Sales Territory Planning

5 best practices for optimal sales territory planning

Sales territory planning is a process that has, historically, brought pain to organizations around the globe. What if we were to tell you it didn’t have to be that way?

Of course, every organization has different needs and goals. But when it comes to territory planning, there are a few hard and fast best practices to optimize your efforts without the headache.

Read along to learn more.

1. Conduct Comprehensive Market Analysis

Effective sales territory planning begins with a thorough understanding of the market landscape. Before diving into the actual planning, it’s essential to gain insights into the broader market context.

So what does this look like?

A business must first identify their target demographic, and this is done through the data. Your data is hiding so much information, specifically when it comes to understanding a target audience. Uncovering the needs and preferences of potential clients enables sales teams to tailor their approaches more effectively, which ultimately increases the likelihood of successful conversions. 

In addition to understanding your own territories, it’s critical to take a dive into the territories and strategies of your competitors. Studying competitors’ territory allocations and overall sales strategies will provide valuable insights. Once you identify areas where competitors are thriving or struggling, you can refine your own plans to capitalize on opportunities and mitigate potential threats. 

Market analysis helps businesses better understand the demand for their products and/or services, identify emerging trends, and recognize strengths and weaknesses among competitors. When a company does its due diligence with market analysis, they are able to lay a solid foundation for effective sales territory planning.

sales territory planning best practices defining sales objectives

2. Define Clear Sales Objectives

Setting clear and achievable sales objectives is essential for guiding the sales territory planning process. There are a few things to take into consideration when establishing objectives that align with your business goals and drive overall success. 

Establish specific and measurable sales goals: Define specific targets for performance, such as revenue targets, market goals, new customer attainment numbers, etc. Each goal should be quantifiable and bound to a timeframe, allowing for ease of tracking progress. 

Align objectives with overall business goals: Be sure that your sales objectives are properly aligned with the broader goals of your organization. Whether that is increasing profitability, expanding customer reach, sales objectives should first and foremost support and contribute to the overarching business strategy. 

Ensure objectives are realistic: In order to achieve a truly successful territory plan. You must set realistic sales targets that consider factors like market conditions, industry trends, resources, etc. It’s always nice to aim high with stretch goals, but setting unattainable goals are a massive hindrance to performance. 

Defining sales objectives during the territory planning process might not necessarily be intuitive, but they provide teams with the best roadmap for success. They also serve as the guiding principles for territory planning, as it helps managers allocate resources and align sales efforts accordingly. 

3. Segment Territories Strategically

Segmenting territories in a strategic manner is mission-critical for optimizing both sales efficiency and effectiveness. By dividing territories based on relevant criteria, businesses are able to tailor their sales strategies to meet the unique needs of different customer segments. 

So what does segmenting a sales territory look like for different organizations?

It begins with identifying the key factors that influence purchasing behaviors and sales opportunities inside of each existing territory. These factors might include location, demographic characteristics, industry verticals, buying behaviors, etc. 

Once those factors have been established, it’s important to balance workload and potential revenue inside of each territory. Although some territories might have higher sales potential, they could also come with more competition or logistical challenges. Take all of this into consideration to ensure that every sales rep has equal opportunity to effectively cover and capitalize on their territory. 

Strategic territory segmentation enables sales teams to focus their resources on high-potential opportunities, deliver tailored solutions to customers, and ultimately drive revenue growth.

sales territory planning best practices

4. Leverage the Right Tools and Resources

Empowering sales leaders with technology has never been more important in today’s complex landscape. It’s no longer cost or time effective to rely on spreadsheets and mountains of data while planning sales territories. 

In the planning process, it’s critical to search for and implement the right technology to do the heavy lifting. You should be looking for options that work well with your data, no matter where it’s stored. 

As you shop around, be sure to ask yourself the following questions:

  • Where does the bulk of my data come from?
  • What does updating my data currently look like?
  • What is my current process for adding new data?

The answer to those questions will help you uncover what’s most important to you in your search for the right tools. Additionally, any solution that utilizes intelligent automation in any sense of the word should be moved to the top of the list.

Choose a territory planning software that meets you where you’re at, as well as where you want to be going.

5. Regularly Evaluate and Adjust Territory Plans

Perhaps the most overlooked best practice in the sales territory planning process is the idea of re-evaluating your plan over time. The market changes. Your headcount changes. Effective sales territory planning is an iterative process that requires continuous evaluation and adjustment to remain responsive to these uncertainties. 

You will know you need to adjust your territories if you:

  • Regularly track the key performance indicators (KPIs) that align with your sales objectives
  • Engage with your sales team to gather feedback on effectiveness
  • Hire new members of the sales team
  • Lose members of the sales team
  • Create a new product ready to market

These are just a few scenarios of when it’s time to adjust your sales territories. The point is that it’s critical to keep an eye on how your territories are performing against their goals, often. The market can change at the drop of a hat. 

By regularly evaluating and adjusting territory plans, businesses can ensure that their sales efforts remain aligned with strategic objectives and responsive to market dynamics.

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