When you’re building a sales plan, make sure you devote some time to developing a sales territory plan as well. Let’s take a look at how to do so.
A sales territory is the geographical area or customer group that sales teams are assigned to. A sales territory owner is responsible for prospecting in the territory to meet their quota. Often, sales territories include other data points such as company size, industry, and more.
Why is Sales Territory Planning Important?
Sales territory planning is the best way to get your sales reps to make the best use of their time and effort. Take full advantage of your sales territory plan to make sure untapped territories or verticals are getting attention.
Sales territory planning will help you measure year-over-year performance across all territories. This allows you to collect data to understand which territories are performing well and which areas aren’t.
How to Build a Sales Territory Plan
1. Understand Your Business Goals and Objectives
Key questions to answer:
- What are your sales goals for the upcoming year?
- What was your conversion rate for the last year?
- What do you anticipate your conversion to be for this year?
2. Examine Your Prospects and Customers
Key questions to answer:
- Which customers have been profitable for you? Why?
- What do these customers have in common?
- Are there other products or services your customers are buying?
- What are the biggest objections your prospects or customers have?
- Are there unexpected territories you have sold to in the past?
3. Calculate Your TAM
First, it’s essential to develop your organization’s ideal customer profile. Your total addressable market (TAM) is the number of prospects or customers that fit your ideal customer profile. TAM can be calculated using various data points such as industry size, location, company size, and more.
4. SWOT Analysis
The best and the most effective way to identify your position in the market is to perform a SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis. With a SWOT analysis, you can see your blind spots and how to fix them.
Key questions to answer:
- What strengths will you focus on?
- What weaknesses will you reduce?
- Which opportunities will you take advantage of?
- What are the threats or potential threats?
Patterns begin to emerge when you do a SWOT analysis. Often, it’ll point toward less obvious issues. It could be more training for your sales teams, or gaps in your tech stack. We suggest approaching SWOT analysis with the aim of getting a different perspective on your business.
5. Document sales territories in your sales playbook
Next, record the sales territories in your sales playbook for your sales teams to access.
Make sure it contains the following information:
- Geographical locations identified accurately after extensive research.
- Segment boundaries along with any overlap and how it’ll be addressed.
- Sales teams assigned to each territory.
- Sales reps responsible for each segment of the territory.
- Products to be sold in each territory along with custom pricing.
6. Set goals for your territories
Have goals set up for each territory. Market opportunities change, and your sales territory plan needs to keep up.
Key questions to answer:
- What is the individual sales rep territory quota?
- What are the stretch goals for each territory?
- How do we make sure our sales reps hit their targets?
- What is the existing pipeline we have in each territory?
7. Devise strategies to accomplish your goals
The right kind of strategy provides you and your sales teams with the edge they need to conquer the market.
Using the information you’ve collected (from Step 1 to Step 5), you can set up an even distribution of territories. SWOT analysis helps you identify the skill sets of your reps. Use these insights, to assign the territories.
Key questions to answer:
- What conclusions have you drawn from your current accounts?
- How will you generate new leads in each territory?
- Which resources do your sales reps need?
- What are the gaps identified in your ideal customer profile?
- Is your CRM up to date?
Final Thoughts
An effective sales territory plan can prevent a waste of resources and sales efforts. No matter how challenging a territory is, 6sense can help. Learn how by booking a demo today.
