How To Optimize Your Sales Territory Planning

The territory plan is the backbone of a go-to-market strategy. When building a territory plan, it is key to look for ways to streamline sales activities, use data to inform decisions whenever possible, and define objectives for maximum clarity across the board.

5 Keys to Optimizing Sales Territory Planning:

1. Clearly identify your main objectives
2. Lean hard into data to inform your strategy
3. Take the time to truly understand your sales team
4. Encourage workflows and collaboration between silos
5. Automate wherever possible

1) Clearly identify your main objectives 

The purpose of territory planning is to group account data in a way that optimizes for your business strategy. Typically, this is done based on the selling strategy, such as firmographic, status-based, or needs-based.

Although territory planning may seem straightforward, there are a number of different ways you can approach it. As such, it is key to identify your main objectives at the onset. Here are a few examples of some objectives that you may have for your territory plan:

• Coverage: Ensuring that sales reps are able to spend the right amount of time on profitable customers and prospects.
• Workload: Understanding the workload requirements for each account and territory, and determining the “ideal territory workload” for each sales rep.
• Opportunities: Realigning territories in order to find hidden or new sales opportunities.
• Quotas: Designing territories that are properly aligned with quotas.

Ultimately, the goal is balanced territories. The key is being laser focused on which criteria you prioritize when defining what “balanced” means in the context of your organization and market.

2) Lean hard into data to inform your strategy

Hopefully, when determining your objectives, you used data from previous years to identify what worked well and what didn’t. Once you’ve articulated your objectives, you can go back and be more methodical in setting the benchmark metrics that will help put your objectives into action. (Note, we can’t help but to stress the important first step of making sure your data is clean and accurate!)

Here are some examples of data that you might analyze for each of the objectives in the previous section:

• Coverage: How many accounts are in each territory and what are the estimated deal sizes of each? Is each territory balanced so that it includes comparable numbers of large and small accounts?
• Workload: In the past year, how many hours were spent on each account in the territory? This is different from coverage, since we all know there are often small accounts which demand a lot of time and attention from reps.
• Opportunities: How many accounts have a high lead score but haven’t yet been converted to an opportunity? Balancing these accounts can ensure that reps have time to devote to these potential new opportunities.
• Quotas: What are the deal sizes for the accounts and at what stage are they currently in the sales cycle? Again, this is different from coverage. Factoring in sales life cycle to estimate when the deal will close, and thus, how the territory will balance from a quota perspective.

3) Take the time to truly understand your sales team 

Although we refer to headcount generally when we do territory planning, we know that not all reps are created equally. Understanding your sales team means not only looking at one-dimensional metrics like attainment, but also looking at metrics such as retention and customer feedback.

Doing a strength, weakness, opportunities, and threats (SWOT) analysis, can help you take an objective look at your team. Understanding your team can help you to pair your reps with territories that allow them to capitalize on their individual strengths. Likewise, you can identify threats such as possible attrition that you can try to mitigate. Not only is this good for your bottom line, but it also can pay off in terms of rep satisfaction, which leads to retention and customer satisfaction.

4) Encourage workflows and collaboration between silos

If your organization is one where the strategy, ops, and sales managers don’t often work together, territory planning is the time to break down those silos. A successful territory plan needs to be both tops-down and bottoms-up, and collaboration is key to enabling this. However, since this is normally done via email and in-person meetings, it becomes unwieldy and time consuming. Enabling workflows to run both a tops down and bottoms up plan to secure input from all stakeholders is key. Just keep in mind that if the workflow is overly complicated, it probably won’t end up working. So, try to keep it as simple as possible.

5) Automate wherever possible

The success of your territory plan is the sum of items 1-4 above. The ease with which you roll out that territory plan often depends on how well you leverage automation. If your CRM or territory management software has features for hierarchies, roles, what-if views, and assignments, you can automate the implementation of your territory plan. As an example, you can set up hierarchies to define your territories and roll up into segments. Then, throughout the year, you can automate your territory plan so that changes that are entered in your CRM are then reflected back in your territory plan.

For more best practices on how to optimize your territories, check out The Ultimate Guide to Territory Balancing.