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What is Sales Territory Planning?
alexandergroup.com
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The approach to analyzing and designing the best territories should consider several important factors: “Account selection models effectively evaluate current revenue, account level growth opportunity, cost to serve and geographic location to prioritize eligible accounts.” Sales time studies: Documenting how a sales organization spends time is the best way to optimize territory design. Key sales time activities include prospecting, engaged selling, sales completion, administrative and travel time. Sales time studies should also differentiate between sales time associated with high-value call points versus low-value call points.
Intuitive sizing and deployment will maximize profit contributed by sales organization. Your business can see revenue lift opportunities increase by 20% while cost reduction and reallocation increase by 10%-15%. You can achieve these increases by following these steps: “Size: Understand account base and value vs. cost of coverage to maximize field force contribution” Build: Create “theoretically optimal” alignments, avoiding “too large to mine” and “too small to be economic” territories
Support roles: Gone are the days of the lone wolf field salesperson. Today’s engagement models usually involve lead generation and qualifying resources, field and inside sales pairing, product and technical overlay specialists, and customer success and renewal roles. The makeup of the “team” has direct influence on the territory design. “Instead, sales leaders should base territories and account loads on salesperson workload estimates which account for the design of the sales team.” Analytical Territory Planning Methods
Sales time studies: Documenting how a sales organization spends time is the best way to optimize territory design. Key sales time activities include prospecting, engaged selling, sales completion, administrative and travel time. Sales time studies should also differentiate between sales time associated with high-value call points versus low-value call points. “Based on the time study as well as efficiency adjustments, sales organizations benefit from a reality-based capacity model to identify the workload for an average territory.” Territory balancing indices: Indices are a powerful tool in balancing territories using variables such as account revenue, account potential and travel time. The most important variables are selected, and each variable is weighted according to importance.
Sales capacity models: Based on the time study as well as efficiency adjustments, sales organizations benefit from a reality-based capacity model to identify the workload for an average territory. “Indices are a powerful tool in balancing territories using variables such as account revenue, account potential and travel time.” Mapping software: Software is perhaps the least important element, but can easily allow a sales organization to visually validate, adjust for geographical constraints and calculate travel time.
What Is Sales Territory Planning? “Analyzing your clients and leads, you will find numerous common threads that connect them. Some sets of clients and leads have more in common than others. They may share basic features like an industry or physical location. They may also have common sales potential or require a similar level of attention from sellers.” Your sales organization can leverage your understanding of clients’ and leads’ shared features to form groups. These groups are sales territories. Your business can maximize success rates with each territory by clearly defining them, forming strategies for each and efficiently distributing sales resources among them. This process is called sales territory design or sales territory planning.
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