Rather than build territories based on historical sales, focus on the future potential of Territory Optimization. That’s where most opportunities reside and your best chances for success lie.
Over-allocated territories waste opportunities, and under-assigned territories force reps to cherry-pick accounts, resulting in missed bonuses and excessive pressure from management. Territory optimization balances workloads to optimize performance.
Identifying Your Ideal Customer Profile
The key to a good sales territory is to keep your customers and market in mind. But without an agile process for evaluating habitats, your company could miss out on revenue opportunities.
The first step in the territory design and optimization process is identifying your ideal customer profile. Doing so will help you create more effective sales territories and empower your team to meet quota goals consistently.
You can use a variety of metrics to identify your ideal customer profile, including total account value (TAV), revenue sources, and customer churn. Using these metrics, you can prioritize accounts based on their profitability and growth potential, ensuring that your best reps cover the highest-value funds.
Once you’ve identified your ideal customer profile, you can evaluate the distribution of these accounts across your sales territories. Ideally, your parts should be balanced so that each rep is given a fair share of opportunities. If some regions are over-served, this wastes resources and leads to dissatisfied clients. Over-serving territories can also cause turnover among top performers, so make sure your parts are based on market opportunities and seniority.
In addition to balancing territories, you can reduce your team’s workload by optimizing their schedules. This will free them up to spend more time closing deals and delivering customer service. Using territory mapping software and route optimization solutions, you can eliminate planning time and boost precious face-to-face time.
Creating Account-Based Marketing (ABM) Campaigns
Effective territory optimization like eSpatial helps balance sales rep workload and eliminate coverage gaps. This allows your team to focus on serving existing customers and attracting new business, which closes more deals, boosts referrals, enhances customer retention, and drives revenue growth.
Achieving the ideal number of accounts per sales rep is a complex task because different industries have different sales cycles, churn rates, and repeat purchases, which affect how qualified a statement is. However, a few key indicators can help you get started. First, measure the current value of each account based on revenue or profitability (not a total addressable market).
Then, use this data to group similar accounts together in geographic territories that are roughly equal in value. You can draw environments on a map or use sales territory management software to automatically calculate and optimize routes for each rep, drastically reducing planning time and increasing precious face-to-face selling time.
A final step is identifying the cost metrics that drive territory design, enabling you to diagnose inefficiencies and quickly implement change. For example, if you’re in the consumer-packaged goods industry and one of your territories isn’t growing fast enough, consider lowering sales quotas in high-workload territories and expanding territory size to include new opportunities. This will free up your best sellers from maintenance selling, helping you reach your target growth objectives.
Creating Sales Opportunity Maps to Transform Sales Territories
When it comes to designing sales territories, using data-backed insights is vital. However, it’s equally important to have a repeatable process and sales performance tools that make this task an ongoing activity instead of an annual event.
Sales territories need to be responsive to market changes and customer needs. When these shifts occur, the proper territory designs can keep revenue consistent and cost efficiency high.
One way to do this is by using a tool that evaluates accounts based on account potential (qualitative or quantitative). This approach helps ensure that every rep has enough funds to meet their sales quota. This also helps prevent territory overlap where two or more agents cover duplicate accounts.
As new opportunities arise, sales managers need to be able to adjust the number of reps assigned to each territory. If this is not done, parts can become over-served or under-served, and the team can lose productivity, costing the company money. This issue can be avoided by re-evaluating territories and adding or subtracting reps regularly, and sales growth will remain consistent.
Using a sales territory management solution makes this evaluation process faster and easier. This gives teams the time to focus on the most valuable opportunities, boosting revenue and customer service. It also cuts fuel costs by ensuring that routes are optimized for each day, saving sales reps from traveling inefficiently and overtime.
Creating Territory Maps Resulting in Territory Optimization
Whether you’re an established company or an upstart, you should always consider future demand when designing your sales territories. Look at churn rates, repeat purchases, customer lifetime value, and new opportunities that could impact your business. This type of analysis helps you create territories that have the potential to meet sales goals and targets.
This approach will help you find the right balance between opportunity and workload. For instance, if you’re planning for the future of your construction industry, it may be helpful to use data-driven territory optimization tools to ensure your team can cover their quotas and keep up with the growing demand for your products.
By using data-driven territory optimization tools, you can quickly see what’s working and where you might need to reassign resources or change strategy. This saves sales managers time and effort that could be better spent prospecting for more customers and cultivating opportunities.
Effective territories also eliminate coverage gaps that lead to dissatisfied customers and missed opportunities. As a result, your revenue grows when you optimize your sales territories. With fewer gaps in coverage, your sales team can spend more time on the most valuable accounts—resulting in more satisfied customers and more referrals and upsells for your business. The bottom line is that your optimized territories will make it much easier for your team to generate a profit quarter after quarter.
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