Sales territory optimization can significantly improve customer engagement, allowing your reps to better connect with customers and build trust. It also reduces “windshield time” and allows for a more balanced workload among the team, making meeting and exceeding quotas easier.
Poorly designed territories can impact performance by 14%, so it is essential to have a dynamic process to adjust them when needed. This includes balancing opportunities, distributing quotas, and more.
Identifying Opportunities and Challenges
Territory management techniques and route optimization software help companies maximize sales efficiency. They help to divide territories so that quotas are realistic and attainable evenly, and they align individual goals with broader company objectives. This helps to keep salespeople motivated and prevents missed quotas. It also helps to reduce travel expenses by focusing resources on regions where they will generate the most revenue.
The size of a sales territory depends on many factors, including the type of industry, the size of the average account, and customer demand in a specific region. Climate, for example, can influence which products are sold where — solar panels are more likely to be sold in desert regions, while furnaces are best suited for cold climates. Likewise, the size of a potential customer can influence how quickly a sale is closed.
Moreover, the sales process is inherently dynamic, and there are always new opportunities to capture or threats to defend against. That’s why revenue teams now use advanced analytics and AI-driven predictive models to analyze customer engagement data in the Dark Funnel, deanonymize and decipher it, and determine the best ways to engage buyers at precisely the right moment.
Using these data-driven techniques, revenue teams can rapidly make intelligent what-if scenarios. That enables them to craft plans that are flexible and responsive to change, which can help them address challenges that may arise.
Allocating Resources Optimally
Sales territory optimization is a critical component of sales management. It enables companies to develop sales territories that maximize sales opportunities and ensure adequate coverage of target markets. It also allows sales leaders to set achievable quotas and goals for their teams and ensure they are correctly aligned with company objectives.
Historically, sales territory planning has involved a lot of guesswork and cutting-and-pasting in Word documents or spreadsheets. Managers might have defined territories based on distance or geographical area, but often, they need to consider specific market characteristics or customer profiles. This led to some parts requiring more service while others needed to be served.
Territory management involves analyzing the unique characteristics of each territory to identify the best potential customers for your business. This is essential in building solid relationships with prospects and converting them into devoted clients. To do this, you need to know your prospects’ industry, size, and location to identify the most appropriate marketing materials and sales tools for your audience.
Another critical element of sales territory management is identifying the optimal resources required to service each territory. This can be done by analyzing the concentration of customers in each region and assigning sales reps to parts based on their workload and skill sets. This way, you can avoid overworking some of your sales reps while ensuring that all territories have the right level of service.
Developing Target Account Lists
Assigning the right territory goals to your sales team is essential in maximizing performance and aligning with company objectives. These goals can be tied to revenue targets, market share, customer acquisition, or other metrics and should be communicated to your team.
Identify the characteristics of your ideal customer profile (ICP) to develop a target account list. Your ICP should be based on various factors, such as industry, size, location, purchasing behaviors, and the scope and complexity of the problems your products solve. You can use predictive models or machine learning or even do it the old-fashioned way—a manual scoring process by your leadership and sales teams.
Once you’ve compiled a list of target accounts, prioritize them based on their interest, urgency, and fit. This will help you focus your efforts on accounts ripe to convert. This can be done through several methods, including a cross-channel platform like Factors, which enriches anonymous website traffic to identify statements and assign them to the most appropriate territories.
While focusing on new business is essential, keeping current accounts happy is vital. To do this, you must ensure that your territory goals are geared toward the right balance of new and existing funds. A good rule of thumb is to aim for a 50/50 mix of new and existing accounts.
Creating Account Scores
Creating account scores helps sales teams identify the best prospects and allocate resources optimally. For example, a company could assign a higher score to accounts with a high potential revenue, a more extensive customer base, or a high level of engagement with its brand. Moreover, the score can help them prioritize the most important accounts and set more challenging goals for themselves.
It’s also important to align sales territories with broader business objectives. This ensures that the goals and strategies for each region are meaningful, contribute to overall success, and are a part of a cohesive approach. It’s a good idea to hold team meetings and one-on-one discussions with sales representatives to clarify the goals they are expected to meet. Be receptive to feedback and suggestions, as these can improve the entire team’s productivity.
Another challenge that can negatively impact sales efficiency is needing the right technology tools to support the process. A company must invest in modern sales channels, such as Salesforce, to increase efficiency and ensure all team members can access the data needed to make informed decisions.
Finally, many companies need more alignment between their sales and marketing teams. This can result in missed opportunities and reduced sales efficiency. To avoid these issues, it’s a good idea to implement collaborative initiatives between the two departments to drive sales and revenue growth.
