Sales Enablement

The 2024 Guide to Nailing Sales Territory Planning

Posted On
January 22, 2024
Resource Type
Sales Enablement
Territory Planning

Getting Started With 2024 Sales Territory Plans

Territory planning is one of the most important actions sales leaders take in 2024. Defining which regions and geographies reps will focus on. Drilling down into specific industries within those areas, and assigning the reps with specific skill sets or experience based on that process is oftentimes done ineffectively. With an effective sales territory plan, companies can improve sales efficiency, increase penetration into a target list of accounts, and set their team up on a path to engage the right people at the right accounts.

The benefits of sales territory planning include:

  • Increasing revenue generated by ensuring the right reps cover the right accounts
  • Reducing costs such as ramp-up time, travel, and the learning curve for your team based on their sales territory
  • Improving sales rep retention rates by putting them in a position to succeed consistently
  • Learning about where you can double down or step back a bit based on regional differences and growth opportunities

With territory optimization tools and data-driven planning, organizations can balance workloads, expand into new markets, and exceed sales goals through enhanced sales productivity.

Defining the Market

The first step in creating an effective sales territory plan is to thoroughly research and define your target market. This involves analyzing industry trends, customer needs, and pain points in order to identify the most lucrative market segments for your business. As recommended by HubSpot, you can start by gathering qualitative data through customer interviews and surveys to understand your different customer profiles and what motivates their purchase decisions.

Quantitative data analysis is also key. Examine sales history and customer demographic data to uncover where your best opportunities lie in terms of industry, customer size, and geographic location. According to Venasolutions, focusing on the most profitable segments will lead to reduced overhead costs and increased sales. With a clear picture of your total addressable market, you can strategically divide it into distinct territories that align to the customer profiles and needs of each segment.

For example, you may have an enterprise segment focused on Fortune 500 companies, a commercial segment for mid-size businesses, and a consumer segment targeting individual buyers. Defining your market is the foundation for designing territories that will drive productivity.

Gathering Data

One of the steps for sales teams to thrive in designing an effective sales territory plan is gathering relevant data on your accounts, sales history, market demographics, and more. Whether it’s leveraging customer base data to understand best-fit accounts or setting sales targets based on pipeline historicals, the numbers drive your strategy and execution. This allows you to make data-driven decisions when grouping accounts into territories and assigning them to reps. There are two main types of data you need to collect:

First, gather account data from your CRM and other sources. This includes information like account size, industry, location, sales history, and revenue potential. You want to identify key factors about each customer that will inform how you group them. Other useful account info includes purchase triggers, contractual obligations, and strategic importance. Look for customers/segments with a shorter sales cycle or who increase their spending with you over time as well! Account planning, when done with your other GTM teams will help drive this.

Second, collect sales data, market demographics, and sales metrics. Analyze industry trends, growth rates in different markets, and historic sales patterns and productivity. This context helps you spot geographic differences and growth opportunities to factor into your territory mapping.1

With detailed account-level and market-level understanding, you can define territories and quota metrics aligned to revenue potential. Maintaining updated records in your CRM ensures you always have access to the latest customer data for planning.

Setting Objectives

One part that can be overlooked but is critical for effective territory management is to define clear goals and objectives. This provides focus for the planning process and a way to measure success once the plan is implemented. Some examples of territory planning objectives include:

  • Increase sales revenue by 15% in designated territories
  • Improve sales rep efficiency by reducing windshield time through tighter geographic alignment
  • Focus on high-value accounts by ensuring reps have capacity to adequately cover key targets
  • Expand into new markets by creating territories focused on emerging customer segments

In addition to territory goals, it’s important to set objectives for individual reps. These should align with the overall corporate goals but be adapted to the rep’s specific territory, market conditions, and capabilities. For example:

  • Increase renewal rate to 90% for existing accounts
  • Upsell 20% of customers from basic to premium offering
  • Generate 50 new qualified leads per month

Having clearly defined goals at both the territory and individual levels makes it easier to design an optimal territory structure. It also provides a basis for evaluating performance and a benchmark for determining if and when territories may need to be realigned in your territory planning exercises.


Grouping Accounts

white space, key account management

Sales territory design is driven by aligning your reps and your accounts is easily as possible. Once you have gathered all the necessary data on your accounts, the next step is grouping them into territories. AGroup accounts strategically based on criteria such as industry, size, location, and other factors impacting sales productivity. Implement best practices for account mapping, including:

  • Group accounts by industry vertical to assign reps who understand that niche. A hint here is look at win rates by industry and rep!
  • Consider account size and potential revenue when grouping. Larger accounts may warrant dedicated territories.
  • Use additional factors like customer lifecycle and growth potential to group accounts appropriately. Are there types of companies that are more primed to grow? Think of internal things like the number of sales reps, additional use cases, and more.

The goal is to optimize territories by grouping accounts with common needs, challenges, and opportunities. This allows reps to become specialists in their assigned accounts. Strategic grouping also balances sales potential and effort across territories for equitable distribution.

Salesforce provides various tools to help segment and group accounts such as account scoring, grouping by field values and using Einstein Territory Management. Careful grouping of accounts into compact, focused territories gives reps the best chance to maximize sales productivity when territory allocation is accurate and consistent.

Assigning Sales Territories

Once accounts have been grouped into logical territories, the next step is to assign those territories to sales reps. The goal is to assign territories in a way that balances workloads and optimizes coverage of your target accounts and markets.

Consider the estimated sales potential and the number of accounts within each territory to prevent overloading some reps while others have spare time. It can be helpful to create a coverage map illustrating how territories overlay with market segments.

According to Salesforce, “Territory assignment rules and automation enhance territory assignment fairness and help reps build trusting relationships with their managers.” (territory assignment best practices)

Some best practices for optimally assigning territories include:

  • Consider rep locations and account proximity
  • Leverage reps’ expertise in certain markets or industries
  • Assign an equal number of high potential accounts per rep
  • Keep territories compact and contiguous
  • Use automation and rules to assign new accounts quickly

With balanced workloads and strategic territory assignments, you empower your sales team to maximize productivity and revenue generation.

Creating Sales Plans

Once the accounts are grouped into territories and assigned to reps, the next step is to create detailed sales plans and quotas for each territory. The sales plans should outline the strategies and goals for capturing business within that territory. Consider the types of customers, their purchasing cycles, potential sales volume, and share of wallet you want to achieve.

The quotas set expectations for the revenue level or number of sales the rep should generate in the territory. Quotas can be based on sales history, industry benchmarks, and growth objectives. Make sure the quotas are realistic yet ambitious enough to drive performance. Assign quotas based on product line, deal size, industry, or other parameters.

Align the territory sales plans with broader corporate goals and tie quota achievement to compensation incentives. Provide reps all the necessary background on their territory – key accounts, pain points, competitive landscape etc. so they can optimize their strategies for the territory. Set regular reviews of quota progress and refine plans as needed based on results and evolving market conditions.

For example:
Territory A plan could target increasing the share of wallet with strategic accounts in a specific industry where you have seen moderate success. Prolifiq uses this example for Europe, for example.
Territory B plan in an emerging market may emphasize acquiring new customers in a new industry that hasn’t typically been your target or focus.

Having customized sales plans and quotas for each territory sets clear expectations and enables reps to maximize productivity.

Communicating the Sales Territory Plan

Once the territory plan has been finalized, it is crucial to communicate the details to the sales reps who will be executing it. Getting buy-in from the reps is essential, so take the time to present the plan in a clear and compelling way. Schedule a meeting or call with each rep individually to walk through their new territory and answer any questions. Emphasize how the plan was designed to provide the rep with focused, high-potential accounts that align with their skills and experience. Outline how their quota and compensation may be impacted based on the new territory alignment. Finally, open a dialogue to get their feedback and make any mutually agreed upon adjustments to address concerns. Onboarding the reps increases the likelihood of successfully implementing the territory plan.

According to research from HubSpot, involving reps in the planning process can improve adoption of the territory plan by as much as 158%. Their insider knowledge of accounts can validate territory designs. Gaining alignment early on ensures reps fully understand the territory strategy and can execute it effectively. Ongoing communication and transparency will be key. Provide regular territory performance reviews and keep an open mind for tweaks to optimize coverage and sales productivity.

Providing Training

After finalizing and communicating the territory plan, it’s crucial to train and equip reps with the necessary resources to effectively execute the plan.Sales leaders should develop training programs that teach reps how to leverage the territory plan to maximize productivity and revenue in their assigned geography. For example, training may cover topics like:

  • How to identify key accounts and priority prospects in the territory
  • Building relationships and executing strategic account plans for top accounts
  • Prospecting tactics tailored to the target customer profiles in the territory
  • Crafting territory-specific value propositions and messaging
  • Using CRM and other tools to track performance metrics for the territory

Sales managers can provide reps with territory profiles containing key account lists, competitor analysis, and other actionable intelligence gathered during the planning process. Ongoing coaching should support reps in fine-tuning their approach over time based on what works best in their territory. The territory plan is a dynamic document, and training must evolve to address changing market conditions.

Sales Territory Management

After implementing the territory plan, continuously review and adapt it based on changing market conditions, account shifts, and sales rep performance. Realign territories on a yearly basis in fast-moving industries to maximize sales productivity.

The territory planning team should regularly analyze metrics like sales revenue, activity levels, win/loss rates, quota attainment, and customer satisfaction across territories. Realign territories to optimize coverage and equalize workload and opportunity if imbalances, coverage gaps, or inequities emerge.

Significant new business, lost accounts, mergers and acquisitions, or changes in company focus may also require realigning territories. Define territories differently in response to new products and services. Gather rep input to identify any territory friction points or challenges.

Realignment does not necessarily mean starting from scratch each time. An efficient sales territory plan doesn’t mean it’s perfect, but that it has a good foundation in place. Minor adjustments like swapping accounts between reps or merging/splitting territories may be sufficient to rebalance workloads. The key to a strong sales territory plan that drives sales success is combining qualitative and quantitative data, with feedback from your team that puts your people in a place to succeed

Posted On
January 22, 2024
Resource Type
Sales Enablement