A key element of sales performance management is territory mapping. For your business and your objectives, the ideal sales territory mapping may be bad for another business.
By taking more aspects into account when designing your sales territory, you may increase your territory mapping and your sales outcomes. The following points may be useful to you in certain cases, but not in others.
Defining the Borders of the Territory
Territorial limits can be established in a variety of ways. While some businesses set limitations based on geography, others select specific salespeople to work with clients in particular industries. In other situations, certain salespeople may be tasked with managing particular accounts. Each of these strategies has advantages and disadvantages.
Using geographic boundaries to map sales territory is the most common approach. It’s also the simplest method for establishing territory. While some geographic regions comprise a state or many states that share boundaries, others may include a significant city and its surroundings.
For sales companies, this strategy frequently results in issues. Giving a single salesman a region with highly desirable customers is a risk since if they are unable to close those deals, the firm may suffer.
By giving your clients access to a subject matter expert, you may frequently increase your sales when you provide services to multiple sectors. You can benefit from this strategy since each salesperson learns about the client’s industry and business by using industry boundaries. This gives them an advantage over a salesman who lacks their level of knowledge by enabling them to build and apply their industry savvy to add value.
Boundaries for clients
A further common method of distributing regions is by allocating specific clients to each salesperson. This is a well-liked strategy for managing significant, prominent, and aggressive clients. These businesses assign an account executive to each client, who works with a small number of customers. A client may also be given an account manager when they expand. While larger sales organizations frequently view it as a smart way to increase income and client lifetime value, smaller businesses may find it to be expensive.
Other Geographical Factors
Setting up your territory’s borders is simply one factor to take into account while creating your mapping strategy. Additionally, the following factors are present.
Performance in the Past Territory
Start by reviewing each region’s sales history, including the clients and potential prospects it involves, in order to optimize your sales territory mapping. To acquire a complete view of the demands that must be met in each region, you may also look at the purchasing patterns and pain issues of each customer. Additionally, keep an eye out for trends and any alterations to a client’s environment that can necessitate a change in how you approach the region. This activity will reveal fresh chances for development.
Large cities were given top priority in the field in which I spent the most time. Competitors of ours opted to operate in small towns, banking on their hegemonic status to maintain the few important clients there. Due to the lack of a suitable successor, these sales organizations experienced a decline in revenue after a significant client left.
To maximize your outcomes, sales territory mapping is used. Each region has a variety of variables that you can take into account, such as the quantity of potential customers, future growth potential, and overall economic health. You might also take the cost of occupying a territory into account. For instance, there has been a recent trend of businesses relocating from pricey regions to more business-friendly states. You should keep this in mind as you lay out your sales zone. The investment you make in a territory might be influenced by the market potential.
Geographical Competitive Analysis
You must be aware of who of your rivals are present in a given territory. This is especially true if your main plan is to displace your competitors’ clients, often known as eating your competition for lunch.
Knowing which competitors control which clients and how to mitigate their advantages and exploit their disadvantages are necessary for success in a territory. You’ll need this later on for your sales strategy.
Budgets and Resources
A budget for salespeople, marketing, and travel expenses is required for each area. In order to successfully take care of the clients you acquire and serve in a region, extra resources, such as a customer success function or customer service, may be needed.
Goals, revenue, and performance in sales
After you’ve defined your territory, it’s critical to think about the objectives and tactics that would work best there. Because each region is unique, it’s crucial to outline your goals for each one, including how you’ll achieve them and track your progress.
Goals for Territory Sales
Every area needs concrete objectives, with revenue as the first step. In order to calculate the net new income you require from each territory, you will also have a growth goal. Market share objectives are frequently used for sales territory by large sales teams.
Cross-selling with current clients can result in net new revenue, but the majority of sales territory will focus on acquiring new clients in order to increase net new revenue and future growth opportunities.
A sales organization that is successful will have both an overall plan and a method. By adapting your strategy to the demands of each territory when you have distinct marketplaces for distinct territories, you can increase sales. Cross-selling and upselling are crucial tactics when dealing with a territory’s current customers.
Think about the approach that would help you market your products the best as well. You’ll need various sales techniques for them if you have both a transactional service and one that calls for consulting. You might need to adjust what you typically do or choose the appropriate strategy if a market has a specific demand that needs to be met. For instance, the techniques you employ in regions with large consumers must support the fact that these clients frequently have complex purchasing habits.
Sales Territories Measured
There are countless indicators and KPIs available for assessing sales regions, but choosing the right ones is crucial. Dashboards used by sales professionals resemble those used to land a spacecraft on Mars. Multiple sales KPIs are necessary to evaluate performance in each territory.
Revenue, net new business, acquiring new clients, and budget achievement are the four primary KPIs. Sales volume is a significant metric for some sales firms. Additionally, you ought to consider KPIs that gauge sales effectiveness.
A successful action plan
Understanding the requirements of various markets, establishing quantifiable objectives, and utilizing the appropriate tools and tactics all go into effective sales territory mapping. It necessitates in-depth knowledge of the market, rivals, and clientele’s requirements.
To ensure that the sales team can meet its objectives, a successful action plan should offer the tools for success. A budget for sales staff, marketing, and travel expenses is required in the action plan, along with metrics to assess each territory’s performance and tactics to boost sales in each. The individual action plan for each territory should also have a strategy for attracting new customers and expanding market share.