Did you know that the Harvard Business Review estimates that optimizing your territory design can increase sales up to 7% without any change in total resources or sales strategy?

That’s a whole load of revenue - and that’s why today, we’re looking at five tips to perfect your territory planning.

We’ll look at:

What is sales territory planning?

Territory planning is a plan to ensure your team is targeting the right (and most profitable) customers.

Territory planning involves dividing your sales region or ‘territory’ into smaller, manageable chunks so you can allocate your resources, maximize your sales efforts, and hit your revenue targets.

With a solid territory plan, you can identify the most profitable opportunities for your sales team and ensure they are targeting the right customers, resulting in a big triumph for your sales goals.

So, territory planning means:

✅ Identifying the most profitable opportunities within your territory.

✅ Getting a crucial part of your sales strategy right.

✅ Making sure you’re targeting profitable customers and catering your approach to them.

Territory planning and revenue operations

Why is territory planning important? And, why should you hone in on it as a RevOps professional?

Well, let’s look at the two together:

Revenue operations’ focus is streamlining the revenue generation process by aligning previously siloed teams to work towards a common long-term goal.

We’ve already defined territory planning above, but it is a crucial component of aligning teams as it helps optimize sales territories, allocate resources more effectively, and increase revenue generation.

Effective sales territory management makes sure that sales reps are targeting the right prospects and customers, leading to higher conversion rates and increased revenue.

By optimizing territories, your company wastes less resources and reduces time waste. And, when we’re dividing customers into territories, it can increase collaboration and communication internally.

Sales, marketing, and customer success teams can work together more effectively, sharing customer insights, and aligning efforts towards achieving the same revenue goals.

With that said - let’s dive into five tips to take into account when implementing territory planning.

Tip 1: Understanding your market

Tip one, understand your market.

Before you can start splitting your market up into territories, you have to understand them fully. Otherwise, how are you supposed to divide them in a way that makes logistical sense for your product/customer?

Conduct market research

Market research involves collecting and analyzing data to gain insights into your customers.

There are a variety of ways to conduct market research:

  • Surveys: Gather data on your target audience’s preferences, habits, and needs. There are plenty of tools that could help you create and distribute your survey, such as SurveyMonkey or Google Forms.
  • Focus groups: Focus groups involve gathering a small group of your target audience and discussing a specific topic or product. Use focus groups to gain insights into customer preferences and opinions.
  • Social media analytics: Track customer sentiment, engagement, and behavior. You can use social media analytics tools like Hootsuite or Sprout Social to track and analyze this data.
  • Analyze industry reports: You can use up-to-date reports to gain insight into the latest developments in your industry
  • Conduct competitive analysis: Research your competitors to identify their strengths and weaknesses, see who they’re targeting, and what demographic they’re forgetting about. See how customers react to their products and services and see what you can do to improve it.

Other market research techniques include interviews, analyzing website analytics, customer feedback surveys, and more.

Use data analytics tools

A great way to understand your market is to analyze the vast amounts of customer data that you probably have already collected.

From buying habits to click-off rates, existing customer data is a great tool to give you a better understanding of what your customers want and what they don’t.

Some data analytics tools that you could look into using:

  • Clari
  • Segment
  • Tableau
  • Microsoft Excel
  • Power BI
  • Google Analytics

and many, many more! Take time to research the right tools for your organization.

You can use data analytics tools like these to help you identify trends, patterns, and insights that can help you develop effective sales territory plans.

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Tip 2: Define your territory criteria

Tip two, looking at the criteria. What makes a territory? Is it:

  • Customer demographic?
  • Geographic location?
  • Revenue potential?
  • Company size?

After you’ve understood your market, you need to know what divides your customers into succinct territories. You can do this through many ways, some of which might be niche for your company/service/product.

Define customer demographics

Customer demographics refer to the characteristics of your customer base, including age, gender, race, income, and education.

You can use customer demographics to divide your market into segments and develop territory plans that are tailored to the needs and preferences of each segment.

Defining customer demographics is important for territory planning as it allows succinct breakdowns of your customers.

However, it’s important to think carefully in analyzing these demographics as you don’t want this to lead to bias or prejudice against certain customers.

For example, if your company data and the way you’ve defined your customer, leads to a 60% young, affluent, educated, male audience - your sales tactics/messaging might unconsciously overlook or undervalue the opinions or needs of the rest of your customers.

To avoid this, make sure you’re approaching customer demographics with an open mind, and seek diverse perspectives. Instead of relying on assumptions, gather data on your target audience through a variety of market research.

Analyze the data to identify trends and patterns in customer behavior, preferences, and needs, and use this information to create a more inclusive and customer-centric approach to your strategy.

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Tip 3: Use technology to optimize territory planning

Tip three is tech, tech, tech.

Technology can be a massive help with your territory planning. It doesn’t need to be a sit-down with a map, ruler, and some pins. Instead, use technology that provides real-time data and analytics.

Use CRM software

CRM software can help you manage customer data and track sales activities in real-time.

You can use data to identify patterns and insights that can inform changes to your territory planning.

Use territory mapping tools

Mapping tools are software applications that allow you to create visual maps of geographic locations and data. They can help you visualize your territories and identify gaps or overlaps.

You can use these tools to optimize your sales territory maps and ensure that your sales teams are operating effectively and efficiently to close deals.

Here’s some to check out:

  • Portatour
  • Callproof
  • Mapline
  • Tableau
  • Badger Maps
  • eSpatial
  • AlignMix

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Tip 4: Develop a territory management plan

Tip four, what’s the game plan?

A territory management plan outlines the processes and procedures that your sales team should follow in their respective territories.

Your territory management plan should include guidelines for prospecting, lead generation, and customer engagement.

This is where your territory management is going to be the most tailored to your business needs as it should follow direct guidelines that you may already have in place within your business.

Guidelines for prospecting

Prospecting is the process of identifying and engaging with potential customers.

Your territory management plan should include guidelines for prospecting, including how to identify potential customers, how to reach out to them, and how to follow up.

Guidelines for lead generation

Lead generation is the process of generating interest in your company/services.

Your territory management plan should include guidelines for lead generation, including how to create targeted marketing campaigns, how to qualify leads, and how to nurture leads through your sales funnel.

Not sure if you have pre-existing guidelines for lead generation and prospecting? 

Bring the relevant people into a room, (your marketing, customer success, and sales leaders) and create some!

It’s important everyone has a consistent manner when speaking with the customer. Creating agreed-upon guidelines that take into account customer data and demographics is a great starting point!

Tip 5: Monitor and adjust

Tip five, the grind doesn’t stop there - keep hustling!

Territory planning is NOT a one-time process, but an ongoing one that needs continuous monitoring and adaptation.

Monitor territory performance

You should regularly monitor the performance of each of your territories to identify areas of improvement.

Though each territory may have its own unique needs, it’s important to see where things are succeeding and where there could be improvement.

Use performance metrics such as revenue, customer acquisition, and customer retention to evaluate the effectiveness of your territories.

Adjusting your territory plans

If a territory is underperforming, you may need to readjust the criteria or resources available to that territory.

It may be the issue comes from within your sales team. It’s important to talk to your sales managers to identify any gaps in skills, knowledge, or experience across your sales teams in each territory.

This will help you determine if you need to adjust your structure or provide more resources or training to certain individuals or groups.

However, if the issue is not with the sales team and you find it's external - you may need to re-evaluate a step in your territory planning process. It could be a demographic change you’ve not accounted for, or a misstep in your geography. If your territories are based on faulty data you might be missing out on revenue.

Either way, it’s important to make sure you keep monitoring and adjusting your territory plans. Your business never stops moving, and neither does your customer.

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Final thoughts

Territory planning is important, especially if you’re a RevOps professional.

To develop effective territory plans, you should understand your market, use the tools and technologies to optimize, develop a management plan, and keep monitoring.

By following these five tips and adjusting them to your individual business needs, you should be well on your way to creating a pretty solid territory plan and one step closer to increased revenue and profitability for the entire organization.

Happy planning!