TERRITORY MANAGEMENT: Definition, Tools, and Why It Is Important

When done correctly with the right tool, territory management can improve your sales performance in several ways, including efficiency, profitability, proactive actions, and burnout prevention. On the other hand, a lack of a territory management tool can mean the difference between a sale being successful or unsuccessful. 

Let’s first talk about why brands value territory management before giving you a rundown of the best tools for the job. 

What Is Territory Management?

Territory management involves efficiently setting up territories and assigning sales teams to them, minimizing distractions, and enhancing morale, teamwork, and sales. It allows sales managers to schedule effective routes, reduce time waste, and set sales goals for teams. Additionally, territory management involves specific sales reps or regions covering a group of customers or retailers.

In addition to geographic dependence, the market potential of a store or outlet determines territories. By effectively allocating resources, territory management aims to maximize revenue. If a territory is underserved, there won’t be enough sales representatives to handle it, which could cause sales to decline. This is because representatives in such territories are overworked, which makes it difficult for them to operate efficiently. As a result, they pursue fewer leads and spend less time with clients.

Therefore, you must define the following before you can define a territory:

• Your product type
• Your competition
• Distribution channels and transportation
• The existing workload of the sales team
• A territory’s potential for sales
• The individual performance of sales reps is used to decide the type of territory they are going to be assigned

On the other hand, having too many sales representatives in a territory results in everyone having less than ideal work, and there is a substantial opportunity cost to take into account. Because there aren’t enough agents in the locations where they are needed, sales are lost as a result.

What Is the Role of Territory?

Throughout their careers, territory managers perform several significant tasks, including:

• Examining sales data and choosing the best sales strategy
• Interacting with clients and paying attention to their queries or concerns
• Enhancing interactions with customers through gatherings or marketing activities
• Reviewing market statistics and financial information from rival companies to resolve sales challenges
• Updating sales reports and presenting them to executives
• Greater sales and customer loyalty result from improved customer support and market coverage.
• More clearly defined responsibilities for a particular area result in motivated sales representatives, accurate performance assessments, and a decrease in employee attrition.
• Greater area control results in better staff incentive planning and more efficient territorial cost allocation.

What Are the 4 Types of Territories? 

#1. Geographic:

The most typical kinds of sales territories are geographical ones. Based on their requirements and expectations, they divide geographic areas into cities, states, and regions. These divisions enable representatives to concentrate solely on potential clients within those regions while comprehending the cultural nuances that influence client decision-making.

Furthermore, geographic sales territories save time and money if sales reps must travel. Each sales territory can range in size from a couple of blocks to an entire state.

#2. Product:

Product sales territories focus on specific market products or services, helping representatives identify potential customers and tailor marketing strategies. This approach is beneficial for businesses with diverse products, B2C and B2B services, and salespeople with technical expertise. 

Additionally, it is particularly useful for those with technical knowledge specific to the product or service.

#3. Customer:

Customer sales territories target specific customer segments or industries, benefiting B2B companies with complex but easily identifiable needs. 

Additionally, this approach allows reps to target leads and understand customer expectations, while also separating customers by size

#4. Combination:

Combination sales territories target geographical areas and customer segments, allowing businesses to target specific regions and different demographics. This approach is suitable for cosmetics companies targeting women aged 20-35. Additionally, the sales territory plan may include multiple territories depending on the industry, products/services, and geographical focus. 

However, companies with small geographic areas may not require geographical territories, while those focusing on specific products may not require product territories.

What Is the Basis of Territory Management? 

Territory management focuses on managing a defined geographic area to maximize sales and revenue for a business. It involves defining the territory, setting sales and revenue goals, assigning resources, monitoring progress, and making adjustments based on performance data. 

Additionally, effective territory management requires strategic planning, resource allocation, and ongoing monitoring and adjustment to achieve business goals within a defined geographic area.

What Is A Territory Management Plan? 

A territory management plan ensures sales teams target profitable customers by dividing them by industry, sales potential, and customer type. In today’s connected world, territories can be divided by geography or other factors, allowing strategic targeting to meet the needs of their assigned market. A strong sales territory plan allows you to:

• Make sure the who, what, when, where, and why that provide the highest return on investment are the main focus of your sales team’s efforts.
• Place salespeople in the regions, markets, or industry sectors that best match their training and experience.
• Partner strategically across teams at the company to advance the company’s goals. 
• By pairing accounts with sales teams that are aware of their particular opportunities and challenges, you can improve the customer experience.
• Create a foundation for enduring relationships with your customers and the market.

What Are the Steps of Territory Management? 

A sales territory’s setup can be a challenging and time-consuming process. To optimize your sales operations, you must first map out your sales territories and develop a strategy for your sales representatives. Here are some actions you can take to establish a structured sales territory that will support the success of your sales team.

#1. Define your market first.

Understanding your target customers and their needs is crucial before establishing a sales territory. This will assist you in deciding the location of your sales territory and the kinds of clients you should be aiming for.

#2. Research your competitors

Investigate your rivals and note their sales regions and business philosophies. You will become more aware of how to organize your own sales territory as a result.

#3. Examine the team’s assets.

Decide what areas you can deliver with your present resources after assessing the expertise and availability of your current team. Take into account elements like staff availability, transportation expenses, and the size of your sales team.

#4. Establishing sales territories

You can start outlining your sales territories once you have a decent knowledge of your market, competitors, and resources. You can designate a sales representative for each territory and mark its boundaries on a map using geographic data.

#5. Create a sales strategy

After establishing your sales territories, you must create a sales strategy. Goals, tactics, and strategies should all be included in a successful sales plan. A list of specific tasks that must be carried out to accomplish your goals should be included in the action plan as well.

#6. Track performance

It’s crucial to regularly assess performance as your sales team functions in their territories and make any necessary adjustments to the strategy. To make sure the territory is operating at its full potential, this includes monitoring customer reviews, sales figures, and other metrics. You can track territory sales and gain insight into sales rep performance with the aid of Monday.com.

Top Territory Management Software

#1. BeatRoute

BeatRoute is an intelligent territory management tool that saves time and money by assigning territories to sales reps based on factors like business potential and outlet type. It helps identify stores with potential opportunities, create territories, and generate accurate resource estimates. 

Additionally, BeatRoute also helps brands make precise calculations for on-field representatives and vehicles, resulting in high ROI and pursuing sales opportunities.

#2. Badger Maps

Badger Maps enables users to view customers and filter through them using Microsoft Excel or CRM integration. It helps brands and sales reps manage territories better, and identify stores needing follow-ups, high-priority stores, and recent sales. Additionally, the platform also offers account management, route creation, and customer check-in.

#3. Spotio

Spotio is a reliable territory management tool that enables demarcation, assignment of sales reps, and insights for brand growth. It allows sales managers and brands to define territories using state, county, city, or zip code, ensuring smooth operations and results. 

Sales teams have clarity on coverage, and brands can set permission hierarchies for visibility. Additionally, Spotio ensures transparency on territorial performance, data generation for efficiency improvement, and reporting on areas for improvement through data visualization.

#4. Zoho CRM

Zoho CRM offers a comprehensive view of closed deals, sales predictions, and optimal teams. It enables data-based intelligent decisions, seamless customer account sharing, profitable areas, resource allocation, and customer satisfaction.

#5. Maptive

Maptive is a top territory management tool that focuses on data, eliminating guesswork and ambiguity. It allows brands to create custom maps for sales territories, allowing for efficient resource allocation. The cloud-based maps are accessible to users, allowing sales teams to view, share, and communicate. 

Additionally, Maptive enables accurate store location mapping, easy territory splitting based on zip code, city, and state, and analysis of territorial data to identify areas of improvement and improve performance.

What Is the Significance of Territory Management? 

#1. It Enhances Client Services:

Your salespeople will be better able to comprehend customer needs and develop solutions if they are assigned to a set of accounts that match their background, area of specialization, and geographic location. Additionally, salespeople can establish lasting relationships and increase customer loyalty and repeat business by having consistent territories.

#2. Spending more time selling:

By matching the appropriate sales teams to the appropriate opportunities, a solid territory plan enables businesses to maximize their sales propulsion. According to industry analyst studies, factors like extensive travel, the need to learn and comprehend new markets, and administrative costs are contributing to a decline in sales productivity.

#3. Balanced Assignment:

The amount of time and effort needed to effectively manage every account in a given territory serves as a benchmark for workload. Furthermore, a good territory plan measures workloads and maps out territories so that no salesperson is encroaching on another’s territory while still operating at maximum capacity. This is crucial for achieving peak performance as well as lowering salesperson turnover, which can be very expensive.

#4. It increases motivation:

By fostering a sense of ownership among your team members, you can stop deals from slipping through the cracks and raise morale by setting attainable goals with significant earning potential. Additional benefits of well-designed and managed territories include effective coverage and balanced territories.

#5. Achieving goals is the result.

Territories serve as a tool to help a business reach its financial objectives. They guarantee coverage by directing workers’ attention as they deliver the desired outcomes.

What Is a SWOT Analysis for a Territory Plan? 

A SWOT analysis is a procedure that detects internal and external factors that may have an impact on the performance of the organization. Therefore, you can create a more effective sales territory plan if you have a stronger understanding of your strengths, weaknesses, opportunities, and threats.

Strengths

Understanding your team’s strengths and individual strengths is crucial for success in sales. These strengths reflect the organization as a whole and can help you assign sales reps to specific territories. Additionally, you should consider factors like a diverse customer base, established distribution, and an excellent service team to build on and achieve your goals.

Weaknesses

Which areas of weakness do you need to address? Consider your team’s weaknesses as well as any issues with the sales process.

Examples:

• A very large area of land
• not having enough time to fully understand the products, markets, and selling process
• not being aware of the true needs of your customers

Opportunities

Are there any opportunities in your market that you could seize? CRM software can also be used to find this data.

Examples:

• Unknown markets
• Underserved territories.
• Increasing demand for a given good or service

Threats

Find the biggest threats in each region and think about how you’ll defend against them in your selling environment.

Among the dangers you might find are:

• Disputes between rivals over the same market share
• Alterations in technology
• New industry and government requirements

What Are 5 Ways To Get a Territory? 

A firm’s sales and revenue growth can be significantly impacted by effective territory management, which is essential to sales and marketing strategy. Territory plays several important roles in business, such as:

1. Targeting particular customers: 

Businesses can concentrate their sales efforts on certain customer segments or markets by defining particular geographical or account territories, which can help increase the efficacy of their sales and marketing initiatives. 

2. Maximizing sales and revenue: 

By ensuring that sales assets are distributed effectively and efficiently to the regions that are most likely to generate revenue, effective territory management can help businesses maximize their sales and revenue potential.

3. Developing customer relationships: 

By designating sales representatives for particular regions, businesses can support the development of long-term interactions with consumers, which may result in increased customer loyalty and repeat business.

4. Improving customer service: 

Sales representatives can offer more personalized and efficient customer service by being familiar with the particular requirements and tastes of consumers within their territory, which can help forge stronger bonds and raise customer satisfaction.

5. Increasing market intelligence: 

Businesses can gain insightful information about market trends, consumer behavior, and competitor activity by closely observing sales performance within designated geographic areas. Therefore, this information can be used to guide future sales and marketing strategies.

Sales Territory Management 

Sales territory management involves setting up territories and assigning sales teams efficiently, minimizing distractions. Additionally, it involves a sales territory mapping process, segmenting areas based on demographic data, and assigning sales representatives based on skill and experience. This helps reps focus on valuable leads, prospects, and customers, ensuring efficient and effective communication between teams.

Benefits Of Sales Territory Management

Sales territory planning and management are essential for companies selling to multiple geographic locations. By strategically covering target markets, companies can optimize results by tailoring their approach to each region’s unique needs and pain points. Since sales territories vary in factors such as deal size, sales cycle length, number of touchpoints, and travel time. 

Therefore, sales territory management allows companies to assign the best-suited reps for each territory and adjust the size of their sales force to ensure no team is underserved or overserved. 

Secondly, maximizing each rep’s time is crucial for sales reps to focus on the right leads and improve team morale. Focusing on a specific territory allows reps to understand the customer base and identify specific needs, making it easier to reach sales goals in less time. 

Therefore, sales territories provide powerful performance tracking and forecasting, allowing companies to dive into specific segments to understand successful sales strategies, activities that didn’t move the needle, and sales trends during different seasons. 

Naturally, deepening customer relationships is also essential for sales reps to customize communication with new leads and current customers in a territory. Reps in charge of specific territories help build a strong local presence and lasting customer relationships, regardless of the company’s size.

What is Enterprise Territory Management? 

Enterprise Territory Management improves the original Territory Management functionality by providing territory models, types, and states. Additionally, it simplifies charting territory, accounts, and possibilities, and allows custom reports for optimal coverage. 

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References:

Beatroute

Indeed

Coursera