It’s a new financial year and it’s time for some sales planning.
New customer retention strategy, targets, resource budgeting, and challenges to solve are all the focus when it comes to sales planning.
While you are focusing on building a killer sales plan that aligns with your company’s objectives and strategy make sure you devote some time to develop your sales territory plan.
Let’s take a look at how to do so.
What is a Sales Territory Plan?
A sales territory is the geographical area or customer group that specific sales reps or sales teams are assigned to. A sales territory owner is responsible for prospecting in the territory to meet their quota.
Often, sales territories include other data points such as company size, industry, and more. Once the sales territories have been defined, the sales reps can focus on developing tailored outreach efforts based on the territory, characteristics of customers, among other things.
A sales territory plan is a document or a strategy that outlines which sales territories are to be targeted for your specific product or service and which customers to target and to profitably close more deals.
Why is Sales Territory Planning Important?
Sales territory planning is the best way to get your sales reps to make optimum use of their time and effort. They can chase the right prospects and achieve desired results. Take full advantage of your sales territory plan to ensure that untapped territories or verticals are getting attention.
Sales territory planning will help you measure year-over-year performance across all territories. This allows you to collect data to understand which territories are performing well and which areas are not.
How To Build A Sales Territory Plan?
Now that we have an understanding of what a sales territory and sales territory planning are, the next logical step is to build a sales territory plan.
Your sales territory planning depends on your product or service, the industry you are in, the company size, and other business factors.
Make sure to check other companies in your vertical to see how they are defining their sales territories before you start to work on yours.
#1 Understand Your Business Goals and Objectives
The first step to drafting your sales planning is to understand what your company’s business goals and objectives are. This will work as the point that you can keep coming back to so as to ensure that your sales territory plan is on the right track.
Some of the key questions to be answered are:
- What is your organization’s north star metric?
- What is your organization’s mission and vision?
- Which pain points does your product or service solve for?
- What are your sales goals for the upcoming year in numbers?
- What did your conversion rate look like for the past year?
- How do you anticipate your conversion rate to look like for this year?
#2 Examine Your Prospects and Customers
The next step is to examine your existing prospects and customers to understand their unique traits, pain points you solved, challenges or opportunities you encountered when onboarding them and more.
Some of the key questions to ask here are:
- Which prospects or customers have been lucrative for you and why?
- What do these prospects or customers have in common?
- Are there other products or services are your prospects or customers buying? What does this information tell you?
- Which industries have proved to be successful for you in the past?
- What is the biggest objection your prospects or customers have?
- Are there any unexpected territories you have sold to in the past?
#3 Calculate Your Total addressable market (TAM)
Before you start to calculate your total addressable market, it is essential to develop and create your organization’s ideal customer profile and buyer personas.
Total addressable market encompasses the total number of prospects or customers that fit your ideal customer profile. TAM can be calculated using various data points such as industry size, geographical location, company size, revenue generated, contract renewals and more.
At Slintel, we believe that the total addressable market for most organizations is 3%. With Slintel, you can easily identify your TAM by accessing the right accounts to target.
This will allow you to develop the right kind of outreach and nurture processes for these prospects or customers.
#4 Perform a SWOT analysis
The best and the most effective way to identify your position in the market is to perform a SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis.
With SWOT analysis, you can recognize where the blind spots are and how to fix them.
Working on a SWOT analysis along with your organization’s leadership team will help you develop a broader perspective.
Some of the key questions to ask when performing SWOT analysis are:
- What strengths will you focus on?
- What weaknesses will you alleviate?
- Which opportunities will you focus and take advantage of?
- What threats will you set up a defense against?
Patterns begin to emerge when you do a SWOT analysis. These patterns indicate where the leak is and what areas need more attention and improvement.
For example: Your SWOT analysis indicates that ‘Singapore’ can be a good sales territory to focus on. Your past sales records also indicate that several of your customers are based out of Singapore. Hence, it would be a good geographical area for your sales reps to focus their efforts on.
Most often, doing a SWOT analysis will point towards more obscure things that need fixes. It can be more training for your sales reps and teams, or gaps in your tech stack and more. It might not always focus on revenue or territories.
However, we suggest approaching SWOT analysis with the aim of getting a different perspective on how to think about your business and territories to target.
#5 Document sales territories in your sales playbook
After completing the first 4 steps, you will have a general idea of what territories to target for the year.
It is of no use if you just identify your sales territories. Your sales reps and teams need to be able to access it easily.
One of the best ways to do this is to record the sales territories in detail in your sales playbook.
When documenting your sales territories, ensure that it contains the following information:
- Geographical locations identified accurately after extensive research
- Segment boundaries along with any overlap and how it will be addressed
- Sales teams assigned to each territory
- Sales reps responsible for each segment of the territory
- Products to be sold in each territory along with custom pricing
#6 Set goals for your territories
After identifying your territories, you need to ensure that you have goals set up for each territory. Like with identifying territories, this step needs to include your leadership team.
Market opportunities change everyday and your sales territory plan needs to keep up with it.
Therefore, it should be nimble enough to ensure that the goals you have set up can be accomplished even though you hit roadblocks (threats, for example).
Some of the key questions to ask here are:
- What is the individual sales rep territory’s quota?
- What are the stretch goals for each territory?
- How do we ensure our sales reps hit their targets? (This could include additional training, better tech stack, etc.)
- What is the existing pipeline we have in each territory?
#7 Devise strategies to accomplish your goals
Now that you have established your sales territories and goals, the next step is to focus on devising strategies to accomplish these goals.
The right kind of strategy provides you and your sales teams the edge they need to conquer the market.
Using the information you have collected (from step 1 to step 5), you can set up an even distribution of territories amongst individual reps. SWOT analysis helps you identify the skill sets of your reps. Based on all these insights, you can go about assigning the territories.
Here are some questions you can ask when working on your sales planning:
- What conclusions have you drawn from your current accounts?
- How will you generate new leads in each territory?
- What do your sales reps need to improve?
- Which resources do your sales reps need to manage their accounts and territories?
- What are the gaps identified in your ideal customer profile and how will you fill them?
- What sales collaterals are required for each territory and how will you develop them?
- Is your CRM up to date? How will you train your sales reps to manage the CRM effectively?
When creating your action plan, don’t forget to take a look at what kind of actions you can leverage, what resources you require, your due-dates, key milestones and more.
An effective sales territory plan can be the difference between cohesive and efficient sales efforts, and inefficient waste of resources and sales efforts.
Understand and implement the sales territory planning steps as mentioned in this blog to ensure your chances of success in no matter how challenging a territory is.