As a business’ sales organization grows, business owners typically start to find that they need new management techniques to keep sales operations efficient. Without changes, they may struggle with overlapping sales territories, or find that they can’t truly meet customer needs.
Territory is a group of customers spread over a specific geographic area. Sales territory management is how your business decides which salespeople are assigned to a particular territory, the marketing methods you use and how you plan to expand into new areas.
For small businesses with a growing customer base, sales territory management is essential for optimizing your sales team and ensuring that you stay competitive wherever you operate.
This is why small businesses need sales territory management — and how to effectively implement metrics that your business needs to track.
1. Avoiding Overlapping Work
Without effective sales territory management, it’s not unusual for a business to accidentally assign multiple sales people to the same neighborhoods, regions or clients.
Mapping out your sales data and clearly defining territories can help you ensure that multiple sales people aren’t being assigned to the same job, or tasks that are extremely similar.
Vaguely defined territories may have salespeople competing for the same clients as large sections of the country or your area go underserved.
Clearly defined sales territories will help each member of your sales team work together to cover the clients that your business wants to serve while avoiding overlapping tasks. This will help to boost your sales team’s efficiency.
It will also help you business avoid creating some of the tension that can come with undefined job responsibilities and internal competition for the same work or clients.
2. Identifying Over- or Under-served Areas
By mapping your sales territories, you can often spot areas that are over- or underserved, with too many or too few sales people for the number of clients in the region.
This can help you shift around resources and provide clients with the right amount of attention to turn leads into sales.
It can also help prevent you from wasting resources on areas where there are too few potential clients or customers for the number of salespeople you currently have — freeing up workers and resources for use in other areas.
3. Avoid Overburdening Salespeople
Without decent sales territory mapping, it’s also possible to request that a salesperson covers an almost impossible amount of territory.
A visual representation of your sales territories can help you optimize sales routes and ensure that every member of your sales team has a good number of clients to work with.
If some members of your sales team have many more open accounts than average, it could be a sign that your sales work is unevenly distributed.
Identifying more reasonable sales territories can help you keep workloads balanced and ensure that everyone in your sales team can provide a good amount of attention to the clients that they work with.
In addition to making your overall sales operations more efficient, this strategy will help you to avoid overworking individual members of your sales team — which can lead to stress and even burnout.
Spreading out the work will also ensure that you’re not giving members of your sales team too little work, as well.
4. Identify Areas of Higher Average Value
When mapping your sales data, you may notice geographic patterns related to annual contract value (or ACV), lead conversion or revenue.
Your sales team may tend to have better luck with customers in certain areas, or that customers in those areas are simply willing to pay more or stick with your business for longer than customers in other regions.
Similarly, you may also map leads per territory, as well as the fraction of those leads that became sales.
This can help you visualize where your sales team is making the most progress — and help you identify areas where you may have many leads but few sales, allowing you to shift resources to regions with potential clients who are more likely to convert.
Picking out these areas of revenue can help you optimize your sales plan and identify areas to expand into.
5. Manage Competitor Activity
Effective sales territory mapping and management can also help you visualize how your competition is behaving — what regions they’re targeting, where they’re making the most money and how they may be breaking down their own sales operations into different territories.
By overlaying competitor activity over your own sales territories, you may be able to find regions where you’ll struggle to compete with your competition — or areas that your competition has overlooked.
This process can help you better understand where your competition is operating — how you may be able to outmaneuver them or more effectively expand into regions your business isn’t serving yet. You may also be able to pick up a few tricks from your competition, or learn more about how businesses in your area are approaching sales.
Using Sales Territory Management to Beat the Competition
Small businesses can use sales territory management strategies to keep their sales operations efficient as they grow. These strategies will help SMBs make sure that they assign salespeople to different service areas as efficiently as possible.
They’ll also help businesses to identify regions that they may be able to serve more effectively, or areas that they can expand into in the near future.
When managing sales territories, it’s important to know which metrics will be most important to track — like annual contract value or number of leads by territory. It’s also a good idea to map out sales territories, which will give you a visual representation of sales data relevant to the areas your business is serving.