Effective sales territory optimization is essential to the success of your field sales team.
Unfortunately, territory optimization is one of the hardest tasks that field sales managers are asked to complete. Why? Because there are so many different factors to consider.
You need to ensure your territories have enough potential to keep reps hungry. But not so much that they get buried in an avalanche of leads. The right balance will give reps a realistic chance to earn incentives while maximizing sales and revenue for your company.
In this article, we’ll teach you how to optimize your approach to this important topic and achieve sales territory alignment. Doing so will lead to more success for your organization.
What Is Sales Territory Optimization?
Sales territory optimization is a data-driven approach to territory management in which sales territories are divided and distributed to reps based on the sales potential of each territory.
Put simply, sales territory optimization will ensure your territories generate maximum revenue.
How so? By considering each territory’s geography, as well as the industry and size of the potential customers within, field sales teams can allocate resources more effectively. When this happens, sales will naturally improve, leading to a substantial boost in company revenue.
Why It’s Important To Continually Optimize Sales Territories
Territory optimization will give your field sales team a competitive advantage. Just know that it’s not a set-it-and-forget-it kind of strategy. You need to consistently revisit your territories and look for new ways to align them. Doing so will help you achieve five important benefits:
Territory Optimization Creates Alignment Between Reps And Customers
Nothing stays the same in business.
Customers grow, switch locations, and/or go out of business. Your sales strategies need to follow suit, adapting to current market trends and changing customer preferences.
Sales territory optimization will help make sure your territories are always cut and distributed properly. When this happens, true alignment between sales reps and customers can happen.
Territory Optimization Creates Balanced Workloads
As a sales manager, you need to make sure your reps are assigned equal workloads.
The last thing you want is for Rep A to feel overworked while Rep B has nothing to do. This will create friction between colleagues while preventing your team from maximizing sales.
Once you prioritize sales territory alignment, though, you’ll be able to cut and distribute territories in a fair and balanced way that ensures greater success for everyone.
Territory Optimization Improves Rep Productivity
Sales territory optimization can boost rep productivity in two different ways:
- First, it can help you divide territories in a way that reduces travel time. When your reps spend hours in the car, they have less time to talk to prospects and close deals.
- Second, it can boost rep satisfaction because reps will be able to make more meaningful contributions to your company’s goals and earn more commissions. Happy reps stick around for longer, minimizing the need to find and train new people.
Territory Optimization Helps Strengthen Customer Relationships
True territory optimization does more than divide prospects among reps in an equitable way. It also matches prospects to the most qualified reps, which helps increase sales.
Every seller has a unique background, set of experiences, and collection of strengths.
Paired with the right prospects, these things become advantages. Paired with the wrong prospects, they’re hindrances. You want the former, as it will allow your reps to build deeper relationships with their prospects and close more deals—now and in the future.
Territory optimization drives revenue growth
Last but not least, effective territory alignment will help your department earn more money.
It makes sense if you think about it. When your reps receive balanced workloads that don’t bog them down, they’ll become more productive. When they’re assigned the right prospects, they’ll make more sales. Both of these things lead to revenue growth.
Territory Optimization Best Practices
There’s no doubt about it; sales territory optimization is incredibly important. But how do you actually achieve this goal? These four best practices will help you:
Ensure Proper Sales Coverage
First, make sure that every inch of your territories are assigned to a rep on your team.
When you’re done, your reps should each have specific locations to sell within. This will bring clarity to your sales process and keep them from fighting over potential customers.
Speaking of which…
Prevent Territory Overlaps
You should avoid overlap scenarios at all costs.
Doing so will boost productivity levels because your reps won’t waste time traveling to and communicating with prospects who’ve already spoken to a member of your team.
It will also elevate the customer experience. Potential buyers do not want to be hounded by multiple sales reps—even if said reps don’t realize that they’re working the same lead. If this happens, don’t be surprised when potential buyers become missed opportunities.
Assign Top Performers To Key Territories
How much thought do you put into territory assignments? If the answer is anything less than “a lot,” you need to rethink your process because it’s not helping you with territory optimization.
Don’t assign territories at random. Assign them to the most qualified reps. This is especially important with key territories, i.e., areas that drive significant revenue for your company.
Perhaps one of your territories is loaded with tech businesses. And maybe you have a rep on your team that used to live and work in Silicon Valley. Assign them to that area.
Regularly Review Territory Performance
Lastly, assess territory performance on a regular basis. That way, you know which areas bring in the most revenue for your company and which struggle to gain traction. Then ask, “Why?”
Why does Territory A produce more revenue than Territory B? Is the rep in Territory A a better seller? Is territory B filled with a certain kind of customer, one that’s experiencing industry-wide setbacks? Maybe a competitor is stealing customers in Territory B.
When you know why your team produces the results they do, good or bad, you can adjust your sales strategy accordingly. The result? More sales, revenue, and success.
Optimize Your Sales Territories With SPOTIO
Sales territory optimization will lead to better alignment, productivity, and revenue for your sales team. The question is, how do you achieve it? The tips in this article will help.
Know what else will help? A proven software application that makes it easy to cut and distribute territories, optimize travel routes, and generate customer sales reports.
SPOTIO was specifically designed for field sales teams. As such, it’s equipped with all of the capabilities above, as well as lead generation, appointment setting, multichannel communication, task automation, customer mapping, and more.
Long story short: SPOTIO will help you optimize your territories and make more sales. Sign up for a free demo of SPOTIO today to see it in action and decide if it’s right for your team.