How to Balance Your Sales Territories

Picture of Paulson Lan
Solution Consultant

It’s important to create and maintain not just a workable sales territory strategy but a truly balance one. While we have previously covered the “what” and the “why” elements as well as many of the benefits of a balanced territory plan, in this blog we’re focusing on the “how”. In short, it’s like a jigsaw puzzle where the main pieces are comprised of the data fields, metrics, and geographical parameters that dictate “how” you should set out your territorial software stall. Spoiler alert, you’ll be saying a permanent farewell to the physical map and marker pen.

1. Historical Sales: Looking Back to Move Forward

It’s reassuring to know that all that has been before still has relevance. By analyzing and tracking the metrics of past sales campaigns, you start to build a picture of how products and people performed in certain sales territories, and what the market conditions have been like previously (demographics, marketing campaigns, local economy, over-or under-servicing, and competitors). By using territory planning software, you can use historical data to plan territories and quotas based on past performance.

2. Revenue Potential: Stop Guessing, Start Using the Metrics

This piece of the balanced sales territories cake may seem obvious but can be overlooked as an essential “slice”. The revenue potential is the part of the “how” where you assess how much money and how many sales a given territory is likely to bring in. Your historical sales will help, but this next stage involves current market research and a much more granular appreciation of conditions. For example, there may be one large account that is likely to bring your territorial team to their target without too much effort, while in other places, which may be larger and with more prospects, there may be less certainty. Territory planning software relieves and removes much of the guesswork. By analyzing data and “what if” scenarios, it can assess that “potential” with a high level of accuracy, which means you can deploy the right level of sales resources within that territory.

3. Market Size and Segmentation: The Geographical Divide and Then Some

We’ve experienced a taste of this when outlining revenue potential, but now we’re deep into the sales territories balancing weeds. While actual geography will always play some role when you’re balancing territories, this is too simplistic an approach for many industries. Territory division is more nuanced than chopping up a state or province. As described in this recent article in Forbes, an area such as Silicon Valley in California is top-heavy with software development while other states may not have a presence for this industry at all. This means segmentation, sometimes referred to as total addressable market (TAM) is more likely to fit an account-based model with a team dedicated to one or two customers. This is also where planning of sales territories dovetails with quota allocation, so the support of a specific software solution that integrates these inseparable factors is vital.

4. Data, Performance and Workload: Getting the Sales Territories Balance Right

Aside from using historical data, sales territory balance can be better achieved by pulling in the sales performance metrics of both individuals and teams. This will help you put the right people in the best place, based on skills and ability to reach their targets. Within a given territory, you don’t just want those that can close a deal, you may require some tenacious individuals that have a track record in warming up cold prospects over time. And it’s not just skills suitability that is a factor for ensuring balance—it’s also existing workload, which is again tied in closely with quota allocation. A sales territory strategy will only stay on an even keel if your sales team is not being pushed to breaking point or conversely under-utilized.

Balanced Sales Territories: A Perfect Alchemy

Establishing and maintaining balanced sales territories comes down to a combination of human insight, responsive software, and being able to read and respond to a changing sales landscape. By investing in a customizable solution such as the one offered by Varicent, you can set and plan territories to suit the needs of your business and the market you’re a part of. Planning sales territories has never been an exact science; until now.

Discover how Varicent’s Territory and Quota Planning software can help you transform your sales strategy by booking a demo with us today.

Picture of Paulson Lan
Solution Consultant

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