Sales territory planning is a crucial part of any sales leaders capabilities. Getting it right can be a game-changer. Getting it wrong can lead to complete failure and a bunch of very unhappy sales folks and senior sales leaders. In this blog article, we look at the key elements of a successful sales territory planning exercise and some of the foundational steps that need to be taken in order to ensure success.
What is Sales Territory Planning?
Sales territory planning is the process of using various datapoints to determine what an ideal sales territory might look like for your sales professionals. It’s not just about drawing lines on a map - it’s about aligning the right resources with the right opportunities to maximize revenue, enhance team productivity, and deliver exceptional customer experiences.
Effective sales territory planning ensures your sales team spends their time where it matters most, focusing on high-potential areas and avoiding wasted effort in overlapping or underserved regions. For sales leaders, this process can be a game-changer, enabling better decision-making and fostering a more equitable distribution of workloads across the team. If done well, your sales team will spend less time worrying and complaining, and more time performing and delivering on the number.
How Sales Territory Planning Can Make a Difference
Sales territory planning is really important, there is no other way of saying it. It can and should make a difference. A sales manager with a well-constructed territory plan will always outcompete a sales manager with a poor territory plan. Similarly, a sales rep working in a well-structured, right-size, right-fit territory will always perform better than one in a less well-thought-through sector. Good territory planning should mean:
1. Aligning Resources with Opportunities
Sales resources are finite, but market opportunities can be vast. Strategic territory planning ensures that your sales reps focus their time and energy on the most lucrative prospects and regions. By identifying high-value accounts and underserved areas, you can prioritize opportunities that maximize revenue potential while avoiding wasted effort on low-return activities.
2. Reducing Overlap and Conflict
Without clear territory boundaries, sales reps may compete for the same accounts, creating unnecessary tension and inefficiencies. Properly defined territories eliminate overlap, foster collaboration, and clarify accountability. This ensures every rep knows their responsibilities and can focus on building relationships within their designated region.
3. Improving Customer Experience
When territories are designed with customers in mind, sales teams can deliver a more personalized and responsive experience. Reps become deeply familiar with their assigned region, enabling them to understand customer needs, preferences, and pain points more effectively.
4. Boosting Revenue and Efficiency
Balanced territories ensure that no single rep is overburdened or underutilized. Reps with too many accounts may struggle to provide adequate attention, while those with too few may fail to reach their full potential. A well-planned territory structure optimizes workloads, allowing your team to close more deals with less friction.
Sales Territory Research - The Basics
The most important part of the process is putting in the research at the very start. It is really important to look at statistical data to gain an understanding of the overall territory and how it might be broken down into smaller segments.
The Viewpoint Analysis team works with several sales leaders in the tech industry to provide research on their sales territories, and therefore we know the key aspects that need to be looked at. Our Territory Research Service is focused on various territory aspects. These include:
Sector Statistics
The core piece of research relates to the sector and its vital statistics. What we are looking for here is things like the size, value, number of accounts, etc.
Account Structures
How many companies are in the sector and how do they divide across the SMB, Mid-market, and large enterprises?
Key Accounts
What are the most important potential customers in the sector? For these, we might also want to look at Account Research - ensuring we know them upside down and back to front, and who we need to communicate with.
Themes
What issues or interesting aspects are impacting the sector today? Have we done the research? Do we know if this is a growth market or if some of the areas are struggling? What challenges are these companies facing - and specifically, what challenges are our ICPs facing in those companies?
Customers
How many existing customers are in this territory? How much do they currently spend with us and is there an opportunity to grow the account? What percentage of the total wallet share do we have?
Competitors
Who do we know is active in the sector? Have we looked at the number of competitors and their strengths? Competitor research is often overlooked but it is crucial to having a fair chance of success.
Common Mistakes to Avoid in Territory Planning
Here are a few areas that might cause more problems than you expect:
1. Ignoring Data or Relying Solely on Intuition
Relying on gut feelings or anecdotal evidence can lead to poorly defined territories. Data-driven planning is essential for understanding customer behaviour, market potential, and past performance.
2. Overloading Territories
Assigning too many accounts or too large a region to a single rep can overwhelm them, reducing productivity and customer satisfaction. They will be really pleased to begin with - but the reality of getting across the territory will soon catch-up with them.
3. Leaving Territories Underserved
Conversely, creating territories with too few accounts or opportunities can leave resources underutilized, which wastes potential. All to often we see sales reps on too few accounts - something that the bigger vendors tend to do more than the smaller vendors.
4. Failing to Involve Sales Reps in the Planning Process
Sales leaders often make planning decisions without consulting the sales reps who work directly in the field. This can result in poorly informed plans and disengaged team members. Of course, you can't believe everything you hear, but most sales reps will give an honest opinion. Pay close attention to any longstanding relationships that they may have with key customers.
5. Neglecting to Reassess and Adjust Territories
Markets change over time due to shifts in customer demand, competitor activity, or economic conditions. Failing to revisit and adapt territories can lead to stagnation.
6. Overcomplicating Territory Boundaries
Complicated boundaries can create confusion among sales reps and inefficiencies in execution. We see this a lot with big cities or metro areas - with intricate boundaries that make sense statistically but are useless in reality.
7. Underestimating the Importance of Technology
Relying on manual processes for planning can lead to errors, inefficiencies, and missed insights. If we have the data - whether that be in CRM or a territory mapping tool, we should use it.
Making a Quick Start in a Territory - Post Territory Planning
A manager can help the salesperson to make a quick start in a new territory by extending the research to them. If we have done the research well, this will be gold for the seller and should be shared with them. It's also a great way to demonstrate that thought has been put into the process and that the territory wasn't just dreamed up!
Our Territory Research Service can be tweaked to fit the sales team's needs, but it can be a great shortcut to making the team much more productive in the new territory and much quicker. The service does this:
We take the top X number of accounts (for example, it might be the top 20 accounts by revenue), and we do a super-quick piece of research looking at the top 20 contacts in those accounts. In this example, the team quickly has 400 key contacts to go after.
For the most critical accounts (maybe the top 5), we conduct deep account research on them, meaning the sales rep doesn't need to. We spend 2 days on each account and prepare an extensive report showing every key decision maker, what they care about, what the company strategy looks like, what technology they have right now...and much more. It's a massive win for the extended sales team - meaning the marketing team can now make progress to target the right contact with the right messages, and the sales leader can share the report with all key sales team members.
We also look at the sector trends and news - making sure the team know what's lurking on the other side of the fence. Are some accounts in trouble? Are some making great progress? Is there specific terminology we should be using - and some that will be a big turn-off?
Providing this type of information will make the reps advance quicker - either to build a lot more funnel in a shorter period or qualify which accounts deserve the very best attention.