What is Sales Territory Management? 12 Ways to Improve It

What is sales territory management & why does it matter?

Sales territories are important for businesses that cater to different types of customers spread across multiple regions. They categorize prospects into territories based on similar characteristics, such as:

• Geography

• Business type

• Revenue size

• Pain points

Referred to as territory management, this sales practice is an effective way for sales managers to help sales reps focus and prioritize new leads assigned to them. Organizing sales teams by territory also helps identify profitable territories, sales reps who are meeting the targets, and potential sales areas to improve.

However, aligning the right territories with the right reps is complex without an automated system in place. 

For instance, a sales management system, such as Integrated CRM software solutions, comes with territory management capabilities to define your sales territories.

With a sales CRM like Freshsales CRM, you can create a systematic sales territory management plan to organize your team. You can also auto-assign leads round-robin, create a territory hierarchy to manage sales teams, assign phone numbers to territories, transfer calls to territories, limit territory access to particular teams, and more.

Key components of territory management

While no two companies have the same territory management plan, there are some key components universally accepted as part of territory management. In the following sections, we’ll list several skills and actions that should be a part of any territory management plan.

Goal-setting

Setting goals is important for any business— but this rings especially true when designing and implementing sales territories. Never enter into this process without a plan in place. 

Focus on using hard data to plan specific goals that can help you become more profitable. Make sure to set milestones that are realistic and attainable.

For instance … 

“According to our data insights, we need to increase New Jersey Territory sales reps by 25% to hit our profitability goal. On average, each sales rep brings in 10 executive-level sales per week. With a 25% increase in sales reps, we’ll exceed Q2’s profitability goal in just 30 days.”

Market analysis

Before setting up your territories and assigning them to sales teams, dig deeper into your industry and target market. This ultimately boils down to demographic or firmographic research.

Who are you trying to reach? Who are your ideal customers? 

Highlighting this information, along with data on the geographic location you serve can help create a solid territory management system for your sales team. 

*Pro-Tip: Go the extra mile by creating target buyer personas for each audience segment your company targets. Build these personas into your sales reps’ pitches and sales decks for easy reference.

Sales territory mapping

When it's time to create your territory, you'll need to conduct territory mapping sessions. This is where you carve out realistic, profitable territories that can serve your company’s greater good. 

When choosing these, look for ample opportunities for sales teams to succeed. The importance of sales territory mapping boils down to creating territories that have enough opportunities for success. 

For example, a territory that's too small may not provide enough opportunities to hit profitable sales quotas. However, a larger area without a valid target audience population can also lead to failure. 

Prioritizing valuable territories

Sales management needs to prioritize territories based on their values. For example, consider assigning your strongest sales team to a sales territory with high-value prospective opportunities.

Sales performance analysis

Another key component of a successful sales territory management system is quality sales analytics.  It’s important to periodically analyze sales data and check on the teams’ progress in their respective territories. This gives you a golden opportunity to see what's working, and what isn't, and how you can make changes to get the best results.

What are the benefits of effective sales territory management?

At this point, you might be asking yourself whether you need sales territory management to be successful. In the following sections, we’ll point out the various benefits your company can see by embracing this profitable concept.

Improved efficiency for the sales team

In the sales world, focus and guidance can lead to enhanced efficiency. Establishing and managing data-driven sales territories can sharpen the entire team's focus. 

This can also unite them under uniform goals. Managers can also oversee teams more easily for effective coaching.

Get a better understanding of customers

Trying to understand a target audience on a broad scale (encompassing an entire state, country, or even the entire planet for larger enterprises) can be extremely difficult at best — and impossible at worst.

When you break your audience down into manageable territories, it's easier to gather and analyze data on customer needs, buying habits, and preferences. 

You can then examine each territory to find area-specific trends that can inform future marketing — and common trends that apply to the entire audience.

Enhanced ‌customer experience

With a better understanding of customers, you'll be able to make vast improvements to the ever-important customer experience. 

Breaking your service areas down into territories allows you to more accurately gauge those valuable customer behaviors. 

This means you can make improvements based on what customers want to see. The result is a far more effective sales and marketing plan backed by hard data. 

In other words, you’ll have more insights to personalize important customer touch points along the buyer’s journey.

Strengthen relationships with customers

With a dedicated sales team focusing on a very specific mapped-out area, customers get to know your sales representatives very well.

That means customers form strong bonds or relationships with the sales team, built on familiarity. 

This ultimately leads to more customer loyalty and profitable retention.

Prevent issues with the sales team

Without well-defined sales territories, issues can arise between your various sales representatives and teams. When one sales rep moves in on an opportunity that's a little too close to another rep’s usual stomping grounds, bad blood or issues can form. This can disrupt the business’s peace and productivity.

With defined territories, everyone knows what they’re responsible for — and which prospects exist outside of their sales areas. This keeps reps focused and prevents unnecessary disagreements. 

Positive camaraderie also fosters a more positive company culture.

12 ways to improve your sales territory management

Now that we’ve covered what sales territory management is (and how it can positively impact your company's bottom line) let's explore 12 ways you can improve sales territory management within your organization.

1. Understand your customers

The first step to solid sales territory management is conducting customer demographic research. Or firmographic research if you have a B2B business. That means breaking down several common factors your target customers share.

For instance, in a B2C business, key information might include:

• Geographic area

• Income

• Marital status

• Occupation

• Salary range

• Communication preferences

• Preferred social media channels 

In a B2B business, data might include:

• Business type

• Business size

• Annual revenue

• Number of employees

• Common pain points

• Outreach preferences

• Top competitors 

Segment your customers by common characteristics to better tailor your sales processes to each unique group.

2. Set SMART goals

Next comes the goal-setting piece of a territory management system. These goals are the benchmark for how you measure success in this sales venture.

Your goals need to be SMART. That isn't a reference to intelligence. Rather, it's an acronym that stands for:

• Specific 

• Measurable

• Achievable

• Relevant 

• Time-bound

When creating a SMART goal, it's best to be very specific about what you're hoping to accomplish. This goal should also correlate with an easily measured metric.

For instance, the number of new subscribers to reach in a given period is a great example of a specific and measurable goal.

It should also be something you could feasibly achieve. While it’d be nice to see a 500% rise in revenue during the third quarter, that's not achievable for most businesses. 

The goal should also be relevant to your business and ultimately lead to conversions and profitability.

Finally, make sure that you set a specific time frame around your goal. This gives you and your sales teams a finish line to head toward. 

3. Build the right team

To achieve the best success, you need the best teams in place — this means developing a set of criteria that paint the perfect picture of an ideal sales team member.

For instance, you might include factors, such as:

• Experience level

• Industry-specific knowledge 

• niche expertise

• Language and communication skill 

• Realistic salary expectations 

Approach hiring sales personnel like a coach scouting for players on a Major League team. You want superstars who will show up for the big game and get results.

4. Make sure territories are well-defined

When setting out your territories, leave no room for confusion — your maps should be very clear with defined boundaries. 

This lets everyone know where their jurisdiction begins and ends. It can also prevent sales reps from crossing into one another's territory.  

5. Train the team

Establish a training regimen for your sales teams to make sure that all teams work from the same playbook.

The training system you develop needs to rely on data you gather from market research and audience demographic (or firmographic) trends and behaviors. 

*Pro-Tip: Don’t forget to train sales reps to identify and present solutions to pain points. Take this tip up a notch by showing reps how to vary their communication styles to speak to core customer types in their territories. 

6. Assign territories based on merit

When it comes to sales territories, it's important to feed the strong — don't worry about evenly distributing all territories. 

When you have more valuable territories with a lot of solid opportunities, put your best people on the job.

As specific sales representatives succeed or fail, make adjustments where needed. 

Keep your strongest sales personnel in the most profitable areas. Not only does this give you better results, but it also motivates other sales representatives to improve.

7. Optimize routes

If your sales teams take specific routes when moving through their territories, make sure to optimize them.  This is especially important if sales reps use company vehicles — or if they get reimbursed for travel expenses. Choose the shortest distance between each point that allows for the lowest travel expenses with the most sales opportunities.

8. Take notes

Make sure sales teams take detailed notes on all customer interactions in their territories. 

These notes should all be in the CRM and connected to customer profiles. Examining these behaviors can help with predictive forecasting for future marketing.

9. Delegate

Sales managers need to delegate, especially when they're dealing with many sales territories. 

Make sure there’s a hierarchy of sales management with clearly defined roles and responsibilities. You can't put too much on one person and expect them to succeed.

10. Monitor performance

As we mentioned earlier, it's important to track your sales performance over time in each territory. 

To get to where you want to go, you first need to understand where you are. Keeping a close eye on sales performance is the first step to ongoing territory optimization.

11. Make changes when necessary

If your analysis shows certain inconsistencies or weaknesses in your sales teams or territories, you must be willing to make adjustments as needed. Don’t simply stay the course on a system that's not working for you. Determine what the problem is and take steps to fix it.

12. Use a sales territory management system

Thankfully, territory management is easier than it ever was before. That’s thanks to the functionality of territory management systems like Freshsales CRM.

With these smart systems, you can automate lead assignments based on territories, track progress, generate real-time analytic reports, and hold everyone accountable to their sales goals within a territory.

And speaking of territory management systems …

Essential features of a sales territory management system

There are many territory management systems out there. If you want to find the best of the best, it's important to understand what essential features to look for. 

In the sections below, we’ll take a look at several features that any quality sales territory management system should include for maximum user results.

Define territory rule & automate lead assignment

Based on your organization and sales plan, you may want to segment the leads in your CRM software into new territories based on geography, size, zip codes — or other relevant data. 

For instance, in Freshsales CRM, you can create any number of territories and define each by combining any number of rules to segment your leads. You can also pick multiple lead field values for each rule to set up your criteria, and assign leads to the territory. 

If you have salespeople working in different regions and want to limit their access to outside records, simply specify the users you want to allow access to leads in a territory. In that way, only those users will have permission to manage territory records. 

Add users you want to assign leads to, and Freshsales CRM can start assigning leads round-robin.

Assign phone numbers to territories and transfer calls

Having a built-in phone in your CRM software is an easy and fast way for sales reps to get in contact with leads. 

With the Freshsales CRM phone, you can purchase local and toll-free numbers for any country and state. It’s then easy to assign them to sales reps and territories. 

Additionally, if a lead calls in to the wrong branch, a sales rep can quickly transfer the customer to the correct territory. This happens directly from the CRM without dropping the call. Learn more about Freshsales’ built-in phone.

Allocate responsibilities

Your software should be able to assign and understand the responsibilities of different team members. 

This makes it easier to forward leads whenever they come in. 

Build territory hierarchy

Territory Hierarchy provides a clear structure for sales teams to tailor their efforts and resources. This structure allows businesses to optimize efforts and get insights into performance across regions or segments.

Territory-wide sales reports

Pull out revenue metrics from your Freshsales CRM database by territory, sales reps, and more.

Pinpoint the territories that are meeting targets. You can also identify key potential regions and star performers in your team.

Role-based access

Set roles to define what actions your sales reps can take in a territory. This includes whether they can add, edit, and delete records, along with what they can see in Freshsales CRM.

No one should have too much or too little access. Additionally, when you remove someone from the sales team, it's important that their access is immediately revoked.

Conclusion

Sales territories can keep businesses like yours efficient and organized. 

By focusing on smaller well-defined areas, sales teams and sales representatives can have an easier time developing customer relationships. They can also work on gathering information on prospective customers, defining their roles, and closing sales.

But to create sales territories with the highest level of efficiency, you need sales quality territory management.

Freshsales CRM is a powerful sales CRM with territory management features. It can automate the lead assignment process, manage territory based teams and keep everything within the boundaries of each territory.

Click here for more information on Freshsales CRM.