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Sales Territory Management: How to break into a new territory

Sales Territory Management
What is sales territory management?
Benefits of sales territory management
How to build an effective sales territory management plan
How to manage a sales territory on an ongoing basis
Final thoughts

Selling in a brand new sales territory can be intimidating. From researching a new market and understanding regulations to hiring a new sales team, it’s hard to know where to start and what to prioritize when it comes to sales territory management.

New sales territories can turn into huge sales engines and revenue generators, but to reach that point, you need to work from a plan. This will allow you to test the waters and expand your team as needed.

In this guide, we share the benefits of sales territory management, the five steps to breaking into a new sales territory and how to build a sales territory management plan that will allow you to take advantage of sales opportunities, save time and increase sales productivity.

What is sales territory management?

A sales territory is a geographical area assigned to a sales team or a specific salesperson.

It consists of existing and potential customers and allows your sales reps to focus on a single market.

Common types of sales territories include cities, regions and countries.

Sales territories can (less often) be based on criteria other than geography, including company size, industry, demographics or any segments you define.

Sales territory management is the process of setting up your territories and assigning your sales teams and/or reps to them in the most efficient way. It minimizes distractions that come with constant switching between geographies.

Sales territory management entails:

  • Executing a sales territory mapping process. This involves segmenting an area according to demographic data and mapping out the most efficient routes to reach potential clients in that particular territory.

  • Giving out sales rep territory assignments. You’ll need to evaluate your current team members and assign a particular sales representative to an area depending on their skill set and experience.

Sales territory management helps your reps use their skills, expertise and resources to focus on the most valuable leads, prospects and customers.

Benefits of sales territory management

Sales territory planning and management are crucial for any company that sells into multiple geographic locations. Here’s why.

Cover target markets strategically

Cities, regions and countries can be dramatically different in the way people and companies explore and buy solutions for their needs and pain points. Lifestyle, income and the number of available options are just a few of the factors that influence buying.

If you don’t acknowledge each region is different, you’ll miss the chance to optimize results by tweaking and customizing your approach.

Sales territories will vary in:

  • Average deal size

  • Average sales cycle length

  • Number of touchpoints across the sales pipeline

  • Keywords and phrases people use to describe their needs and challenges, not to mention the needs and challenges themselves

  • Travel time, as in how long it takes for a field sales rep to get across a sales territory – some sales territories may be within a few square miles but others may stretch across several hundred miles

Sales territory management allows you to plan for these differences and assign best-suited reps for each territory. It also helps you adjust the size of your sales force across different territories so no team is ever underserved or overserved.

Maximize each rep’s time

According to our State of Sales Report 2020-2021, after selling, sales reps spend most of their time prospecting and qualifying leads. If they’re doing this for a range of territories, and especially different time zones, their focus and impact suffers.

With sales territory management, you can make sure sales reps don’t need to jump between vastly different types of conversations and sales objections.

Your reps will be able to double down on leads they know best, which will support them in hitting their quota and boost team morale.

Additionally, focusing on a specific territory allows your new reps to understand the customer base and identify specific customer needs, making it easier to reach sales goals in less time.

Access powerful performance tracking and forecasting

Instead of only looking at the big picture of your past performance, sales territories help you dive into specific segments to understand:

  • Types of sales strategies and techniques that worked well so you can double down on them

  • Activities that didn’t move the needle and need to be reevaluated and either improved or removed

  • Peaks and dips in sales during different seasons

You can use this data for more accurate sales forecasting, as well as to hire the best sales reps for a specific territory and in a timely manner.

Deepen customer relationships

In-depth knowledge about a territory means your reps can customize their communication with new leads and current customers in that territory.

Reps in charge of specific territories will help you build a strong local presence and lasting customer relationships, no matter your company size.

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How to build an effective sales territory management plan

Breaking into a new sales territory can be intimidating. With the five steps below, you’ll simplify the process and focus on getting a sales territory plan off the ground.

Step 1: Define the sales territory

Start by defining what this new sales territory means for your company.

Is it a new city or county? A large part of a country? An entirely new country? A territory on a continent you don’t have a presence on yet?

For example, a real estate agent might be currently serving one large city and want to break into two nearby cities. On another hand, a tech company with a significant presence in North America could aim to build a strong presence in Europe.

The scope of the territory is completely up to you; one size doesn’t fit all.

Once you identify the sales territory you want to break into, roll up your sleeves to research and define these specifics:

  • Ideal prospect. This might be identical to your current customer profile, but factors like language, culture, lifestyle and economy in the new territory might mean a different ideal prospect.

  • Total addressable market (TAM). TAM includes all the prospects and customers that fit your ideal customer description; make sure there are enough prospects in this new area so you can estimate your potential market share and revenue opportunity.

  • Serviceable addressable market (SAM). SAM is the portion of the market you’re able to service based on your business model, your targets, geographical reach and specialization.

  • Serviceable obtainable market (SOM). SOM is the realistic fraction of your serviceable addressable market you can capture (it takes into account competitors you’re up against).

  • Competition. Companies already marketing to and serving your ideal prospects.

  • Territory quality. If any of your current or past customers happen to already be in the sales territory you’re breaking into, analyze their buying cycles, sales conversations, type of products, pricing and other details to learn what worked well in that territory.

Consider investing in an interactive sales territory mapping software to assist in route planning. A mapping solution goes beyond Google Maps and leverages geographic data and other variables to help you create sales routes that reduce drive times.

Step 2: Create a sales plan

Next, you need a plan of attack. A sales plan is the strategy your team will follow to fill their sales pipeline with enough leads to hit revenue targets.

Without a plan, you might waste time and budget. A strategic plan will help you maximize the impact of every rep and resource you have, and allow you to tweak your approach early if you notice the need for it.

Your sales plan for the new sales territory should contain:

Revenue goals

Start with revenue goals for the new sales territory. Since you don’t have past sales data from it, start lower than you would in a sales territory you already cover; you can always increase your goal later.

Work backward from your revenue goal to reverse-engineer sales quotas and necessary sales activities.

Activity-based selling goals

Activity-based selling is the approach to selling that focuses on the sales rep’s input, rather than the outcome. The goal doesn’t focus on the result, but on the process that leads to results.

Your sales territory plan should outline the number of:

  • Prospects a rep needs to start a conversation with

  • Proposals that need to be sent

  • Follow-up calls and meetings that need to happen

Use each rep’s past sales pipeline data to find a ballpark for these numbers.

For example, to close 10 deals in a month with a close ratio of 10%, the rep needs to send proposals to 100 qualified leads. If that rep turns 25% of all leads into qualified leads, you now know they need 400 leads in their pipeline every month to hit their goal.

From here, divide these numbers into daily and weekly activities.

By focusing on the number of leads that enter the pipeline, not the revenue goal, you can keep your reps motivated and focused with an achievable goal.

Supporting resources

To help your reps organize their sales activities, build a library of resources that will allow them to streamline and simplify their sales activities.

Use this list as a starting point and involve your sales reps in the process:

  • Summarize the ideal prospect. Build a document that lists all the parameters of an ideal prospect and allow your reps to build upon it as they learn more about the new sales territory.

  • Establish a prospecting process. Use sales call planning to develop questions and checklists for researching and reaching out to the prospects, whether via phone calls, cold email outreach, social media outreach or another means of contact.

Write templates.Cold calling scripts and cold email templates can save your reps substantial time when contacting new potential leads.

Step 3: Get to know the rules and regulations

Before you start searching for and contacting prospects in your new sales territory, research the legal side of selling in that city or country.

GDPR showed just how dramatically a law can impact the way we market and sell when it went into effect in 2018. If you’re expanding your business into EU countries, GDPR compliance should be your first order of business.

However, that’s not all you should take into account. Each new territory may have regulations around hiring, data protection, contracts with customers, consumer rights and more.

For example, Brexit has impacted the rules and regulations for EU businesses selling to the UK and UK businesses selling to the EU.

Here’s a list of topics you can begin your legal research with:

  • Rules around invoicing and payment accounts

  • Your obligations to the customer as a service or product provider

  • Required customer communication formats and notices

  • Consumer cancellation and refund rights

  • Warranty policies

  • Legal setup for your company and all applicable taxes

  • Hiring regulations and labor rights

It’s worth noting that highly regulated industries, like medical and pharmaceutical sales, require an even deeper dive into legal requirements.

Having this knowledge will allow you to equip your sales reps and make them confident and comfortable operating in a new sales territory.

Step 4: Assign sales reps to your new sales territory

Once you have a plan in place with resources for sales reps and a legal setup to support it, your next step is to assign each sales rep a territory.

Tempted to jump into hiring new sales reps for this new territory?

Consider this: Your current sales reps have already been in the trenches with prospects, leads and customers. They know what makes them tick. They know the industry and the exact words and phrases people use to describe their pain points, needs and challenges. They also know your sales process, your business goals and your product or service in-depth.

In other words, your existing sales reps have a head start, so start with them.

This is what makes inside sales (or remote sales) so useful. Instead of taking a massive risk by opening a new office location and hiring an entire team, test the waters with top performers who already excel at selling your offering.

Naturally, this means you’ll need to reduce their workload in the sales territory they already cover. The activity-based approach to selling should make this process easy.

Consider each rep’s skills, strengths, experience, interests and work styles.

Some reps might be great at high-volume cold calling, while others excel during the negotiation stage.

Some need the thrill of a full sales calendar and like to move fast, but others take their time, dive deeper into research and take longer in the closing stage, which helps them win larger deals.

Collaborate with your reps to determine the sales territory that will give them a unique advantage.

Step 5: Hire a sales team for your new sales territory

When you’re ready to go all-in with your new sales territory, consider hiring a dedicated sales team to look after it.

A word of warning: A sales talent study found that it takes sales reps an entire year to reach full productivity. Make sure you manage your expectations as you go through this process.

Focus on hiring the right regional sales manager and your initial sales development representatives. With time, consider other types of sales jobs to add to the team.

Use this list as a guideline when hiring salespeople:

  • Build a hiring profile. This includes qualities, ideal skills, background and experience for each role.

  • Develop questions and techniques. Adapt your sales interview questions to the role and seniority level you’re hiring for.

  • Write a clear, attractive job description. Include key responsibilities, your offering, earning potential and the company’s culture and vision.

  • Build an appealing recruitment process. Make it easy for your target hires to find your open roles and tap into your own network.

Finally, focus on your onboarding and retention strategy. Support every new hire in their journey with you.

This will help them thrive in your sales organization, deliver strong results and stay with you for a long time – a win for everyone involved.

How to manage a sales territory on an ongoing basis

Once your new sales territory is up and running, and as you add more sales territories over time, you need a sales territory management plan. This plan will make each sales territory a consistent sales engine for your company. Here are a few processes and tools to include in your plan:

Review sales and account data regularly

Measure the impact your sales team has in the new sales territory. Analyze sales results, metrics and account data including:

  • Total revenue

  • Number of new customers

  • Number of repeat customers

  • Number of referrals

  • Average conversion rates

  • Average transaction value

  • Account value

This will allow you to compare your results against the goals you initially set for this territory. You’ll also have the foundation for sales forecasting and planning.

Review this data on a monthly, quarterly and yearly basis to identify busier and calmer seasons of the year and prepare your team for them.

Review your sales team and identify hiring opportunities

Conduct regular sales meetings with your reps and go over their:

  • Average deal size and value of the deals in their pipeline

  • Close ratio (average percentage of deals won)

  • Sales velocity (average time it takes to win a deal)

  • Typical workload and whether they felt they had too much or too little to do

  • Individual notes and observations about serving a new sales territory

Use these insights to learn if you’d benefit from reassigning some territories and accounts between reps, as well as if you could scale your presence in this territory by adding more members to your team.

If your reps often have more leads they can handle, that’s a solid sign your team should expand.

Use a sales territory management tool stack

Sales territory management tools make data visualization easy and allow your team to collaborate and analyze various datasets for more effective territory management.

Implement a powerful stack of apps and tools to help your reps focus and work efficiently. These cloud-based tools are particularly valuable to teams that work and collaborate remotely, which is common when breaking into new, distant territories.

1. CRM

A CRM tool like Pipedrive will keep all sales data in one place, including deals and contacts, notes, files, emails, calls, reminders and a calendar.

It removes the need for notebooks, sticky notes and spreadsheets and keeps the whole team organized, which is particularly important when entering a new and less-known sales territory.

Here’s how a CRM benefits sales territory management:

  • Automated lead allocation based on which rep looks after the territory the lead came from

  • Mobile app for reps on the road with easy-to-add notes, call logs and nearby reminders

  • Clear ownership of deals so sales reps never overlap their activities with the same lead or territory

2. Territory visualization tool

Use a tool that helps you visualize your sales territory, divide it between your sales reps, and understand how each part of the territory performs.

An example of a sales territory mapping tool is WeMapSales, a tool that uses CRM data to visualize real-time sales performance on maps. It’s accessible on desktop and mobile, so it’s easy to use both for inside and outside sales reps.

It also allows you to:

  • Select and filter specific geographies to create custom reports

  • Make decisions on the go thanks to real-time analytics

  • Restructure your sales territories and reassign reps based on trends and past performance

  • Visualize sales performance, opportunities and data on maps and charts

A powerful territory visualization tool will help you adapt your sales territory plan to your growth as you scale.

3. Automation tools

Automate any manual, repetitive tasks to free your sales teams up for more impactful work and one-on-one conversations with leads and customers.

Use this list of automation tools as a starting point and expand based on your needs:

  • Campaigns by Pipedrive. A full email automation suite you can integrate with your eCommerce and other systems, A/B test your emails and more.

  • LeadBooster. This Pipedrive add-on is a complete xf toolset that lets you find outbound leads, automatically engage website visitors through a chatbot and collect valuable information through web forms.

  • Zapier. Set up automated workflows that connect your external data with your CRM, including calendar meetings, survey responses, leads from Facebook ads and more.

  • Workflow Automation. Available to users of Pipedrive’s Advanced plan and above, this feature enables you to automate repetitive tasks by setting up triggers when certain activities are completed or changes take place in your CRM.

Get sales territories to collaborate for maximum results

Each territory-specific sales team has its own advantage: they’re exposed to a unique context in the city, region or country they’re covering.

This means they might get a specific insight before sales teams from other territories do. If you foster sales territory alignment, you can increase their chance for a head start based on what another territory learned.

Here are some examples of useful insights and learnings:

  • A specific type of prospect that converts at a higher rate or tends to spend more

  • A new way leads describe their pain points or needs

  • Recent activities from a local competitor

  • A template or script that performs significantly better than others

Thanks to the collaboration between sales territories, you can regularly update your ideal prospect definition, goals and supporting resources. This will give you a competitive advantage across territories and help you maximize sales results.

Final thoughts

Since new territories can be as small as a new neighborhood and as large as a country on a different continent, the amount of time it takes you to find your footing will vary.

Take your time to define and research your new territory, build a sales territory plan, and start with your experienced sales reps to kick off your sales activities in a new territory. From there, you’ll have the foundation to grow by hiring reps who know the territory well and expand your team to reach even more prospects and close more sales.

With the right processes, people and tools, you’ll be on track to hit huge growth milestones and serve more customers than you ever imagined.

Download your guide to managing teams and scaling sales

The blueprint you need to find a team of superstars and build a strong foundation for lasting sales success

Driving business growth