Sales Territory Planning Made Easy (Software & Examples)

User AvatarShawn Jolley

In the world of sales, success is all about identifying and seizing opportunities.

But how do you do that when your sales team is chasing after anything that looks like a sale with no set strategy?

That’s where sales territory planning comes in.

We’re going to make it easy for you with:

  • A guide to creating an effective sales territory plan
  • Some examples and software to make the process a breeze

So, let’s dive in and make sales territory planning work for you.

A Guide to Sales Territory Planning

What is Sales Territory Planning?

Sales territory planning is the process of dividing a geographic area into smaller, more manageable regions to efficiently sell and distribute a company’s products or services.

It involves identifying and evaluating the market potential of different regions, analyzing sales data, and assigning sales quotas to sales representatives for each territory.

By creating a well-planned sales territory, businesses can effectively assign resources, increase productivity, and ultimately drive revenue growth, to work smarter, not harder.

Why Sales Territory Planning is Important

The success of any sales team is largely dependent on effective sales territory planning. Without proper preparation, sales representatives can waste valuable time and resources covering the same areas, missing out on potential opportunities, and not focusing on the right clients.

Optimal sales territory management ensures that sales teams are working effectively, maximizing their potential to generate revenue. It also helps to identify areas for improvement and allocate resources effectively, which leads to better results and a more satisfied sales team.

Ultimately, sales territory planning is important for maintaining a competitive advantage.

Benefits of Effective Sales Territory Planning

There are many reasons to invest time and energy into sales territory planning because the results often speak for themselves. Some of the benefits that come from taking the time to plan include: 

  • Increased sales: A well-planned sales territory can help sales reps focus on the right customers and opportunities, resulting in increased sales and saved time
  • Improved customer relationships: With a clear understanding of which customers they are responsible for, sales reps can build stronger relationships and provide better service
  • Better resource allocation: By dividing sales territories strategically, businesses can ensure that resources such as marketing and sales support are allocated efficiently
  • Higher productivity: Sales reps who are focused on a specific territory tend to be more productive because they can spend more time selling and less time on administrative tasks
  • Enhanced forecasting: With clear visibility into the performance of each sales territory, businesses can more accurately forecast revenue and plan for growth in the right areas

What to Do Before You Make Your Plan

Before diving into sales territory planning, it’s important to do your due diligence to set yourself up for success. Here are a few things to consider before you begin:

Analyze Your Sales Team

Take the time to evaluate your sales team’s strengths and weaknesses. Consider factors like:

  • Individual experience level
  • Unique skills and talents
  • Historical performance

Even a basic team analysis can help you identify areas where everyone excels and areas where they need additional support. From here, you can make better decisions about which territories to send each rep to.

Evaluate Your Products & Services

Once you know where your team stands, it’s essential to understand the value proposition of your products and services before you start mapping out territories.

By assessing the unique benefits of what you’re selling, identifying the pain points of your customers, and understanding which areas differ in customer needs, you’ll be better equipped to target the right market and assign territories accordingly.

When assigning territories, it should always be clear why sales reps would be successful trying to sell a specific product or service in an area before they reach the first door.

Identify Your Target Market

On the flip side of your product or service is the customer or client. Identifying the people who make up your target market is crucial for effective sales territory planning.

At a minimum, you should take a deep dive into your customer:

  • Demographics (age, salary, etc.)
  • Psychographics (behavior, life events, etc.)
  • Locational events (common storm trends, solar demand, etc.)

By knowing who you’re selling to and where they live, you can ensure your sales reps are targeting the right audience before territories are assigned.

Know Your Industry & Competitors

The last bit of prep work you should tackle before getting into the nitty-gritty of territory planning is taking the time to research your industry and competitors.

What’s the lay of the land and how does your team stack up against:

  • Your top 3-5 competitors
  • The industry in general
  • The regional areas you want to target
  • Identify where the highest demand for your product is

Understanding the competitive landscape will help you create more effective territories and set realistic sales goals. You won’t fall into the trap of targeting areas that are too competitive.

6 Steps to Create a Sales Territory Plan

Once you’ve done your research and finished your prep work, you can get started with sales territory planning and management. There are six main steps to creating and assigning areas.

1. Define Your Sales Territories

Start by outlining your sales territory map. Determine the boundaries of each sales territory, possibly separating by region, county, city, or postal code. Ensure that each sales territory has an adequate number of potential customers to meet your sales goals.

This is large-scale geography that will be based on:

  • Where your potential customers live
  • Where your sales reps can work

2. Segment Your Sales Territories

Once you’ve defined your sales territories, segment them based on customer-specific factors.

You can divide a territory based on several things, including:

  • Neighborhood/route size
  • Customer demographics
  • Potential sales and revenue
  • New and past customers

This will help you allocate resources effectively and ensure that your sales team is targeting the right customers within your sales territories. You can also use this step as an opportunity to make sure each one of your territory segments has plenty of opportunities for each sales rep.

Example Segmentation for Sales Territories

Below, we’ve provided a screenshot from the SalesRabbit app that showcases how individual areas can be segmented and assigned individual scores using known data.

The more information you and your team have, the easier it is to segment areas. As you can see, one of the segments in the screenshot has a buyer score of 6.6 (out of 10) with 1,911 homes. There is additional information reps can use to hit the most promising leads while prospecting.

territory management

3. Determine Sales Goals and Objectives

Set realistic sales goals for each sales territory and determine the specific objectives your sales team needs to achieve to meet those goals.

Objectives may include:

  • Knocking a certain number of doors per day
  • Conducting feedback surveys about the product
  • Scoring leads for return appointments and upsells

Ensure that your sales goals are aligned with your overall business objectives and that the actions your reps can take are possible within their assigned territories.

4. Assign Sales Quotas

Once you’ve determined your sales goals, assign sales quotas to each sales representative to hold them accountable. Make sure that each sales rep has an achievable sales quota that’s aligned with their skills and experience.

If your sales territories are set up properly, quotas should be based on realistic opportunities available in each area for a specific product or service and support the company’s sales goals.

Monitor customer and rep feedback to adjust quotas as necessary to keep motivation and morale as high as possible while also looking out for potential areas for improvement or support.

5. Develop an Action Plan

Develop a comprehensive action plan that outlines daily or weekly steps your sales team needs to take to align with objectives and achieve sales goals.

At a minimum, your action plan must include specific sales tactics and timelines. This way, you can look back on progress at each milestone and evaluate which strategies are most effective.

Each sales rep should know:

  • Their schedule and planned route
  • Their quota and bonus incentives
  • What actions take priority each day
  • What follow-up methods to use

6. Identify Key Performance Indicators (KPIs)

Determine the KPIs you’ll use to measure the success of your sales territory plan.

This could include metrics like:

  • Revenue
  • Customer acquisition
  • Customer retention
  • Sales cycle length

By tracking these KPIs, you can make data-driven decisions to optimize your sales territory plan.

Metrics are also a great addition to the action plan so reps know what to do, when to do it, and how to measure whether their actions are in line with, falling short, or exceeding expectations.

Sales Territory Planning Tips & Tricks

Collaborate with Your Sales Team

When creating a sales territory plan, it’s important to involve your sales team in the process.

Your team has a wealth of knowledge and experience that can help you:

  • Define specific territories
  • Set team goals
  • Identify KPIs

Collaboration also helps keep everyone on the same page and committed to the plan’s success. Without the team, no goals will be hit.

Regularly Review & Update Plans

Creating a sales territory plan is just the first step. To ensure its effectiveness, you need to review and update it regularly. Reviewing it as frequently as once a week may be necessary early on.

This helps you to identify areas that need improvement, make necessary changes, and keep your team aligned with the plan’s goals.

Managing different areas comes down to doubling down on what’s working, stopping what’s not, and changing what could be better.

Incorporate Flexibility into the Plan

While it’s important to have a plan in place, it’s equally important to remain flexible. Your plan should be able to adapt to changes in the market, your products, and your team’s performance, ideally even before your dedicated reviews and updates.

By building in flexibility, your reps can respond quickly to changing conditions and stay ahead of the competition without locking themselves into a plan.

Flexibility for you might look like:

  • Allowing reps to alter their working schedules to better fit the territory’s demographic
  • Accelerating objectives to win more sales in an unusually competitive territory
  • Expanding territories and adjusting rep assignments to balance sales opportunities

Make Adjustments Based on Data & Feedback

Remember, your sales territory plan should be based on data and feedback from your sales team.

Use sales analytics and performance metrics to:

  • Monitor progress
  • Identify areas of weakness
  • Make adjustments accordingly

And be open to feedback from your team so you can adjust the plan as needed to ensure their success. Adding additional flexibility or altering objectives to better align with reality can go a long way to make sure reps feel like they can be successful in any territory.

sales territory planning

Examples of Sales Territory Planning

  • A solar company tracking new move-ins and homeowners in a developing geographical area, assigning sales reps to focus on setting appointments for their closer team.
  • A roofing company using storm and weather data to assign reps to sales territories where roofing damage is likely to have occurred within a set amount of time.
  • A software company segmenting sales territories by industry, with each sales rep responsible for B2B sales within a specific field, such as healthcare or finance.
  • A telecommunications company dividing sales territories by product line, with each sales rep responsible for promoting and selling a specific product, such as internet services or mobile plans.
  • A manufacturing company creating sales territories based on customer size, with each sales rep responsible for selling to customers of a certain revenue range, such as small businesses or enterprise-level organizations.

How to Implement Your Sales Territory Plan

Train Your Sales Team

To ensure the success of your sales territory plan, it is crucial to train and onboard your sales team properly. This includes providing them with a clear understanding of:

  • Plan objectives
  • Sales territories
  • Sales quotas
  • The action plan

Make sure your sales reps have access to all the necessary tools and resources required to carry out their tasks. If they provide feedback that the territories aren’t working out as intended, listen carefully to understand why before coming up with solutions.

Communicate Your Plan & Objectives

Communication is key when it comes to implementing your sales territory plan.

Make sure you are clear in your expectations so your sales team understands how their role fits into the bigger picture. Regularly communicate updates and changes to the plan, and encourage your team to share feedback and ideas.

Listen attentively to how the sales territory plan implementation is going and be ready for objections and challenges.

If you can’t incorporate communicated feedback into your plan in a timely manner, that’s a sign your plan is probably not flexible enough.

Monitor & Track Sales Rep Progress

Monitor and track the progress of your sales reps regularly. This will help you identify any areas that may require additional support, training, or resources.

Ensure that your team understands KPIs and is aware of how performance will be measured.

If you are tracking rep performance but your reps don’t know what you’re tracking or the metrics you care about, then you’ll probably end up with numbers that don’t align with your vision.

In addition to sales metrics, analyzing your sales data can provide valuable insights into the effectiveness of your sales territory plan. Metrics that might impact rep progress include:

  • Customer behavior
  • Market trends
  • Competitor performance

Review & Optimize Your Sales Territory Plan

A sales territory plan is not a set-it-and-forget-it strategy. It requires regular review and optimization to ensure its effectiveness. By analyzing sales data and assessing your team’s performance, you can identify areas for improvement and adjust your plan accordingly.

Don’t be afraid to:

  • Redefine sales territories
  • Update sales goals and objectives
  • Adjust sales quotas

Challenges & Solutions

6 Common Challenges in Sales Territory Planning & How to Overcome Them

1. Lack of data: The absence of accurate and up-to-date data on customer behavior, demographics, and preferences can make it difficult to create effective sales territories.

Solution: Invest in data analytics tools or market research to gather the necessary information.

2. Overlapping territories: Sales reps may claim the same customers or territories, leading to confusion and inefficiencies.

Solution: Clearly define sales territories and establish rules for sales reps to avoid overlap.

3. Changing market conditions: Economic shifts or changes in customer preferences can render a territory sales plan obsolete.

Solution: Review and update the plan regularly to ensure it reflects current market conditions.

4. Inefficient resource allocation: Unevenly distributed sales territories may result in over or underutilization of resources.

Solution: Use data-driven insights to allocate resources effectively and optimize sales territories.

5. Lack of collaboration: Sales territory planning requires collaboration between sales teams and other departments, such as marketing and operations.

Solution: Encourage cross-functional collaboration and open communication on software like Slack to ensure a cohesive and effective plan.

6. Resistance to change: Sales reps may be resistant to changes in their territories or quotas, leading to a lack of motivation and decreased productivity.

Solution: Communicate the rationale behind changes and involve sales reps in the planning process to ensure buy-in and cooperation.

Getting Started with Smart Sales Territory Planning Software

territory sales plan

SalesRabbit is a sales enablement platform designed to make sales territory planning easier. It provides a robust mapping tool that allows you to:

  • Visualize your sales territories
  • Draw them out in seconds
  • Effortlessly assign them
  • Make any necessary changes with ease

(Not to toot our own horn, but basically, we solve all the common problems we talked about earlier that most teams struggle with.)

SalesRabbit also offers lead tracking and management tools to help you keep track of leads, reps, and monitor progress. Plus, it provides analytics that allow you to quickly see how your territories are expected to perform and how they actually perform.

👉 Book a demo with SalesRabbit.

Leave a Reply