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9 Key Benefits of Territory Management

Sales leaders are often asked to improve performance and increase sales without extra resources. Many times, they even have to grab more deals while chopping their budget and reducing headcount. So how do best-of-breed managers sell more with fewer resources? The answer lies within the benefits of territory management and a carefully crafted territory management plan.

benefits of territory managementTerritory management is a set of business processes and software solutions, which leverages the right mix of roles, skills, accounts, and territories. These are often based on geography, sales potential, performance history, or a combination of these items. Territory management allocates and balances sales responsibilities across the entire organization. Its ultimate goal is to control costs, target the right customers, and maximize sales performance.

Territories should be contiguous, compact, and reflect the sales organization’s overall goals. The benefits of territory management are all inter-related:

You secure the highest opportunity potential and account coverage.

A well-implemented territory management solution helps your reps achieve maximum selling momentum. Studies by Gartner, CSO Insights, and other analysts continue to show that sales productivity is declining at an alarming rate. Most sales reps spend only a third of their time on actual selling. They waste many working hours on the road, traveling to clients and prospects. Sometimes, reps are not working at full capacity because they don’t have any more prospects to visit. Don’t add obstacles in their race towards new deals.

You create workload balance.

Workload is defined as the effort required to adequately manage all accounts in a given territory. When territories are relatively equal with regard to workload and potential, then every sales person is working at full capacity.

You can onboard new reps efficiently, accelerating time to full productivity.

Time is a salesperson’s most valuable asset, even when they have just joined the company. Territory management helps sales managers efficiently allocate territories for new reps so they can achieve maximum selling momentum soon after their onboarding.

You get useful data to accurately measure how your sales force is performing.

Territory management data helps you evaluate sales performance more accurately. When territories have a relatively equal workload-to-potential ratio, sales performance can be better compared across the sales force. This helps you design better sales compensation plans that drive sales.

You get better customer service and, consequently, a larger customer base.

When salespeople are assigned responsibility for the right set of accounts, customers and prospects receive adequate service. In the end, efficient territory management leads to better customer satisfaction and a larger customer base.

Sales forces are dynamic. As your business acquires new customers, or customers change their purchasing behaviors, you should redesign territory coverage models. Companies often do this on a monthly or quarterly basis.

You enable complex sales structures.

It’s a rough ride for large sales organizations with complex sales structures. Efficient territory management helps increase sales even within complex organizational structures. It also gives insights to make informed decisions when changing sales structure.

Read our tips on redesigning your sales organizational structure! 

You maintain coverage through market changes and rep turnover.

benefits of territory managementAny time territories are realigned because of market changes or turnover, there will be some disruption to customer relations. A smooth territory management solution will keep you agile while maintaining adequate coverage. You should always be able to adapt to changes such as mergers, acquisitions, alliances, relocation of offices, product launches, rep turnover, etc.

You can plan for new markets and grow the business.

Once you have a good account and territory alignment structure, you can use territory management data to plan for new markets. Territory analytics also help you take informed decisions when selling new products. By deploying sales forces where the opportunity is greatest, efficient territory management helps you grow the business.

You boost sales team morale and increase cohesion. 

Optimum distribution of workload is critical because it not only maintains internal equity but also promotes fair assessment of individual sales performance. With balanced workload, you will decrease the number of disputes and other counterproductive behaviors.

In search of these benefits, sales organizations approach territory management through either internal or external solutions. Only a handful of companies still tracks territory account alignments with internal solutions, through spreadsheets and in-house software tools.

These solutions can be challenging to use and integrate properly, and are often inflexible to change. This is why many large organizations opt for dedicated software and managed services delivered by sales operations experts. These professionals help organizations design the best territory management strategies, customized for their industries and business processes.

Whether your sales force sells million-dollar products or $50 widgets, sales territory management is the foundation for a well-run and efficient sales structure. Proper territory alignment is the first part of the territory management equation. As your organization grows, the territory management plan needs to adapt and grow as well.

Read more about the cost of territory imbalance.

In the meantime, let us know if you agree with these benefits.  Did we miss any benefits that your company sees from territory management? Feel free to answer in the comment section below.

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