Territory Planning for Success

The saying goes that you should hope for the best, and be prepared for the worst. I believe this is especially true in sales and the main reason why YOU HAVE TO DO TERRITORY PLANNING. Most reps hate writing territory plans and I believe the reason they dislike it is because many don’t know or understand what goes into a good territory plan, and how often it should be measured. Secondly, the accountability, execution, and consistent review of the plan rest first with the sales professional and secondly the sales manager. Trust me, if done correctly and executed precisely, your territory plan will become the most invaluable asset you have each day of your career in sales.
WHAT IS A TERRITORY PLAN? A territory plan is a strategy that is written down detailing the actions, tasks, and objectives you must complete to exceed your sales quota. Most territory plans include awards and other personal motivational items. These items include pictures of desired vacations, family vacations, dream cars, houses, lifestyle pursuits, and much more. One of my reps included a picture of a Harley-Davidson with all the extras. It was truly an honor to see him achieve his goal and purchase the bike. So now that you know what a territory plan is, let’s start with the first step.
SEGMENT YOUR TERRITORY: To have a good territory plan you need to analyze your territory – this is where most territory plans fall short. You do this by segmenting your territory into prospects that do not have your products and to customers that do have your products. You should use all resources you have to do this. Your marketing department or CRM are both great sources of information that you can use to collect this data. If the role in your company is pure new business then you would focus on the prospects that do not have your products and vice-versa for sales professionals that support a retention or base business motion. For this post I will focus on new business.
SEGMENT YOUR PROSPECTS (GO DEEPER INTO THE SEGMENTATION): Your next step is to segment your prospects by size, specialty, or class. The point here is to align it with your business segmentation process. Some companies segment their customer base by size or potential revenue. You should follow the segmentation process that your company has. Once you have completed this step you are ready for the next step. This step will help you understand the market potential in your territory.
MARKET POTENTIAL (AOV X # OF PROSPECTS): Now that you have the number of prospects in your territory and you have segmented these prospects by your company’s segmentation you can now take the average order value (AOV) of a sale by the number of prospects in your market to calculate your market potential. If your average order value for companies with 10 employees is $15,000 annually, and you have 150 companies with 10 employees in your territory your market size for this segment is $2.25 million ($15,000 x 150 prospects = $2,250,000). You will continue this exercise with your other segments and add all your segment market dollar amounts to get your total territory market potential. Now to the next step and YES, you will need your sales ratios and metrics moving forward.
MATCH UP YOUR SALES RATIOS TO YOUR QUOTA AGAINST YOUR MARKET POTENTIAL: Now it’s time for you to pull out your ratios and bump it up against your sales quota and your market potential. THIS IS CRITICAL. If you don’t have this information then I suggest you call your manager and ask him or her for them. You will need to know your core ratios and metrics such as first appointments to opportunities, and opportunities to close. You will take these ratios and begin calculating how many first appoints, opportunities, and closes you need to exceed plan, monthly, quarterly, and yearly. This will tell you how many sales are needed in each segment within your territory to exceed your quota. Now you are ready for your next steps and this is creating your target list.
TARGET LIST: It is now time to go back to your list of prospects by segment so you can put together those prospects that you must have as your customer base. These are the prospects that you know are the most influential prospects in your territory and having them as customers will help you build a solid book of business. These are the prospects that you call on often. I have heard some sales professionals call this their elephant hunting list or whale hunting list. The point I am making is that you have to know your territory and know where the big hits are so you can start building rapport with these prospects immediately. Closing a few of these deals throughout the year can help you exceed your number that much faster.
MEASURE YOUR OUTCOMES (MONTHLY, and QUARTERLY): Break down your objectives and goals into months and quarters. Then you need to review your outcomes each month and quarter to ensure that you are on track and executing your territory plan. IF YOU DO NOT DO THIS, YOU MIGHT AS WELL THROW YOUR PLAN AWAY BECAUSE IT IS WORTHLESS. Not measuring your outcomes means that you have taken a W.A.G. approach as my finance MBA professor from the University of Notre Dame would say. W.A.G. means wild a_ _ guessing as opposed to S.W.A.G. which is scientific well-thought analytical guidance. Decide on using the later and measure your outcomes. Keep in mind that territory plans are not static or inflexible. Territory plans are dynamic, and always changing with the needs of the business. You must review your status continuously and adjust as needed.
REWARD YOURSELF: How will you reward yourself for all the work and effort you have put into executing your territory plan. Think of something big and really worth your effort. Have a photo of it and hang it in your office, car, bedroom, and everywhere else you can. This is your motivation. Now imagine how great it will feel when you achieve your goals. I can only imagine how great it felt for my rep to buy his first Harley and the ride he took when he drove it off the lot. It had to be a great feeling.
In conclusion, territory planning is critical to achieving success each year in sales. A territory plan defines how you will spend your time and who you will spend it with. This is why you must measure your outcomes monthly, and quarterly to ensure you are on track or you will need to adjust your plan. The bulk of the work that goes into a territory plan is done in the analytical stage. This is where you segment your territory and truly map out your territory market potential. Furthermore, you must consistently review your territory plan against your outcomes to ensure you are on track. Lastly, reward yourself for all the hard work and effort as your begin executing your territory plan and having success.
(Special thanks to all that helped make this post. You each are living examples that sales is a noble profession)Great selling!!!
Insidesalesmagic….believe in the power of the telephone!!!


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