How to Increase B2B Sales by Redesigning Sales Territories
The most forward-thinking B2B sales and operations directors have started incorporating location intelligence into their sales territory management and defining sales territories differently from the rest.
A central component of territory management is sales territory design. Gartner has found a 73 percent increase in business implementation of territory management software since 2012 a figure likely to increase as more and more companies adopt data-driven strategies.
Many companies still design sales territories based on predefined geographic boundaries like state borders zip codes and city borders.
But defining sales territories this way can lead to uneven distribution of deals poor utilization of sales executives’ time and a lack of the granularity required in large urban areas.
The most forward-thinking B2B sales and operations directors have started incorporating location intelligence into their sales territory management capturing the value of their "data exhaust" to set themselves apart from their competition.
Instead of basing sales territories on geographic boundaries they are using diverse datasets related to customer value and size customer behavior and other demographic data to identify areas with below average sales performance.
A recent study found 72 percent of companies admitted to disproportionally allocating more resources to high profile clients.
Below let’s take a look at 3 steps sales and operations directors should take when redesigning sales territories:
Establish Clear Goals and Objectives
The first step to take when working with a location intelligence platform for sales territory design is to have specific goals and objects established. Sales territories are often defined in relation to an individual company’s go-to-market strategies. To put these strategies into practice a company may be using a definition of "territory" with a:
- Geographic-based focus
- Service-industry focus
- Account-based focus
- Product-based focus
Understanding your company’s go-to-market strategies as well as the working definition of "territory" will help in selecting the design’s base unit of measurement. Typically sales territories are divided up with traditional geographic boundary units like 3-digit zip code 5-digit zip code census tract city county state or even by region.
But predefined boundaries can lead to territory designs out of sync with your company’s specific strategies which can result in missed opportunities or misallocation of resources.
Instead location intelligence visualization tools can provide an alternative solution.
Sales and operations directors for example could use average sales size by location as a base unit measurement to design territories. As such this design would take into account service industry trends to determine territories with best business growth potential but whose dimensions may not correspond to predefined geographic boundaries.
Explore territory designs for balance and alignment
The next step in designing territories with a location intelligence platform involves using an interactive data visualization tool with advanced routing capabilities.
Instead of simply plotting points on a map of a customer or prospect’s location sales and operations managers are exploring and realigning territories with data visualization tools to discover data-driven solutions to the two biggest challenges encountered when designing a sales territory:
- Territory Balancing: the equal distribution of prospects among sales team
- Territory Alignment: the process of assigning the right salesperson to the right area to increase sales productivity
Extracting location data that can be used to ensure territory balance and alignment in your design requires a dynamic data visualization tool capable of importing data layers from various internal and external sources related to industry trends potential customer segmentation geographic constraints derived from traffic and mobility data and sales team performance.
Location intelligence platforms equipped with data visualization tools can help sales team managers:
- View territory hierarchies to locate where customer base is located
- Design custom territory according to specific goals and objectives of your company
- Prioritize customers and prospects in an area with a heat map
- Import external data from a curated data library to contextualize surrounding sales location
- Overlay datasets from different sources to determine if territory is over-or-under serviced
These are only a few features that can help optimize a territory management plan especially when design a sales territory. But let’s take a look at one feature specifically in the next section that can really help reduce overhead.
Find out what a difference an interactive data visualization can make when realigning sales territories in our on-demand webinar 'Using Spatial Data Science to Balance Field Sales Territories'
Optimize sales territory routes
A recent business travel report found that the average total cost for a business trip in 2016 amounted to $1 068. At the same time Salesforce’s 2017 State of Sales Report found that 64 percent of surveryed reps spend most of their time on non-selling tasks. High travel costs plus low sales opportunities equals serious trouble for companies including an increase churn rate as frustrated employees resign.
Spatial optimization techniques can help companies avoid this situation however and design territories based on highest revenue potential with lowest amount of travel possible which in turn can decrease operational spending while increasing sales productivity.
Three location data services helping design efficient territories are:
- Routing: an analysis providing shortest route based on mode of transportation
- Geocoding: an analysis providing geometric coordinates for select location
- Isolines: an analysis providing accurate time of travel per route within selected location
Advanced routing capabilities can help operations managers with fleet tracking sales managers with productivity and sales reps with meeting quotas all of which depend upon sales territory design.
We’ve covered a lot of ground related to designing a sales territory with a location intelligence platform focused on (1) choosing boundary units that align to your company goals and objectives (2) building dynamic data visualizations to ensure territory balance and alignment and (3) optimizing designs using location data services.
Are you looking to create a new sales territory plan? Schedule a call with one of our territory management specialists to get started.