There’s a lot to think about when developing an annual sales plan to support your organization’s strategy and objectives:
New customer acquisition, customer retention, increasing share of wallet, resource budgeting … just to name a few. But don’t forget about your sales territory plan. It’s a critical team effort to determine the best place to win.
In this blog, you’ll learn how to create a sales territory plan in 3 steps:
- Identify buyer-centric market opportunities
- Calculate your Total Addressable Market (TAM)
- Expand with a Win/Loss SWOT
Even though the first quarter is already behind us, it’s not too late to incorporate sales territory planning into a winning sales strategy and produce results, before the year is over.
What is a Sales Territory Plan?
A sales territory refers to a geographical location that is assigned to a specific sales rep or sales team, for the purpose of targeting prospects within that area. However, in our digital age, some companies have expanded their definition of sales territories beyond geography — choosing to include other data points like industry and company size.
A sales territory plan refers to the strategic organization of sales territories to maximize revenue. Once a sales team has defined their territories, they become more efficient by assigning the right sales reps to the right territories, tailoring their outreach efforts based on each territory and customer’s unique characteristics, and more.
In short, a sales territory plan helps you guarantee your sales team targets the right people to close the best, and most profitable, deals possible.
Why is Sales Territory Planning Important?
Without proper territory planning, how do you know where your sales reps should focus their time? Are there other untapped regions or verticals that should be getting more attention?
And how do you measure year-over-year performance in particular verticals or territories – without knowing where to measure in the first place?
3 Steps to Build a Laser-Focused Sales Territory Plan
Let’s work through this with an example in mind: cloud-connected storage as the solution.
Step 1: Begin with a Buyer-Centric Approach.
Before you begin looking at which market segments or verticals your sales reps should be focused on, consider why those segments need your solution in the first place.
Take the example of a company selling a cloud storage solution: Many CIOs have mandated a “cloud-first” strategy to their IT organization. While cloud migration is a hot topic with many IT teams, they struggle with problems like controlling cloud consumption costs or mitigating security risks. These pain points represent an opportunity in the IT market.
A product development team, on the other hand, may need to use big data analytics and the Internet of Things to differentiate their customer experience and engagements. As a cloud storage provider, the pain points associated with processing speed and data storage present another market opportunity with product development buyers.
Think like a customer first.
This is what we like to call an “outside-in” go-to-market strategy to territory planning.
Don’t think you should know all these answers yourself. Your product marketing and management teams are excellent partners for identifying the needs of different buyers.
As a pragmatic marketing best practice, product marketing and management teams should have market requirements documents to help answer:
- Which are the most opportunistic markets to target?
- What type of demand needs to be created to drive customer interest?
- What are your buyer needs? What do buyers care about when making a purchase?
Keep in mind that your customers are constantly evolving, just like your company. The benefits that resonated with your customers two years ago might not be the same requirements they need help with today.
For example: Some verticals, such as life sciences, have strict data compliance requirements; placing data in the public cloud is prohibited in certain countries. Your cloud-connected storage solution enables these clients to keep data residing on private storage that is connected to the cloud, not actually in it. In this example, your solution solves for this emerging buyer pain point.
Knowing these market requirements upfront during your sales territory planning exercise will define WHO to target (CTOs and operations roles in the life science industry) – and, most important, WHY (because they can maintain data compliance as they realize other benefits of the cloud).
This becomes the foundation to knowing who your ideal customer profile is for each of your solutions.
Step 2: Know Your Total Addressable Market
Once you identify the market needs you’re targeting, it’s time to identify the size of the market opportunity.
Understanding your Total Addressable Market (TAM) will help determine if a new region or vertical needs to be part of your territory plan. (It may be that your existing sales coverage isn’t optimal, and you need to hire a new business development rep to drive customer acquisition within a new vertical or market segment.)
New General Data Protection Regulations (GDPR) is a great example of a location-bounded sea change. Market shifts like this present new growth segments for your sales team to target.
This is where good market data becomes extremely important to your sales territory strategy. In fact, without good data, step two cannot be completed.
Marketing and sales intelligence tools like ZoomInfo allow you to quickly conduct a Market Segmentation Analysis to explore which verticals, or industries – such as life sciences – present the largest opportunity for your solution. Once you’ve identified the verticals, you can segment prospective contacts and companies by region. You might find your existing sales coverage needs to expand into an additional territory to drive growth.
Step 3: Win/Loss Analysis Programs for Competitive Insight and Customer Feedback
Now that you know who (CTOs in life sciences), why (maintaining data compliance while using cloud services), and where (existing areas vs. new) to focus – the next step is identifying opportunities where you can win against local competition.
Look at past win/loss analysis data per region to develop a SWOT analysis on each major local competitor. This will help you understand why you win or lose locally.
An independent interviewer allows the buyer to more freely respond without offending or creating conflict. You may want to consider outsourcing your win/loss program to a third party, like Notable Evolution, who will gather unbiased insights.
The resulting information keeps you current with the ever-changing marketplace and buyers. Getting inside your buyers’ head increases your understanding of what they need, their buying criteria and pain points.
Not only that, you can gain intel relating to your competitors’ messaging, pricing strategy, and product features.
“Those who take a more comprehensive approach [to win/loss analysis] have seen a 15% to 30% increase in revenue and up to 50% improvement in win rates.” — Todd Berkowitz, Gartner Group
Benefits of Buyer-Centric Sales Territory Planning
By taking a buyer-centric approach to territory planning, you’ll benefit in a few ways:
- Align your sales team to the best regions, segments, and/or verticals for success
- Align your company strengths to provide an optimal customer experience
- Partner with Product Marketing and management to drive strategic corporate objectives
- The territory plan becomes the foundation for account-based marketing (ABM) and will significantly speed up execution of ABM programs.
It’s never too late to take a step back and make sure that the efforts of your sales team are focused on the right WHO, WHY, WHERE, and WHAT.
The benefits of a focused sales approach go far beyond the deal.