Creating an Effective Sales Territory Plan: A Comprehensive Guide

Creating an Effective Sales Territory Plan: A Comprehensive Guide

Introduction

Sales territories are a crucial element of go-to-market strategy. The best practice is to carve territories in such a way that allows you to match your resources with the buyer journey. Sales strategy and operations teams can also optimize territories year-round to enable sellers to spend time selling rather than trying to figure out who to sell to. That said, sales operations and strategy leaders must use intelligent territory management to set sales reps up for success year-round. Smart territory management means sellers have the correct accounts at the right time. Although sales strategy leaders handle the broader sales territory planning and carving strategy, individual reps may also create their plan to determine how to go after the accounts in their territory. A sales territory plan can be essential for both sales representatives and organizations. The plan can improve efficiency, focus, and results and serve as a communication tool. Many RevOps leaders may ask sales reps to create a sales territory plan to demonstrate how they will focus their efforts. In this blog, we will explain what a sales territory plan is and how to create one that will drive revenue in your organization. We also provide a sales territory plan template that RevOps can provide to their reps.

What Is a Sales Territory Plan and Why Is It Important?

A sales territory plan is a sales representative’s game plan for handling the accounts in their territory. Creating this plan helps the rep to prioritize their time and effort. It is also a tool that can drive visibility and accountability for other organizational stakeholders. Often, individual sales reps have preferences for how they manage their accounts. For this reason, they can be resistant to changing processes or using a template. However, when the organization needs to create a repeatable and scalable sales process, a sales territory plan can be a way to get consistency across reps. Using a template also makes it easy for leadership to check that the sales efforts align with business goals.

What Are the Key Components of a Sales Territory Plan?

Every business will have different things they expect to see in a sales territory plan. At a high level, it should include some target accounts and the rep’s approach to going after them. The number of target accounts will vary widely depending on the segment and the business’s model. Some companies ask sellers to identify target accounts in batches of 50, while others may do it in smaller batches. There may be other approaches, such as creating two buckets of target accounts – like a top 20 and then the next 30. Here, it’s important to distinguish between a territory plan and an account plan. Both are important, but the territory plan is at a higher level than an account plan. In general, here are some of the most common elements of a territory plan:

  • Target Account Selection Criteria: a list of target accounts and, for each account, a note on the criteria the rep used to select it
  • Collaboration and Resource Needs: a list of supporting materials or activities the rep thinks will best help entry into the account
  • Relevant Offers or Incentives: ideas for things the rep could provide to the account contacts to entice them to engage
  • Estimated Revenue Potential: an estimate of the deal size for the account
  • Structure of Engagement Dates: an overview of the initial period of outreach that the rep has planned

While many of these elements are part of the organization’s broader sales strategy, including them in a territory plan is a way to ensure the rep is fully aware of the overall go-to-market strategy and is aligning with it.

An Example Sales Territory Plan Template – Click Here to Download a Word File

How Do You Choose Target Account Selection Criteria?

More mature organizations usually have established guidelines for selecting a target account. These guidelines may include a numeric account score or a more qualitative way of creating account tiers. In the best case, the organization will have used account scoring or other factors in the territory carving and balancing process and communicated it clearly so sales reps are very familiar. In less mature organizations, there may be no formalized scoring but rather a more qualitative assessment of an account’s potential. Either way, these scores should be based on an analysis of past performance. Through this analysis, there are typically factors that you can identify that provide more objective criteria for determining target accounts. Some of these factors are:

  • Firmographics: How many employees does the company have? How many employees have they hired recently in a specific area? What is the industry? This firmographic data typically aligns with the company’s ideal customer profile but may be more recent or niche. For example, when the government implements new requirements for school districts for nutrition, food service companies may use that information to target specific schools.
  • Similarities to Recent Closed-Won: When a trend emerges, sales reps may notice it first since they are on the front line. Suppose they see, for example, that the most recent ten deals that closed were all companies owned by private equity. In that case, they may focus on those companies rather than those funded by venture capital. Similarities to recent closed-won could also include more granular details of industries that are likely to buy. For example, they may find that many recent deals were in the cybersecurity software area and decide to target companies in that industry.
  • Propensity: Aside from intent data, some factors indicate that an account is likelier to buy a product. Identifying these types of criteria, either from intent data or qualitative characteristics, can help find deals that will close quicker because the company is ready to buy. For example, people who are new to their roles are often more likely to buy. This likeliness to buy may stem from the person getting assigned to solve a specific problem for which they need to buy a new tool. These people also have more appetite to do something new and creative. Being new in a role is just one type of precipitating event that a rep may use to target a specific account.

How Can You Leverage Collaborative Efforts for Success?

Teamwork is essential in any sales organization. However, it is ultimately the rep’s job to orchestrate and manage collaboration to amplify their sales efforts. Some examples of cooperation are:

  • Marketing: Coordinating with an ABM team to run a specific campaign for a target account or suggesting certain content that could be valuable to an account.
  • Partners and Referrals: Depending on the structure of these programs, how a rep coordinates it will vary, but reps must explore the opportunities to get introductions via established partner and referral channels.
  • Business Development: While there are a lot of different structures for aligning BDRs/SDRs with AEs, this collaboration is critical to an AE’s success. To drive collaboration, the AE should be proactive by communicating clearly with the SDR about the target accounts and working together to agree on a process for going after them. For example, having an SDR warm-up accounts can make a massive difference in the velocity of the customer journey.

What Makes for Irresistible Offers?

After a rep selects a target account, the next challenge is to select appropriate offers and incentives that entice prospects and drive engagement. The rep must know all the offers and incentives available to them and match them with each account. For example, this could involve inviting prospects to a specific networking event they could benefit from. It could also be sharing customer success stories or testimonials, which is particularly effective if the prospect can gain valuable insights relevant to their work. Another type of offer relates specifically to the product’s pricing or packing, such as a discount or even a free trial.

How Do You Estimate Revenue Potential Effectively? 

Forecasting deal size is a central part of pipeline reviews. However, accounts that are in earlier stages are typically not included in the pipeline numbers. For this reason, the revenue estimate can be more superficial. It is still important for a rep to keep an eye on these numbers, though, so they can always be aware of how they are working toward targets. One of the most common ways to do this is to determine an average price per user and then use employee counts to estimate the number of users. Again, at this stage, a basic calculation like this is sufficient. It is important, though, that reps know the average prices and differences across industries or segments if they deal with accounts that differ along these lines.

How Do You Structure Engagement Dates and Sequences?

There is an art to strategic follow-up and persistence. The best reps are well-attuned to how their communication is landing. They know when to push and when to pull back. Over time, reps should aim to develop an optimal approach to scheduling outreach and maintaining contact. When structuring the engagement dates, reps should address the following:

  • What is the outreach period? For example, if there is an established 6-week sequence, when is it scheduled to start and end?
  • How will multi-channel communication overlap? The sequence details typically include this information, but a note about what structure the rep has scheduled will help stakeholders confirm that the rep uses all communication channels.
  • Where are the key decision points for removing accounts from the target list? If the rep doesn’t get a response within a few weeks, they may decide to shift focus. Or, for example, they may move an account from a highly personalized sequence to a fully automated one. It streamlines efforts to decide this all in advance.

How Can You Create a Cohesive and Clear Territory Plan? 

Once a rep has created a territory plan, they can engage with other stakeholders by sharing it more broadly. However, this means it is necessary to organize the plan in a way that will be clear to others. Using tables is a great way to present the information and make it easy to understand. Using tables also makes ensuring you have the same information gathered for all target accounts easier. One of the biggest challenges in creating a territory plan is to balance depth and brevity. Since it is not at the stage of an account plan, the rep can include less detail. Still, there needs to be enough information for other stakeholders to understand that the rep has a focused plan of attack.

How Do You Align Your Territory Plan with Organizational Strategy?

Perhaps the most salient feature of a territory plan is to ensure the rep’s approach will align with the overall company strategy. Sales strategy leaders and enablement teams should provide reps with clear documentation of the organization’s goals. Reps can use the documentation to translate that strategy into their tactical approach. Reps must understand the product offerings most appropriate for their segment’s accounts. Collaboration and iteration between reps and sales leaders become crucial. As a communication tool, sales leaders can use the content in the territory plan to identify places to coach their reps.

Conclusion 

A well-crafted sales territory plan is vital for both sales representatives and organizations. This guide emphasized its role in strategic navigation, efficient resource allocation, and goal prioritization. The plan ensures that sales efforts align with business objectives, fostering consistency and scalability. The plan enhances clarity and focus by encompassing target criteria, collaborations, compelling offers, revenue estimates, and engagement strategies. It serves as a bridge between personal strategies and overarching goals, facilitating alignment. With this synchronized approach and continuous refinement, sales teams can maximize revenue growth and thrive in a dynamic market.

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