Sales Territory Mapping¶
A sales territory is a specific geographical area or segment of customers assigned to a sales representative (rep). The rep is responsible for all sales activities and revenue generation within that defined region or customer segment. In simpler terms, territories help divide your total target market into smaller, manageable segments for your sales team.
Examples of Sales Territories:¶
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A software company selling to small and medium-sized businesses (SMBs) across the US could split the country into Northeast, Midwest, South, and West sales territories. Reps based in each territory would handle the sales for that area.
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An enterprise software company might divide its market by industry verticals. One rep could handle all education/non-profit accounts, another healthcare accounts, and so on.
Sales territories can be defined by various factors like location, company size, industry, product line, or even specific channel partners. This approach is especially useful for account-based marketing campaigns.
Why Are Sales Territories Important?¶
Implementing sales territories provides significant strategic value, especially for SaaS (Software as a Service) organizations. Well-defined territories lead to optimal sales coverage, increased efficiency, and higher productivity. Here are the key benefits of using sales territories:
1. Improves Sales Efficiency¶
With sales territories, reps can focus on nurturing a well-defined set of target accounts, rather than spreading themselves too thin. This focused approach leads to higher win rates. For example, an enterprise rep can concentrate on a select group of strategic prospects, personalizing messaging and solutions for each one.
2. Eliminates Sales Burnout¶
Reasonably sized sales territories help prevent reps from becoming overburdened. For instance, instead of overwhelming a rookie rep with 500 unsegmented leads, you could allocate them a focused territory of 100 well-qualified accounts. This manageable workload keeps teams motivated and high-performing.
3. Enables Granular Performance Tracking¶
Aligning reps to specific sales territories makes it easier to track performance for each segment. Sales leaders can quickly identify high-performing territories versus those that need more support. This granular visibility allows for data-driven decisions—such as adjusting goals, realigning accounts, or increasing marketing spend.
4. Provides Market Insights¶
When reps consistently sell into a specific industry or persona, they become experts in that segment. For example, a vertical rep will learn the terminology, use cases, challenges, and dynamics of their sector. This expertise allows them to effectively position products and build strong customer relationships.
5. Optimizes Lead Distribution¶
Reps who are familiar with their territories can provide strategic insights that benefit marketing, product development, and competitive analysis. For example, feedback from a public sector rep can help tailor messaging and packaging for government buyers.
6. Facilitates Specialization¶
Inbound leads can be instantly assigned to the right rep based on attributes like industry, geography, or company size. This quick hand-off results in rapid and effective lead responses, which means customers receive sales assistance faster.
7 Types of Sales Territories for SaaS Companies¶
Sales territories can be defined in several ways depending on your business, products, and customers. Here are the most common SaaS sales territory structures with examples:
1. Geographic Territories¶
This method divides territories based on geographic regions or offices, often used by field sales teams.
Example: Salesforce might have an East Coast territory covering New York, New Jersey, and Pennsylvania, with reps based in Manhattan managing all accounts in this area.
2. Industry or Vertical Territories¶
Accounts from the same industry or vertical are grouped into segments.
Example: Drift could have specific reps for e-commerce, media, and technology industry verticals.
3. Customer Size Territories¶
Create territories based on customer size—such as SMB, Mid-Market, and Enterprise customer tiers.
Example: Larger customers, with longer sales cycles and complex needs, would be managed separately from smaller customers who may need simpler solutions.
4. Product Line Territories¶
Align reps to specific products or solutions within your SaaS offerings.
Example: Salesforce reps could be assigned to Sales Cloud, Service Cloud, or Platform based on their expertise.
5. New Business vs Renewals Territories¶
Separate territories for reps focused on acquiring new customers versus those managing renewals and ongoing subscriptions.
Example: New business reps handle outbound prospecting, while renewal reps focus on customer success and retention.
6. Channel Sales Territories¶
Dedicated partner account managers work with reseller partners in specific regions.
Example: An APAC channel partner territory manager handles all partnerships and grows revenue in that region.
7. Named Accounts Territories¶
Strategic accounts, like Fortune 500 companies, are assigned to specific reps who can provide customized solutions.
Example: Named account territories receive all the necessary sales and marketing resources to secure massive deals.
How to Create an Effective Sales Territory Plan¶
Creating an optimal sales territory plan is crucial but complex. Here’s a step-by-step guide to help you design a sales territory plan that drives growth:
Step 1: Define and Segment Your Target Market¶
Analyze and divide your total addressable market into logical segments that align with your business.
- Segment by geographic region, industry vertical, company size, buying criteria, product lines, or distribution channels.
Example: A tech company selling globally might divide its market into North America, APAC, EMEA, and LATAM regions, and then further into industry verticals like healthcare, finance, and retail.
Step 2: Analyze and Assess Potential of Each Territory¶
Evaluate the sales potential and viability of each territory segment.
- Analyze current and historical sales data, research target accounts, and estimate market size and share.
Step 3: Define Goals and Quotas for Each Territory¶
Set revenue, activity, and sales quotas for each territory based on its potential.
- Define annual, quarterly, and monthly revenue targets. Set call, email, and demo targets to generate a sufficient pipeline.
Step 4: Assign Territories to the Right Sales Reps¶
Allocate territories to sales reps based on their skills, experience, and capacity.
- Consider reps' previous experience, preferences, and strengths. Rotate territories periodically to develop well-rounded reps.
Step 5: Customize Sales Process for Each Territory¶
Personalize sales processes and materials for each territory.
- Create targeted Ideal Customer Profiles (ICPs), buyer personas, and adjust messaging and sales playbooks to fit each territory.
Step 6: Configure Your CRM for Lead Routing¶
Set up your CRM to manage lead routing based on your sales territory definitions.
- Automate lead assignment based on territory rules, build a lead scoring model, and integrate marketing automation workflows.
Step 7: Track Territory KPIs and Optimize¶
Track key performance indicators (KPIs) for continuous optimization.
- Monitor territory revenue, pipeline activity, win/loss analysis, sales cycle lengths, and customer satisfaction. Make data-driven adjustments as needed.
Remember to make iterative changes to your sales territories to allow reps time to adjust without disrupting their workflow.
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