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Glossary of Marketing Terms

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Territory Management

Territory management is a strategic approach used in sales and marketing that involves the division of a company's customer base into geographical areas or 'territories'. Each territory is then assigned to a specific sales representative or team.

The goal of territory management is to ensure the efficient allocation of sales resources, maximize market coverage, and provide better customer service.

Here are some key components of territory management:

1. Territory design: This involves defining the territories in a way that balances potential opportunities and sales resources. It's based on various factors like geographical location, customer density, market potential, and salesperson workload.

2. Account allocation: After territories are defined, accounts within those territories are assigned to sales representatives. The allocation typically considers factors like the representative's expertise, the location of the account, and the potential value of the account.

3. Sales coverage: Territory management aims to ensure that all potential and existing customers within a territory are adequately serviced. This involves planning and scheduling sales calls or visits to meet customer needs and maximize sales opportunities.

4. Performance monitoring: Sales performance within each territory is regularly monitored and evaluated. This helps in identifying underperforming territories and implementing corrective measures.

5. Territory adjustments: Over time, customer distribution and market potential may change. Regular reviews and adjustments of territories help keep the sales approach aligned with these changes, ensuring efficiency and effectiveness.

The benefits of effective territory management include increased sales productivity, improved customer relationships, fair distribution of leads and opportunities among salespeople, and more efficient use of resources. It helps businesses to reduce travel time and expenses, ensure that high-potential accounts receive the needed attention, and that all customers receive regular and timely contact.

Technology plays a significant role in modern territory management. CRM (Customer Relationship Management) systems and sales analytics tools can assist in the design, allocation, and monitoring of sales territories, and provide insights that drive better decision-making.

What is territory management?

Territory management is a strategic approach to business practice that involves organizing and allocating geographic areas to effectively manage resources and sales efforts. The essential purpose of territory management is to effectively enhance productivity by strategically dividing a market or customer base into manageable segments.

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When to use territory management in Salesforce?

Some situations when using territory management in Salesforce can be particularly beneficial are as follows:

  1. Significant geographic coverage
  2. Targeting specific customer segments
  3. Seasonal or regional sales trends
  4. Large sales team
  5. Territory expansion
  1. Significant geographic coverage: If the company operates in multiple regions or countries, territory management can help divide the overall market into smaller geographic areas and ensure that each territory is assigned to the appropriate sales representative, allowing them to focus on local customer preferences.
  2. Targeting specific customer segments: Compass serves different types of customers, and territory management can help divide the customer base into segments based on factors like company size or industry preferences.
  3. Seasonal or regional sales trends: In businesses where sales performance varies based on seasons or regional factors, territory management can ensure that sales reps are well-equipped to handle the fluctuations in the opportunities in the territory.
  4. Large sales team: For organizations with a sizable Salesforce, territory management can help avoid overlap and confusion in sales efforts by clearly defining territories and assigning specific accounts to each salesperson.
  5. Territory expansion: When a company expands its operations into various territories, implementation of management in Salesforce can be critical, and it enables a transition by allocating the new areas to appropriate sales teams.

Territory management vs. role hierarchy: What is the difference?

Territory management is basically used for dividing and managing a company’s market or customer base into specific locations or segmentation. It allows organizations to optimize resource allocation and sales strategies by assigning the right salesperson to the correct locations based on factors like geographical areas or industry.

Role hierarchy, on the other hand, is used to establish the logical hierarchy of user roles within an organization. It identifies the data visibility and access permissions of users in Salesforce.

Why is territory management important for outside sales teams?

Key reasons why territory management is essential for outside sales teams are as follows:

  1. Better customer engagement
  2. Segment-specific marketing and sales strategies
  3. Acquisition of territories
  4. Better sales analytics
  5. Large geographic coverage
  1. Better customer engagement: With territory management, sales teams can provide constant and regular interactions with customers, and this frequent engagement allows them to build rapport and trust, leading to customer loyalty.
  2. Segment-specific marketing and sales strategies: Territory management allows customized marketing can help avoid overlap and confusion in sales efforts by clearly defining territories and dividing accounts among each salesperson.
  3. Acquisition of territories: Implementing territory management in Salesforce can be critical when a company expands its operations into new territories. It allows a smooth transition by providing the new areas to the appropriate sales teams.
  4. Better sales analytics: By associating territories with particular sales data, territory management in Salesforce allows for more knowledge of sales analytics. You can track performance metrics for each territory and enhance insights into the effective strategies for various regions.

Large geographic coverage: If the company operates in multiple regions, territory management can help divide the overall market into smaller, more manageable territories.

What are the steps of territory management?

The steps involved in implementing territory management:

  1. Market analysis and data gathering
  2. Defining territory criteria
  3. Territory or geographical designs
  4. Resource allocation
  5. Territory assignments
  6. Training and development
  7. Goal setting and KPIs
  8. Sales planning
  9. Monitor and analysis
  10. Adjust and optimize
  11. Collaboration and communication
  1. Market analysis and data gathering: Initially, conduct a thorough market analysis and gather relevant data. This involves studying customer demographics, market trends and purchasing behaviors. The goal is to gain knowledge of the most promising territories.
  2. Defining territory criteria: Based on the marketing analysis, maintain criteria for defining territories, as this could include setting location or geographic areas, considering customer attributes on the industry, product lines or various other factors.
  3. Territory or geographical design: Utilize the established criteria to determine well-defined geographies. Assign particular regions or customer segments to each territory to ensure they are balanced in terms of sales potential.
  4. Resource allocation: Identify the appropriate allocation of sales reps, teams or resources to each location. Consider factors like the skills and expertise of salespeople, past performance and workload distribution to make sure an equitable distribution of resources.
  5. Territory assignments: Assign sales reps or teams to their assigned territories as this step includes communicating the territories, explaining the rationale behind the assignments and setting performance.
  6. Training and development: Provide training and development opportunities to allow sales reps with the knowledge and skills required to excel in their parts territories, as this might involve product training, sales techniques, and knowing the unique characteristics of each location.
  7. Goal setting and KPIs: Maintain clear goals and key performance indicators (KPIs) for each location or territory. These metrics should align with the overall sales goals and be measured to track performance.
  8. Sales planning: Develop individual sales plans for each territory or location, outlining the strategies and practices sales reps will undertake to achieve the assigned goal.
  9. Monitor and analysis: Implement a system to monitor and analyze the performance of each territory and sales reps regularly. This ongoing analysis will allow the identification of areas for improvement.
  10. Adjust and optimize: Based on the insights from monitoring and analysis, make required changes or adjustments to the design or resource allocation.
  11. Collaboration and communication: Create a culture of collaboration and communication among sales reps and teams working in different territories.

What are some of the best territory management software?

Examples of territory management software are as follows:

  1. Maptitude
  2. Badger Maps
  3. AlignMix
  4. Spotio
  5. Geopointe
  1. Maptitude: Maptitude is a powerful geographic information system (GIS) software that provides mapping and spatial analysis capabilities and utilizes for territory design, mapping customer data and optimizing route planning.
  2. Badger Maps: Badger Maps is a sales mapping software that helps sales teams establish optimized routes for field sales reps and assign in visualizing territories and customers on maps, allowing for efficient planning.
  3. AlignMix: AlignMix is territory design and mapping software that allows businesses to visualize sales territories and make data-driven decisions. It offers features like drag-and-drop territory creation and realignment based on performance data.
  4. Spotio: Spotio is a field sales and territory management tool that allows sales teams to plan routes, track customer interface and manage territories efficiently.
  5. Geopointe: Geopointe is a Salesforce-integrated mapping and geolocation tool that assists in visualizing, optimizing and managing sales territories as it enables sales teams to efficiently plan their activities based on geographic information.

What are the strategies of territory management?

Key strategies employed in territory management are as follows:

  1. Segmentation
  2. Resource allocation
  3. Account-based marketing (ABM)
  4. Collaboration and knowledge sharing
  5. Adjustments and realignment
  1. Segmentation: Segment territories based on relevant criteria like industry, customer size or product preferences. This allows sales teams to focus on specific customer groups and tailored approaches.
  2. Resource allocation: Allocate resources, personnel and budget strategies according to the territories. Consider the sales representative's skills and expertise, and past performance to optimize resource allocation and improve outcomes.
  3. Account-based marketing (ABM): Practice account-based marketing strategies that target and engage specific high-value accounts within the territories, as ABM allows for a personalized and tailored approach.
  4. Collaboration and knowledge sharing: Foster collaboration among sales reps working in different territories and encourage knowledge sharing and best practices to improve overall performance.
  5. Adjustments and realignment: Continuously review territory performance and make changes or adjustments, or realignments as needed, as this might include shifting accounts, and revising boundaries.

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