Optimizing Sales Territories

Susmita B.


Increasing the productivity of a sales force is what a sales manager primarily focuses on. Sales managers are expected to bring in more sales with less expenses, less time, and less disruption, etc. They implement every possible sales strategy to get the highest possible productivity out of their sales force. However, they often overlook the simple yet important strategy of optimizing their sales territories which is quite powerful in increasing the productivity of a sales force.

Decades of modern business experience in a globalized world have shown that an imbalanced sales territory can cut down on productivity. It is also surprising that many sales managers are not at all aware about how unequal their sales territories are and how negatively it is impacting their productivity.

The issue of imbalance in sales territory distribution should be addressed in every company with customers spread over a large distance. This can be done via an organized territory optimization process. The process should have the following steps:

1) Set objectives and determine criteria - There are a few very clear objectives of this process:

- To have proper workload balance

- To have proper distribution of potential client accounts and potential sales people

- To avoid or minimize relationship disruption

- To cut down on travel time and expenses

It is not realistic to expect that all these objectives will be fulfilled simultaneously. For example: in order to maintain client relationships, travel time and expenses may increase a bit. In the scenario where objectives cannot be satisfied all at once, it is important to determine criteria for territory alignment. Every territory optimization process may have different criteria. According to the criteria, we have to prioritize the objectives that are most important and to meet the other ones later.

2) Create supporting database & map: Once we have set the objectives and determined the criteria, it’s time to collect all relevant data from all possible sources. We should have a list of all potential clients within the entire marketplace (can be purchased from database marketing companies for various industries/customer types), list of sales people, history of client relationships (sold and inactive accounts) and obviously a detailed map of the territory to be optimized. The data should be accurate and bias free. All the data should be evaluated and verified often because very important sales territory optimization decisions will be made based on this data.

3) Align the territories: Alignment of territories can be done manually or with the help of any reputable commercial sales territory optimization software available in the market. Many companies even hire consultants on a contract basis to get this optimization done properly. Companies can even develop their own model or algorithm for this purpose. Using a ready made optimizer saves time and effort to a great extent. Whichever path is chosen, optimization should be aimed at achieving the objectives according to the determined criteria and should make sure that maximal productivity of the sales force can be achieved.

4) Review and modify: Managers at every level should review it and ask for modifications if needed.

5) Implement: Once the optimization is finalized, approved and required changes are identified, it should be implemented. Implementation takes some time as in this stage, there may be some shifting of workplaces, changes in responsibility and introduction to clients. All of these actions should be done respectfully, with minimal disruption to clients.  

6) Audit/Monitor: Auditing a process is always good for making sure that it’s working. We can conduct periodical audits and determine if optimization is working and is able to increase productivity or if there is a need for change. If there is, then again set objectives, realign the territories, review, modify, implement, audit and repeat as necessary.