Sales Territory Management Plan: Creating a 5 Step Strategy [Video]

Most consumer goods companies understand the importance of an effective sales territory management plan - it can prevent territory overlap between field reps, which causes confusion and wastes time. By clearly defining territories, you can create a strategy that ensures field reps will not compete against one another for the same customers or visit a customer twice. Effective territory management can also save you time and money.

In this blog we discuss why territory management is so important, and give you five steps to help you create a territory management plan that will lead your business to success:

As an example, we’ll see how Matt’s Snacks, a Boston-based company, devised a territory management plan to increase efficiency and maximize the impact the activities their field reps have in-stores.

More of a visual learner? Click the video below to watch these tips!

What Most Territory Management Strategies Miss

When your reps are in the field, you aren’t there to monitor their every move and make sure they are on top of their game. With territory management, managers are able to create an organized system for their reps that empowers them to perform to the best of their ability in the field. Having this organized system matters for more reasons than just avoiding account crossover -- reps who are part of a well-managed territory system are able to provide their managers with quality data that puts brands ahead of their competition.

For example, a rep that is well-organized and data-driven knows exactly what his accounts are and what he has to do to keep them happy is going to be a lot better at his job than one that feels constantly confused and frustrated by the uncertainty of his territory. The well-organized rep will be better equipped to catch out-of-stocks before they happen, build strong retailer relationships that allow you to vouch for more facings, and execute successful promotions that are specifically tailored to each location.

When we talk about data, we mean more than just sales velocity and SKUs (though these are still extremely important!). Top-performing field teams go beyond the basics and work to get real-time data from the field constantly flowing. Throughout this post, we emphasize the importance of quality data as the backbone of your territory management strategy.

Step 1: Segment your customers

Keeping tabs on all of the accounts you have open is a crucial organizational element for any sales territory management strategy. Regardless of what characteristics you use to chop up your market segmentation, determining how much contact accounts within each account requires can go a long way towards helping your reps know when to make an in-store visit. Additionally, a retail execution system that integrates with POS data can streamline this process.

Your audience and customers is typically broken down into any of these four major categories: geography, demographic, psychographic, and behavioral. Once categorized, you can sort and filter stores by territory, making it easier to draw territory lines and redistribute field rep assignments as needed.

Matt’s Snacks segmented its customers by geography and demographic because younger customers were more dispersed locations. Matt figured this would make it easier to divide up a large territory. 

Step 2: Commit to territory planning 

By looking at your retail execution strategy, you can devise a plan based around your core objectives, but you should also define your objectives by the client as well. By breaking down your objectives by the customer, you can construct a more detailed plan of how much time you should allocate to each client. It will be helpful if you include your field reps in this process – if they help to develop the plan, then they will be more likely to follow it. While creating a strategy, you should be keeping three things in mind- you want to maintain current clients, reach out to potential clients, and obtain new clients from your competitors. Your plan should help you accomplish each of these three things.

Matt had growing demand from small to medium retailers, so his objective was to be able to handle all of the demand and have his field reps visit each client regularly to avoid out-of-stock instances and maintain client relationships. He then looked at how to achieve these objectives. He found that some customers were more important than others, and created a plan to ensure that they were given more time than other less important retailers.

Step 3: Schedule your visits and plan your route

Once you’ve decided how much time you want to spend on each client visit, schedule your visits so that you can plan the most effective route from one store to another based on proximity. Again, using data points here can help you create a realistic schedule for your reps. If you know that visits to one specific location tend to take up more time than others, you’ll know to assign that rep fewer visits in a day so they are able to do their job well without feeling rushed.

Matt then called each retailer and created a schedule so that he could begin planning the routes for each field rep to take.

Step 4: Delegate Territories

Assign each field rep a territory to cover. By making this very clear, you can avoid territory overlap. Take into consideration the specific capabilities of the reps you have and try and match them to the territory with the target demographic you believe would be most suitable.

For instance, if one rep is able to visit more clients in a day than most of your other reps, then you can assign this rep a territory that has more clients. Be sure to consider your reps’ personal connections and strengths as well. If they have built strong relationships with one client, then you should keep them in that client’s territory.

Over time, your reps will begin building data-driven partnerships with their retail managers.

After scheduling all of the visits, Matt called together this team of field reps and began to delegate territories to each one. For example, he gave Phil, his top performer, the territory with the most clients because he knew that Phil would be able to handle it. He gave Jack the territory with mostly rural areas because he knew Jack was skilled at covering long distances quickly.

Step 5: Track Performance over time

No plan survives first contact with the enemy, so it’s important to be flexible even after implementation. Keep a keen eye turned towards the essential metrics of how your reps are performing over the different territories you’ve assigned them and take note of what’s working and what needs to change. Maybe the characteristics you used to decide the different territories need to be re-assessed or perhaps the timing for a particular sales push was off. Even the most meticulous plans will have flaws, and those need to be addressed at the earliest available opportunity.

After implementing his plan, Matt began to see that there were territories that had not yet been fully expanded into. He gave Jamie the task of opening new outlets- since Jamie was already in the territory that had the fewest clients, Jamie could then locate and target retailers that could potentially carry Matt’s Snacks products.

Planning Makes Perfect

Any battle-ready sales territory management plan will ultimately be shaped by the industry knowledge that professionals on your particular team will bring to the table. However, there are commonalities to the planning process that have emerged with the rise of the internet in how we conduct business that can be of use to any organization as they figure out how best to optimize their teams for long-term, sustainable performance.

Through a well thought out territory management plan, you can ensure that you are maximizing the efficiency of every activity your reps take in the field giving you a big leg up on the competition. And your reps will ultimately be happier - now that they can be productive and successful every day. Click below to learn more about how you can make data-driven decisions in your retail execution  to have the biggest impact in every store.