It’s January. Your competitors’ sales reps are off and running. Are yours?
The best way for your sales team to meet its revenue goals—and yours—is to develop and work through a territory plan. Don’t simply give your reps sales quotas and tell them to go figure. Have the reps develop a detailed territory plan that shows where the business will come from and how they plan to get it.
A territory plan provides the rationale and the road map for achieving a rep’s revenue goal. It’s a “bottoms-up” plan, by account and by product.
If your sales reps build their own plans, they are far more likely to believe in them. And this will make them more motivated and more accountable.
The Seven Step Territory Plan for More Effective Sales Reps
The plan should answer three questions for each target account: Who, What, and How.
- Who is the target company and who is its decision maker?
- What will you sell to each target prospect and at what price?
- How will you reach the target and convince the decision maker to buy?
The beauty of a territory plan is that it forces a sales rep to develop a strategy for how she will “make her number.” If she doesn’t make the number, both you and she will know where she fell short and why.
Below are the seven steps for creating a territory plan.
- Define the Territory. This is your job. As the boss, you define the sales territories for each of your reps. A territory can be defined as a geographic region, an industry category, or simply a collection of accounts. It’s important that you assign territories equitably so that all reps have a reasonable chance to make their numbers.
- Define the Account Profiles. Your sales reps should be executing your sales strategy. This means they should be calling only on companies that fit the criteria you’ve outlined: industry, size, product mix, growth potential, etc.
- Set Goals for Existing Accounts. In building their territory plans, your reps should include a mix of existing and new accounts. For existing accounts, the reps should analyze what each account purchased last year (both product or service and price) and make assumptions for the coming year.
When your sales reps set their account goals, make sure they include goals for the mix of products and services as well as revenue.
- Set Goals for New Accounts. Your sales reps will have no historical data for new accounts, of course. But they can make projections based on the size of each prospect company and its needs. A little research should tell them this. Like the goals for existing accounts, new account goals should go beyond revenue quotas. Set goals for the number of new accounts, industry mix, and product or service mix.
- Set “Stretch” Goals. Sales reps often set the bar very low for themselves. Once a rep completes her territory plan, you may want to give her “stretch” goals over and above her plan’s goals. Stretch goals should be challenging to attain but attainable nonetheless.
If you set a stretch goal, assign the number but be sure to ask the rep to show you her plan for achieving the goal.
- Set Activity Goals. Setting revenue and product mix goals is not enough. These goals tell you where you want to go, but they don’t tell you how to get there.
Sales activities (phone calls, emails, meetings, presentations, proposals, etc.) get you to where you want to go. Reps need to set specific activity goals and measure performance precisely by them.
Your sales reps’ territory plans must include weekly activity goals for contacting prospects and existing customers.
- Schedule Monthly Reviews. It’s critical for you to meet with each rep monthly to review his or her progress against the territory plan. Focus not only on revenue but on sales activities. Are your reps having enough meetings with the right people? Have they defined (and scheduled) next steps for pursuing every pending deal?
Territory plans are road maps your sales reps must use to attain their goals. They show you and your reps where they are going and how to get there. Finally, by conducting regular plan reviews, you can identify if a sales rep is off course early and help him adjust his plans to ensure he reaches his goals.