What is territory management in Salesforce? A complete guide by Avenga

Strategically aligning sales territories with business goals through Salesforce.

Salesforce is a global leader in the Customer Relationship Management (CRM) market, with a presence that extends to more than 150,000 businesses worldwide. In the 2022 fiscal year, Salesforce generated a staggering $21.25 billion, capturing a 23.8% share of the CRM market, more than its four leading competitors combined. With over 72,000 employees globally, Salesforce continues to innovate and expand its reach. Such innovation is particularly evident in the realm of sales territory management.

Managing sales territories is now a crucial part of modern business. Salesforce’s territory management is a flexible tool that helps companies plan and organize their sales areas so as to meet their business goals. It provides everything essential  to make your sales work more effective, keep customers happy, and make the sales process smoother.

This piece talks about the ins and outs of Salesforce’s territory management. We’ll address what it is, why it is important, how to use it, and what use cases highlight its importance. So let’s start!

Common mistakes in building a sales process

Building a sales process is an integral aspect of any business, but it’s not without its pitfalls. Many organizations fall into a number of common traps that can hinder their sales efforts. Understanding these mistakes and how to avoid them is essential, and Salesforce’s territory management offers a robust solution to these challenges.

1. Lack of clear definition and alignment: Without a clear definition of territories and their alignment with business goals, sales efforts can become scattered and ineffective. Salesforce’s territory management allows for the precise management of accounts and opportunities, ensuring alignment with the company’s objectives.
2. Inefficient resource allocation: Misallocation of resources can lead to overserving some areas while neglecting others. Salesforce’s flexible system enables businesses to create different sales areas or territories, ensuring productive use of their resources.
3. Failure to adapt to market changes: A rigid sales process that doesn’t adapt to market changes can quickly become outdated. Salesforce’s territory management’s lifecycle stages (Define, Review, Deploy, and Realign) ensure a sales plan that can adapt promptly to changes in the business world.
4. Poor collaboration and communication: Lack of collaboration among sales teams can lead to confusion and missed opportunities. Salesforce’s collaboration tools foster a cohesive and effective sales effort.
5. Ignoring customer needs and preferences: Failing to align territories with customer needs can lead to customer dissatisfaction and lost sales. Salesforce’s territory management allows for customization based upon factors like zip code, industry, revenue, and more, which all establish a customer-centric approach.
6. Overemphasis on closing deals: Focusing solely on closing deals without considering the right customer fit can lead to low-value customers. Salesforce’s territory management ensures a focus on attracting the right customers, while aligning sales efforts with specific strengths and expertise.
7. Lack of strategic analysis and distribution: Without strategic alignment and fairness in account distribution, the sales process can become chaotic. Salesforce’s territory management acts as a business instrument that provides equal conditions and maximizes effectiveness.

Keeping all this in mind, Salesforce’s territory management presents itself as a remedy for a misguided sales process. By leveraging Salesforce’s agile and adaptable approach, businesses can avoid common mistakes in building a sales process and create a successful sales environment.

What is territory management?

Salesforce’s enterprise territory management is a dynamic solution that enables enterprises to precisely manage accounts and opportunities. It provides additional capabilities over the original territory management system by leveraging criteria such as zip code, industry, revenue, and/or custom factors.

Salesforce’s flexible system allows companies to create different sales areas, or territories, that suit their specific prerequisites. These territories can be based upon locations like cities, countries, or types of industries. By focusing on these areas, sales teams can work more efficiently and effectively.

Businesses can use Salesforce’s territory management to ensure that their sales areas match their overall targets, as it helps them focus on the right locations/accounts so they use their resources wisely. The result is a sales plan that can adapt rapidly to changes in the business world, making the company’s sales efforts more focused and powerful.

Territory management lifecycle

The territory management lifecycle in Salesforce is a well-organized process that leads the development, optimization, and ongoing evolution of sales territories. It consists of the following stages:

1. Define. Start by crafting territories using types and models, and customizing them to fit your unique business conditions. Consider it as your laying the foundation through defining territories based on customer demographics or other specific criteria.
2. Review. Next, put on your analytical hat and dive into custom reports and tools. Evaluate the territorial model, while ensuring optimal coverage and alignment. This is about fine-tuning the engine before hitting the road.
3. Deploy. Time to launch! Activate the best-suited model and assign territories accordingly. It’s like setting sail with suitable territories targeting the right markets.
4. Realign. The journey progresses. Continuous assessments and modifications are crucial. Adapt to changing business goals and market conditions just as a skilled captain adjusts the sails to catch the changing winds.

In simple words, imagine a company launching a new product targeting a specific demographic. With Salesforce’s territory management, they can define, analyze, activate, and realign territories to arrange a perfect fit within their strategy.

What sets Salesforce’s enterprise territory management apart is its versatility. Unlike the rigid Salesforce role hierarchy, it offers flexibility, allowing users to be assigned to multiple territories at different levels of the hierarchy. It is a complex yet adaptable approach that accommodates the unique needs of modern sales organizations.

Why territory management?

Territory management is a strategic compass that guides sales teams to success. It is much more than just managing sales territories. It is about creating a pleasant and useful sales atmosphere that aligns with the firm’s bottom line. This is why:

1. Improving sales team morale

Imagine a team of sales reps where opportunities are unfairly distributed, which leads to conflicts and dissatisfaction. Ensuring an equitable distribution of accounts and opportunities fosters a positive work environment that enhances team morale, while preventing strife and frustration .

2. Enhancing sales and expanding customer base

Territory management aligns sales representatives with their specific strengths and expertise. Such a strategic alignment is akin to finding the perfect match, unlocking enhanced sales performance, and enabling the company to reach a broader customer base.

3. Avoiding loss of sales

A poorly balanced territory can lead to neglecting certain areas while overserving others. Territory management identifies and rectifies these imbalances, ensuring that all regions receive the appropriate attention and resources, thus avoiding lost sales opportunities.

4. Dividing accounts by geography

Territory management is not limited to geographical divisions such as zip codes. It’s a flexible approach that aligns with business’s specific requirements and purposes. Clients can customize territory alignment to any account’s attributes, such as industries or turnover. This ensures that territories are mapped by location and strategically organized to reflect the actual market conditions and business objectives.

5. Team cohesion, morale, and increased sales

Territory management is like the lubricant in a well-oiled machine, ensuring all the parts are working harmoniously. By fostering team cohesion, motivation, and clear rules for success, it drives sales and profitability, thus creating a more potent and successful sales environment.

6. Avoiding conflicts and inefficiencies

Ever had two sales reps from the same company call you, creating confusion? Territory management helps avoid these pitfalls, ensuring proper account distribution and avoiding lousy customer experiences. Essentially, with Salesforce’s territory management calls, different reps will not call the same client consequently wasting precious time and resources.

7. Strategic analysis and distribution

Territory management is more than just dividing accounts; it’s about strategic alignment and fairness. By analyzing efforts, ensuring proper account distribution, and leveraging the strengths of sales professionals, it acts as a business instrument that provides equal conditions and maximizes effectiveness.

Businesses may build a symphony of success in their sales environment by knowing and using the potential of territory management. It is more than simply controlling areas; it is also about coordinating success.

Sales territories optimization

Sales territory optimization is critical to modern sales management within the Salesforce ecosystem. It involves the strategic alignment and allocation of sales resources to make sure that territories are balanced and aligned with business objectives.

The optimization process is not a one-time effort, but a continuous process that adapts to changing market conditions and business needs, and reflects Salesforce’s commitment to agility and responsiveness.

Advantages of salesforce territory optimization

Salesforce territory optimization offers many benefits that enhance the efficiency and effectiveness of sales operations. Here’s a look at some key advantages that can be realized through the strategic deployment of sales resources within the Salesforce platform.

Improved coverage

Businesses can ensure that all regions are adequately covered. It means that no area is over saturated or overlooked, leading to a more efficient allocation of resources and better customer engagement.

Cost reduction

Optimization allows for the strategic deployment of sales resources, ensuring that efforts are focused where they will have the most impact. Such a targeted approach can lead to significant cost savings, as resources are not wasted on areas that are already well-served or do not align with business goals.

Enhanced customer service

Businesses can provide more personalized and compelling customer service by aligning territories with customer demands and market realities. Sales representatives can focus on their assigned geographic territories’’ specific needs and opportunities, leading to more meaningful customer interactions and stronger relationships.

Collaboration and forecasting

Tools like Chatter enable collaboration among sales teams to share insights and strategies. Such a degree of improved collaboration can lead to more cohesive and effective sales efforts. Additionally, specific territory forecasts allow for more accurate planning and resource allocation, ensuring sales efforts align with potential opportunities.

Tools and techniques for Salesforce territory optimization

Salesforce provides a variety of tools and techniques to facilitate Salesforce territory optimization. These functionalities enable businesses to focus their sales efforts on the most promising prospects, assess performance, and foster collaboration among sales teams.

Filter-based opportunity territory assignment

This functionality allows for the assigning of opportunities to sales managers based on specific criteria, ensuring sales efforts focus on the most promising prospects.

Territorial reports

These reports provide insights into the performance of the different territories, allowing for ongoing assessments and realignments as necessary.

Collaboration tools

Salesforce collaboration tools enable comprehensive communication and coordination among sales teams, fostering a more cohesive and potent sales effort.

Salesforce’s territory optimization is an essential element of effective sales management. Strategic alignment, focused resource allocation, and enhanced tools and procedures may help businesses develop more adept and productive sales territories.

The optimization of sales potential results in advantages such as greater coverage, cost savings, and improved customer service, all of which contribute to a more vital and more impressive sales organization.

Setting up territories in Salesforce

Setting up territories in Salesforce is critical to creating a solid sales plan. It entails establishing, organizing, and controlling territories to meet the company’s sales targets.

Businesses may build a personalized and practical approach to territory management by using the numerous tools and functions inside Salesforce, to ensure that territories match market realities and corporate objectives.

Creating and assigning territories

Setting up and assigning sales territories in Salesforce is a systematic process that involves defining, organizing, and managing territories to align with the company’s sales strategy.

This process is facilitated through various tools and functionalities within Salesforce, allowing for a customized and active approach to territory management.

Defining territories

In Salesforce, territories aren’t arbitrarily defined. Instead, they are carefully crafted and then linked to assignment rules, offering a targeted and agile approach to managing sales territories.

• Hierarchies. The territory hierarchy displays the structure and organization of the territories. It serves as a framework for interaction and provides a clear and organized view of the entire territory landscape.
• Types and models. While hierarchies and rules form the core, territories can be organized and tested through types and models. The ‘Type’ serves as an attribute of a territory and functions like a dropdown list for categorization. On the other hand, the ‘Territory Model’ acts as an overarching framework that encompasses both hierarchies and assignment rules. Only one model can be active at a time, although organizations can work on a ‘Planning’ model’ while keeping another model active.

Integrating hierarchies with assignment rules in Salesforce provides a tailored approach to territory management. The method establishes that territories are strategically aligned with sales resources, accommodating the unique necessities  and objectives of the organization while eliminating ambiguity in the process.

Territory hierarchies and dashboard reports

Territory hierarchies visually represent the territory hierarchy and structure, allowing easy navigation and management.

• Interaction. The hierarchy in Salesforce allows for intuitive interaction with territories. You can create, update, and remove territories as needed, providing a flexible approach to managing your sales landscape.
• Assignment rules. Within the hierarchy, rules can be mapped to align territories with specific criteria on the Account object. This includes zip codes, revenue thresholds, or other custom attributes. Unlike other systems, Salesforce makes sure that  these rules are confined to the account object, so as to maintain clarity and precision.
• Dashboard reports. Customized dashboard reports offer insights into a territory’s performance, including metrics on sales’ performance, customer engagement, and resource allocation. These reports, such as ‘Territories with Assigned Accounts,’ ‘Territories without Assigned Accounts,’ ‘Territories with Assigned Users,’ and so on, facilitate continuous evaluation and fine-tuning. They ensure that territories align with organizational objectives by providing insights into account and user assignments, among other metrics.

Territory hierarchies and dashboard reports in Salesforce provide a visual and analytical perspective on territory performance. These tools enable easy navigation, management, and optimization, thus contributing to a more effective sales strategy.

Example: creating a geographic-based territory

Think about a company that wants to divide its sales areas by parts of the country. They make four extensive regions: East Coast, West Coast, Midwest, and South.

• Big regions. These are the main areas, like the East Coast or the Midwest.
• Smaller areas. Inside each large region, they can make smaller areas based on states or cities.
• Zip Code rules. Zip-based assignment rules are applied specifically to lower-level territories or smaller areas. The accounts in these smaller territories are then automatically rolled up to the top-level territories, like big regions, due to the ‘Grant Access Using Hierarchies’ feature in sharing settings.
• Checking performance. This uses special reports to see how each area is doing and to make changes if needed.

So, If you’re located in a specific East Coast zip code, you’ll be connected with the East Coast sales team. Regional managers are automatically granted access to all subordinate territories, ensuring a streamlined approach to customer engagement. It’s similar to having a map that shows the firm and its sales representatives where to go and who to speak to.

Salesforce territory management use cases

Salesforce’s territory management is essential for firms who want to align and manage their sales territories effectively. The following examples demonstrate how various Salesforce’s territory management tools and strategies may improve productivity, security, and responsiveness in multiple sales and territory planning elements.

Leveraging hierarchy in territory management

In territory management, role hierarchy structures access to data within an organization, defining the levels of access based on roles. For instance, a regional manager overseeing a particular territory might have access to all accounts in that region, while a sales representative only sees accounts they are responsible for. Such hierarchy makes certain that employees have the appropriate permissions, fostering efficiency and security.

This approach is crucial for maintaining data security and clarity, preventing unauthorized access, and ensuring compliance with regulations. The company creates a secure and efficient workflow by limiting access to sensitive information.

Utilizing territories with forecast managers

Forecast managers play a vital role in overseeing sales predictions within specific territories. They certify that the sales data from each region is accurately included in the overall company forecast.

For example, if the chosen territory is in need of a forecast manager. Its sales data might be included in the overall company forecast,  however, the absence  leads to inaccuracies and potentially misguided business decisions.

Assigning forecast managers to territories confirms that all regions are accounted for in the sales forecasts. This practice enhances the accuracy of sales predictions, allowing the company to plan and strategize effectively. It aligns the sales efforts with the company’s objectives and provides a comprehensive market view, which is essential for informed decision-making and resource allocation.

Defining named accounts accurately

Named accounts are specific customer accounts assigned to individual sales representatives based on predefined criteria. It assures that the right representative is handling the proper account.

In the context of territory management, named accounts are not directly assigned to individual sales reps. Instead, both the account and the sales rep are assigned to a specific territory. This could include a specialized territory for named accounts, thereby avoiding conflicts that could arise from geographical territory assignments.

To illustrate, a tech company might assign accounts with a specific interest in cloud computing to a representative specializing in that product. This approach ensures the customer is matched with a representative who understands their needs and interests.

Accurate assignment of named accounts leads to a more powerful sales process. It makes sure that certain customers are matched with representatives who have the relevant expertise.

Improving performance with granular locking

Granular locking is a technique that locks only the specific parts of a data table that are being modified rather than the entire table. This phenomenon allows multiple administrators to work on different parts of the data simultaneously without any conflict.

For example, while one administrator updates a chosen territory, another can simultaneously work on a different territory. They can both make changes without interfering with each other’s work.

Respectively, this approach streamlines operations and reduces delays by allowing multiple tasks to be performed simultaneously. In the context of territory management, it means that changes can be made quicker, keeping the system agile and responsive to the needs of the business.

Salesforce’s territory management offers a robust and adaptive foundation for contemporary enterprises via the smart deployment of role hierarchies, forecast managers, named account definitions, and granular locking. The use cases listed above show the system’s adaptability and strategic significance. They emphasize the phenomenon’s relevance in developing a simplified and successful sales process that corresponds with an organization’s objectives.

Conclusion

Salesforce’s territory management is a way to ensure your sales efforts match what the market requires, and what your company wants to achieve. Businesses can respond quickly to changes and grow more efficiently by carefully planning and adjusting sales territories. It’s a smart way to keep up with the fast pace of today’s business world.

Salesforce helps organize sales territories and promotes team cohesiveness, motivation, and higher sales. It is a strategic method with significant advantages like higher morale, greater sales, and increased profitability. Contact us to capitalize on the full potential of the Salesforce platform and explore its unique solutions.