The Complete Guide to Sales Territory Plans

by | Jun 8, 2022

Sales territory planning and management require a number of components to snap into place. Of course, that doesn’t just happen. Managers and administrators work together to build the best plan for success. Of course, any good sales territory plan incorporates commissions and incentives to drive sales performance.

Incentive packages fit into the larger sales territory strategy but they also need careful organization. Commissions must reflect the competitive landscape while taking into account sales opportunities, prospects, and regional cost of living. Bonuses and other incentives demand similar consideration.

Image of cyclists biking uphill to demonstrate the potential uphill battle with limited prospects in some sales territories

As you plan commissions for sales territories, consider salespeople who may have an uphill battle with a smaller pool of prospects.

If you’re in the process of planning sales compensation plans for territory salespeople, you should examine a few things. Read on as we discuss the important elements of commissions and incentives for sales territories.

How Do You Define the Territory?

Most sales organizations consider territories to be geographic locations. However, others may organize territories by types of accounts, industries, or the distribution of customers. Knowing how you’ll define the territory is a good place to start when considering incentives. That’s because different types of accounts require different tasks and practices.

If a territory covers a certain geographic area, a salesperson spends a lot of time traveling from place to place. However, if it’s focused more on industry, that salesperson likely attends a lot of industry events. The way your salespeople find their prospects within a territory will inform how they need to be incentivized.

How Well-Balanced Are Workloads?

When territories are split between salespeople, workloads occasionally vary. This often happens when territories are set for a long period of time. It’s possible for one territory to grow while the other wanes.

Managers and administrators may need to recalculate that allocation or develop incentive packages that address the disparity. Additionally, if it isn’t possible to reallocate extra work, it makes sense to adjust quotas and goals.

How Much Opportunity Is There in a Given Territory?

Organizations often use commissions and incentives to address challenges. One such challenge is diminished opportunity and prospects. The scenario where a salesperson faces fewer potential buyers due to financial downturns or another condition forces them to work a little harder.

Image of a map of the United States with a push pin in a state to pinpoint specific sales territories

If there’s a smaller pool of prospects in a particular territory, it requires a salesperson to hustle to be successful. Commissions and incentives reward that hustle. Managers who incorporate these types of incentives will motivate sales teams even as they have an uphill battle.

How Are You Measuring Success in Each Territory?

The key performance indicators used to measure success directly impact commission distribution. Knowing how you’ll measure performance is a very important element of this territory sales commission plan. As sales reps hit those milestones, they’ll feel encouraged by the incentives that come along with them.

No matter how you’ve organized your sales territory commissions, Core Commissions can automate it. Contact us for a demo and we’ll show you how easy and affordable it can be to simplify territory commission management.

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