Establish a New Sales Territory
Considering expansion into a new territory is a complex undertaking; it requires foresight and significant planning to ensure that your goals are realistic, that you create an efficient use of employee and financial resources and finally, that you have identified your competition and your target market in both size and potential opportunity.
Steps
- Do some planning. First and foremost is the geography itself: looking at the physical size of both the territory and the cities and towns that make up that territory will have a significant impact on the market potential. Whether you sell to businesses or individuals, you must look at demographics. Poorly aligned territories can cause lost clients, low morale and squandered resources. The following is a list of suggested steps to consider and questions to ask yourself:
- Study the competition
- Procure a database of companies that fit your ‘ideal’ customer profile
- Prequalify the list to identify companies that have a need for your product / service to evaluate the market potential
- Read the article Build a Highly Targeted Prospect List to learn more about prospect prequalification
- Be strategic in meeting revenue goals in defined target area’s first (larger cities for example) then gradually expanding out across the new territory
- Prequalify the list to identify companies that have a need for your product / service to evaluate the market potential
- Develop realistic financial projections relating to start up and carrying costs
- Under ideal circumstances, how long would you anticipate having to finance an expansion before you see a modest return on investment
- Do you need to invest in a satellite office with staff or, can you have existing sales people travel in the mid-short term until a small customer base is established? Alternatively (and depending upon the type of business you plan to expand), can you hire a rep in the new territory who can initially work from home?
- Collect sufficient data. You may want to consider investing in a sales territory alignment and optimization software solution. At one time, only large nationals and multinationals had access to this level of information however, there are many very reasonable priced versions available in the market today. They can help you very quickly and efficiently determine how and where your sales staff should be deployed to maximize territory coverage. Whether you balance territories based on the number of customers, sales volume, sales potential, workload or other available data, they are designed to eliminate much of the guesswork. Some of the key benefits are:
- Match sales coverage to market opportunity
- Rapidly respond to market or organizational changes
- Lower the cost of selling by reducing travel time and associated travel expenses
- Increase equity, fairness and morale among your sales team, leading to lower turnover and greater selling enthusiasm
- Whether or you elect to invest in a territory alignment and optimization software solution or not,it is critical that you do as much research as possible into your target territory as possible.
- Consider retaining a professional telemarketing firm in the short-mid term to quickly establish your presence in the marketplace. You can reduce a sales teams ramp up time from several months to literally weeks:
- Improves sales force productivity and efficiency
- Creates a competitive line of attack that increases market awareness and ultimately drives revenue growth quickly and efficiently
- Expands your sales pipeline and increases your sales conversion rate through a consistent appointment setting strategy
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