Selling in a brand new sales territory can be intimidating, especially in the dental lab industry. From researching a new market to hiring a new sales team, it’s hard to know where to start and what to prioritize.
New sales territories can turn into huge sales engines and revenue generators for dental laboratories, but to reach that point, you need to work from a plan. This will allow you to test the waters and expand your dental labs team as needed.
In this guide, we cover the definitions you need to know, the benefits of sales territory management, the five steps to breaking into a new sales territory, and the sales territory management plan that will allow you to keep growing and scaling your denta labs sales impact with new territories.
Table of contents:
What is sales territory and sales territory management for dental labs
Benefits of sales territory management
Step 1: Define a new sales territory
Step 2: Create a sales territory plan
Step 3: Get to know the rules and regulations
Step 4: Assign sales reps to your new sales territory
Step 5: Hire a sales team for your new sales territory
Sales territory management plan and tools
What is a sales territory?
What is sales territory management?
The key definitions A sales territory is a geographical area assigned to a sales team or a specific salesperson. It consists of existing and potential customers and allows your sales reps to focus on a single market.
Common types of sales territories include cities, regions and countries. Sales territories can (less often) be based on criteria other than geography, including company size, industry, demographics or any segments you define.
Sales territory management is the process of setting up your territories and assigning your sales teams and/or reps to them in the most efficient way. It minimizes distractions that come with constant switching between geographies.
Instead, sales territory management helps your reps use their skills, expertise and resources to focus on the most valuable leads, prospects and customers.
Benefits of sales territory management Sales territory planning and management are crucial for any company that sells into multiple geographic areas. Here’s why.
Cover target markets strategically Cities, regions and countries can be dramatically different in the way people and companies explore and buy solutions for their needs and pain points. Lifestyle, income and the number of available options are just a few of the factors that influence this. If you don’t acknowledge each region is different, you’ll miss the chance to tweak and customize your approach for the best results. Sales territories will vary in:
Average deal size
The average length of the sales cycle
Number of touchpoints across the sales pipeline
Keywords and phrases people use to describe their needs and challenges, not to mention the needs and challenges themselves
Sales territory management allows you to plan for these differences and assign best-suited reps for each territory. It also helps you adjust the size of your sales force across territories so no team is ever underserved or overserved.
Maximize each rep’s time Sales reps spend almost two-thirds of their time on non-revenue-generating activities like repetitive admin tasks. If they’re doing this for a range of territories, and especially different time zones, their focus—and impact—suffers. With sales territory management, you can make sure sales reps don’t need to jump between vastly different types of conversations and sales objections.
Your reps will be able to double down on leads they know best, which will support them in hitting their quota and boost team morale.
Access powerful performance tracking and forecasting Instead of only looking at the big picture of your past performance, sales territories help you dive into specific segments to understand:
Types of sales strategies and techniques that worked well so you can double down on them
Activities that didn’t move the needle and need to be reevaluated and either improved or removed
Peaks and dips in sales during different seasons
You can use this data for more accurate sales forecasting, as well as to hire the best sales reps for a specific territory and in a timely manner.
Deepen customer relationships In-depth knowledge about a territory means your reps can customize their communication with leads and customers in that territory. Reps in charge of specific territories will help you build a strong local presence and lasting customer relationships, no matter your company size.
Breaking into a new sales territory can be intimidating. With the five steps below, you’ll simplify the process and focus on getting a sales territory plan off the ground. This will also give you lots of data to analyze so you can tweak and improve your strategy in the new sales territory.
Step 1: Define a new sales territory Start by defining what this new sales territory means for your company.
Is it a new city or county? A large part of a country? An entirely new country? A territory on a continent you don’t have a presence on yet? For example, a real estate agent might be currently serving one large city and want to break into two nearby cities. On another hand, a tech company with a significant presence in North America could aim to build a strong presence in Europe.
The great part is that this is completely up to you; one size doesn’t fit all. Once you identify the sales territory you want to break into, roll up your sleeves to research and define these specifics:
Ideal prospect. This might be identical to your current ideal prospect, but not necessarily as factors like language, culture, lifestyle and economy in the new territory might make the ideal prospect different than in your current territory.
Total addressable market (TAM). TAM includes all the prospects and customers that fit your ideal customer description; make sure there are enough prospects in this new area so you can estimate your potential market share and revenue opportunity.
Serviceable addressable market (SAM). SAM is the portion of the market you’re able to service based on your business model, your targets, geographical reach and specialization.
Serviceable obtainable market (SOM). SOM is the realistic fraction of your serviceable addressable market as it takes into account competitors you’re up against.
Competition. Companies already marketing to and serving your ideal prospects.
Territory quality. If any of your current or past customers happen to already be in the sales territory you’re breaking into, analyze their buying cycles, sales conversations and other details to learn what worked well in that territory.
Step 2: Create a sales territory plan Next, you need a plan of attack. A sales territory plan is the strategy your team will follow to fill their sales pipeline with enough leads to hit revenue targets.
Without a plan, you might waste time and budget. A strategic plan will help you maximize the impact of every rep and resource you have, and allow you to tweak your approach early if you notice the need for it. Your sales plan for the new sales territory should contain:
Revenue goal Start with revenue goals for the new sales territory. Since you don’t have past sales data from it, start lower than you would in a sales territory you already cover; you can always increase your goal later. Work backward from your revenue goal to reverse-engineer sales quotas and necessary sales activities.
Activity-based selling goals Activity-based selling is the approach to selling that focuses on the sales rep’s input, rather than the outcome. The goal doesn’t focus on the result, but on the process that leads to results. Your sales territory plan should outline the number of:
Prospects a rep needs to start a conversation with
Proposals that need to be sent
Follow-up calls and meetings
Use each rep’s past sales pipeline data to find a ballpark for these numbers.
For example, to close 10 deals in a month with a close ratio of 10%, the rep needs to send proposals to 100 qualified leads. If that rep turns 25% of all leads into qualified leads, you now know they need 400 leads in their pipeline every month to hit their goal.
From here, divide these numbers into daily and weekly activities.The focus is on the number of leads that enter the pipeline, not the revenue goal. By doing this, you can keep your reps motivated and focused with an achievable goal, despite the anxiety that inevitably comes with a new sales territory.
Supporting resources To help your reps organize their sales activities, build a library of resources that will allow them to streamline and simplify their sales activities. Use this list as a starting point and involve your sales reps in the process:
Summarize the ideal prospect. Build a document that lists all the parameters of an ideal prospect and allow your reps to build upon it as they learn more about the new sales territory
Establish a prospecting process. Use sales call planning to develop questions and checklists for researching and reaching out to the prospects
Write templates. Cold calling scripts and cold email templates can save your reps substantial time when contacting new potential leads
Step 3: Get to know the rules and regulations Before you start searching for and contacting prospects in your new sales territory, the crucial step is to research the legal side of selling in that city or country.
We’ve seen how dramatically a new law can impact the way we market and sell when GDPR came into play in 2018. If you’re expanding your business into EU countries, GDPR compliance would probably be your first order of business. But that’s not all you should take into account. Each new territory means there might be regulations around hiring, data protection, contracts with customers, consumer rights and more.
Rules around invoicing and payment accounts
Your obligations to the customer as a service or product provider
Required customer communication formats and notices
Consumer cancellation and refund rights
Legal setup for your company and all applicable taxes
Hiring regulations and labor rights
It’s worth noting that sales in highly regulated industries, like medical and pharmaceutical sales, require an even deeper dive into legal requirements.
Having this knowledge will allow you to equip your sales reps and make them confident and comfortable operating in a new sales territory.
Step 4: Assign sales reps to your new sales territory
You now have a plan in place with resources for sales reps and a legal setup to support it. Your next step is to assign each sales rep a territory they’re in charge of.