With sales teams spanning across regions and markets, it is impossible to manually offer granular oversight over individual quotes and sales territories. However, ineffective oversight can degrade the quality of your overall sales performance, preventing your employees from delivering their maximum potential.

At Canidium, we educate clients on software tools they can use to solve business challenges. Our team of implementation experts applies advanced solutions to unique challenges like territory and quota management.

This article explains how to improve your sales performance with better team oversight. To give you a complete understanding, we will go over the following topics: 

• What is territory management?
• What is quota management?
• The ten problems with manual territory and quota (T&Q) management
• Improving sales performance with T&Q tools

What is Territory Management?

Territory management involves dividing your sales geography into recognizable regions to ensure your sales team covers the entire market effectively. You assign specific territories to your salespeople, allowing them to focus on designated areas, and their commissions are typically tied to sales within these territories. 

The primary goal of territory management is to provide good market coverage and avoid overlapping or neglected areas. You can define territories by geography, product lines, or customer segments. For instance, one salesperson might handle all clients in a specific region. At the same time, another manages sales for a particular product line across multiple areas. Effective territory management tools allow you to make dynamic adjustments, such as adding a new customer to a salesperson's territory on the fly, ensuring flexibility and responsiveness to market changes.

What is Quota Management?

Quota management involves setting sales targets for your sales team, which can be approached in two primary ways: top-down and bottom-up. In the top-down approach, you divide a predefined sales target (e.g., $1 million) among your sales team members, giving each a specific quota to achieve. 

In contrast, the bottom-up approach assesses each salesperson's past performance and potential to set individual quotas. For instance, if a team member made $160,000 in sales last year, you might increase his quota to $200,000 based on their performance and potential. The goal of quota management is to ensure that sales targets are realistic yet challenging, motivating your sales team to achieve their best while aligning with your company's overall sales objectives. Integrating these quotas into compensation plans helps accurately track performance and incentivize your sales team.

10 Problems With Manual Territory and Quota (T&Q) Management

Recent research finds that 69% of B2B sales reps report not having enough prospects in their pipeline to meet their current quota. This figure explains why so many sales reps fail to meet their quotas. In fact, in 2018, it was reported that 57% of sales reps—a majority—did not meet their quotas. 

The harsh reality is that poor quota setting can significantly impact your sales team. For instance, if quotas are set unrealistically high, your team can become demotivated, feeling their targets are unattainable. Conversely, if quotas are too low, your salespeople might become complacent, achieving their targets without pushing themselves.

Similarly, poor territory management can have several negative impacts on sales. Firstly, it can lead to inefficient resource allocation. If your sales territories are not well-defined, you might find that some regions are oversaturated with sales efforts while others are neglected. For instance, salespeople might overlap in certain areas, wasting time and resources, while other potential markets remain untapped.

Secondly, poor territory management can reduce sales performance. Without clear boundaries, sales teams might lack focus and direction, leading to missed opportunities and lower overall sales. For example, salespeople might spend too much time on less profitable clients because they are unsure where to concentrate their efforts.

To fully understand how ineffective territory and quota planning can impact your sales, here are the ten most common problems you see as a result:

1. Inefficient Resource Allocation: Sales efforts might be concentrated in certain areas while other regions remain under-served. At the same time, you may experience a misalignment of salespeople's strengths with their assigned territories or quotas.
2. Reduced Sales Performance: Poorly defined territories can lead to overlapping efforts or missed opportunities. Unrealistic quotas can also demotivate sales teams, leading to lower productivity.
3. Inconsistent Customer Coverage: Inconsistent or poorly managed territories can result in some customers receiving too much attention. In contrast, others are neglected, resulting in lost sales opportunities and dissatisfied customers.
4. Compensation Issues: Salespeople might be unfairly compensated if territories are not equitably assigned.
5. Difficulty in Performance Tracking: Limited T&Q management can make it hard to track and measure sales performance against goals accurately. This poor visibility makes it challenging to identify which areas or salespeople are underperforming and why.
6. Strategic Misalignment: Without proper T&Q management, aligning sales activities with the company's strategic goals can be difficult. As a result, your company will see inefficient targeting of high-potential markets and customers.
7. Lack of Flexibility: Static or inflexible territory assignments can prevent quick adjustments to market changes or emerging opportunities. Dynamic reallocating territories and quotas based on real-time data in this business environment become challenging.
8. Sales Team Frustration: Salespeople may become frustrated if they feel their territories or quotas are unfair or unmanageable. This issue leads to high turnover rates, which can be costly regarding resources and disruptions.
9. Suboptimal Customer Relationships: Poorly managed territories can lead to inconsistent customer interactions and weakened relationships. This can cause difficulty in maintaining a robust and consistent presence in all critical regions.
10. Data Management Challenges: Inefficient tracking and reporting of sales activities and results makes it impossible to effectively integrate T&Q data with other business systems for comprehensive analytics.

Improving Sales Performance With T&Q Tools 

Integrating territory and quota management provides several key benefits, enhancing your sales operations' efficiency and effectiveness. By combining these two critical components of sales planning, you can streamline operations, improve resource allocation, and ensure that your sales team is motivated and fairly compensated. 

The benefits of integrating T&Q management tools can significantly increase your revenue. Optimizing territory planning results in a 2-7% increase in sales without additional resources or strategy alterations. Although, to understand thoroughly the impact of territory and quota planning tools, here are the most important benefits you can expect:

Streamlined Operations

Integrating territory and quota management simplifies assigning territories and setting quotas. This integration lets you quickly define, assign, and adjust territories while setting and managing quotas. For example, you can create and import territories into your compensation tool, ensuring seamless alignment between sales regions and performance targets. 

A unified system lets you easily track and update territories and quotas as needed, ensuring your sales strategy remains agile and responsive to market changes.

Enhanced Sales Performance

With integrated T&Q tools, you can more effectively motivate your sales team. Properly defined territories and realistic yet challenging quotas drive salespeople to achieve their targets. This leads to improved sales performance as salespeople are clear about their goals and the areas they must focus on. For instance, achievable quotas encourage salespeople to work harder, knowing their efforts will be rewarded.

Additionally, by clearly explaining salespeople's territories and quotas, you reduce ambiguity and enhance their ability to effectively plan and execute their sales strategies. This clarity fosters a competitive environment where each team member is motivated to excel.

Better Resource Allocation

Integration ensures that resources are allocated efficiently. Salespeople can focus on specific regions or product lines without overlap, reducing wasted efforts and covering all market opportunities. This strategic allocation of resources helps maximize sales coverage and potential. 

You can optimize your team's productivity by avoiding territory overlaps and ensuring each salesperson has a transparent and manageable area of responsibility. Furthermore, with a well-defined territory structure, you can identify under-served markets and adjust your strategy to cover these areas, ensuring comprehensive market penetration and better resource utilization.

Improved Compensation Accuracy

When territory and quota management are integrated, the compensation calculations become more accurate and transparent. Sales performance is tracked against clearly defined quotas within specific territories, making it easier to calculate commissions and bonuses. This transparency reduces disputes and ensures salespeople are fairly compensated for their efforts. 

Dynamic Adjustments

Integrated tools allow for dynamic adjustments to territories and quotas. Suppose market conditions change or new opportunities arise. In that case, you can quickly reassign territories and adjust quotas to reflect the new reality. 

For instance, adding a new customer to a salesperson's territory on the fly ensures they can respond to opportunities promptly. This flexibility is crucial in a rapidly changing market environment, allowing your sales team to remain agile and proactive. By swiftly adapting to new information and market trends, you can maintain a competitive edge and better meet customer needs.

Strategic Alignment

Integrating territory and quota management aligns sales activities with the company's strategic goals. This ensures that sales efforts are focused on high-potential markets and key products, supporting broader business objectives. 

You ensure that every sales team member works towards common goals by tying individual sales targets and territories to the company's strategic plan. This unified approach helps to streamline efforts across the organization, foster collaboration, and ensure that resources are deployed where they can have the most significant impact.

Driving Sales With Improved Territory and Quota Oversight

Territory and quota management are crucial to effective sales planning and essential for driving sales performance and achieving strategic business goals. Territory management involves dividing sales geography into recognizable regions, allowing salespeople to focus on specific areas, and ensuring comprehensive market coverage. This reduces overlap and neglected regions, optimizing resource allocation and enhancing sales performance. On the other hand, quota management involves setting realistic yet challenging sales targets and motivating the sales team to achieve their best.

Integrating territory and quota management provides several key benefits, such as streamlined operations, better resource allocation, and improved compensation accuracy. Combining these two elements allows you to dynamically adjust territories and quotas in response to market changes, ensuring strategic alignment with overall business objectives. This integration fosters a competitive and motivated sales environment, enhances customer relationships, and improves sales efficiency.

Now that you have a clearer understanding of the benefits of territory and quota tools, your next step is to learn how to implement them effectively. Read on to learn why your implementation partner selection matters just as much as your choice of software solution.