In the ever changing world of indirect sales, where partner business priorities are changing to be more services orientated and recurring revenue driven, understanding the current and future context of the partnerships in the territory is the key to achieving the desired revenue target.
Therefore, effective territory planning is more than just an annual strategic exercise. It’s the primary activity that guides indirect sales teams towards achieving their quarterly and annual goals, maximising revenue, and fostering long-lasting relationships with partners.
The methodology is a simple 4 step process, and when followed up with regular reviews will help Partner Account Managers better manage their time and achieve their sales targets.
- Where am I now?
- Current Performance: Assess your current sales performance, market share, and partner engagement levels. What is the gap between the current run rate versus the desired exit run rate?
- Partner Base: Analyse your existing partner base, identifying key accounts along with growth or development opportunities.
- Competitive Landscape: Understand the competitive dynamics in your territory, including competitor strengths and weaknesses (or profit models) within the targeted partners.
- Where do I need to be?
- Sales Targets: Set ambitious yet achievable sales targets per partner, aligned with overall company objectives of the total territory target. Have a territory “overlap” of around 10-15% as a safety margin.
- Market Penetration: Identify untapped market or vertical segments and explore opportunities for growth within the partner’s existing account base. Think cross selling and upselling.
- Partner Development: Define goals for partner recruitment vs development and the necessary enablement resources available.
- Who am I going to do it with?
- Partner Selection: From step 1, narrow down the list of partners that best fit the partner capabilities and customer relationships required for success. Identify any potential new partners that complement your business strategy, remembering new partners often take multiple quarters to reach full potential.
- Partner Capabilities: Assess partners’ capabilities and apparent gaps. Build an engagement map of who to focus on within each partner.
- Collaboration: Develop strong collaborative relationships with partners based on mutual trust and shared business goals. How will the partner make money by working with you?
- What am I going to do to get there?
- Sales Strategies: Develop targeted sales &/or account specific strategies around the joint business goals from step 3 focused on the agreed customers, markets or vertical segments.
- Partner Enablement: Provide partners with the necessary training, tools, and resources to succeed. This needs to be across all relevant, sales, marketing, technical, administration and management teams.
- Performance Management: Select 3-5 productivity based partner performance metrics to track progress. I.e. demonstrations/proof of concepts completed. Identify areas for improvement, and reward successes toward the agreed sales target.
The Importance of Regular Territory Reviews
A well-crafted territory plan is essential, but it’s not a one-time event. Regular reviews are crucial to ensure that your plan remains aligned with changing market conditions, evolving partner and customer needs, and of course emerging trends. Here are some key aspects to consider during territory reviews:
- Performance Analysis: Evaluate overall territory sales performance against targets before conducting any individual partner reviews. Go back and re-analyse/review steps 1-4.
- Review Period: Most partners do not work on a quarterly basis, and many do not need a formal review every few months. Monitor the metrics and conduct a review 2-3 times a year.
- Meaningful Reviews: Ensure the key decision makers are in the review, and there is a pre-review agenda published. Reviews should be predominantly forward looking sessions.
- Market Trends: Cover any insights, research or information you have on industry trends, economic indicators, and competitive developments that align with the partner’s business focus. What is hype versus business reality? How does this impact the partnership?
- Partner Performance: Assess partner performance against the plan, identify gaps, opportunities for further growth, and address any challenges.
- Partner Feedback: Gather partner feedback to gain insights into what is going on with their customers’ needs and preferences.
- Plan Adjustments: Make necessary adjustments to your territory plan (time and resource allocation &/or partner focus) based on the findings of your review.
Benefits of Effective Territory Planning and Reviews
By investing in territory planning and regular reviews, as a Partner Manager you can reap numerous benefits, including:
- Increased Sales: A well-defined territory plan helps you focus your efforts on high-potential opportunities, rather than time wasters, leading to increased sales and revenue growth.
- Improved Partner Relationships: Strong partner relationships are essential for success in indirect sales. Effective territory planning and reviews help build trust, collaboration, and keep the focus on the mutual business benefit between partner and vendor.
- Enhanced Partner and Customer Satisfaction: By understanding your partners’ needs and providing tailored solutions, you can deliver better aligned partner experiences that foster loyalty.
- Optimised Resource Allocation: Territory planning helps allocate resources more effectively, ensuring that you and the channel team supporting you are focused on the most promising opportunities.
- Data-Driven Decision Making: Regular territory reviews provide valuable data and insights that will feed into your decision-making process.
In conclusion, territory planning is a fundamental aspect of indirect sales success. By following the four core elements outlined and conducting regular reviews, you can create a solid foundation for growth, strengthen partner relationships, and deliver exceptional value to your partners, and of course your managers!