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Using Data to Redesign Sales Territories

Traditionally, territory design began by drawing boundary lines on a map and then looking at the opportunity within each geographic area. With the availability of advisor and office-level data and advances in data science and technology, it is now possible to more precisely design territories to optimize opportunity.

To truly optimize sales territories, a collaboration of business experts (executives), data and data science experts (business intelligence and data scientists) and those that can meld these worlds into action (project managers) can provide benefits beyond traditional territory design.

In our "Driving Growth with Data-Driven Territories: Setting up Your Sales Team for Success" report we provide recommendations for asset managers looking to improve strategic alignment, reduce the costs of selling, reduce opportunity loss associated with unbalanced coverage, improve the effectiveness of territory sales teams, or improve retention, recruiting and compensation by providing fairness in opportunity available to sales teams. 

Would designing data-driven sales territories benefit you?

Asset managers looking to yield these benefits should consider running a formal, data-driven territory optimization exercise if:

  • You’ve never run a formal, data-based optimization process. 
    To understand how much improvement could be achieved in your sales territories, running a data-driven territory redesign can establish a baseline. It can help to understand how much more available opportunity could be captured by making small adjustments to territory borders. It can also systemically balance drive times within territories or help an asset manager understand what the optimal number of territories should be.
  • A paradigm shift in the industry has impacted revenue, sales or the balance of opportunity across sales territories. 
    For example, there has been a major increase in the use of passive investments, which has an impact on whether financial advisors will take meetings with wholesalers. Aligning territories to ensure each has enough advisors where the sales teams can have influence can help those teams meet sales objectives.
  • Territories are imbalanced. 
    If some of your territories are producing far more than others or if you aren’t winning or retaining business because the sales team doesn’t have coverage capacity, a data-driven redesign can vastly improve the balance of production by designing territories to achieve more balance in the opportunity available or to better align the covered advisors in a territory with the skill set of the sales team.
  • Territories are inefficient or have poor ROI.
    If the effort or cost of selling in some territories outweighs the return on that effort, it has an impact on ROI. Being able to mathematically optimize territories to reduce costs to increase the efficiency of sales activities can benefit the bottom line.
  • You’re finding it difficult to gain a competitive advantage in some territories.
    It is possible, using data science, to create territories that better distribute advisors where your firm has a real competitive advantage (your products are competitive and desirable).
  • You have changed or plan to change sales models.
    Many firms have been experimenting with new sales roles in an attempt to find a more efficient strategy in the changing market. If your firm is introducing hybrid or digital coverage in sales territories, data-driven optimization can produce territory sets with separate criteria for traditional wholesaling and hybrid wholesaling to maximize the impacts of these roles.
  • Your sales force has changed.
    Firms that need to consolidate sales forces after a merger or acquisition, or those that merely plan to increase or decrease headcount in the sales organization, can benefit from optimization because it helps to optimize the deployment of those resources to maximize their impact.
  • You have channelized, de-channelized or added new channel(s).
    Likewise, if the coverage model for the sales organization is changing, a data-driven optimization exercise can help create territories that are specific to a given channel or combination of channels. This allows flexibility in the coverage and engagement for each channel.

Data-driven optimization of sales territories provides benefits beyond what traditional territory design and alignment yield, putting asset managers that have not evaluated their territories using data science at a distinct disadvantage. Optimized territories can mitigate the impact of margin compression, rationalization efforts and changes in advisor business models by focusing the efforts of the sales teams on high-value, high-opportunity advisors they can influence.

For more information about who should be involved in data-driven territory optimization, to understand the flow of such an exercise, or to better understand how optimization software works, check out our "Attributes of Top Performing Sales Territories" research report.

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