From Planning to Execution: A Comprehensive Guide to Pharma Sales Territory Management

Executive Summary: Pharmaceutical sales territory management involves strategically dividing the market into specific geographic or account-based regions to optimize sales efforts and revenue potential. This article explores four common ways to assign territories, key aspects of effective territory management, and actionable tips to enhance your pharmaceutical sales territory management strategy.

Territory management forms the backbone of pharmaceutical sales. It ensures that each sales rep covers their designated area efficiently, leaving no gaps or overlaps.

By tailoring their approach to each healthcare professional's unique needs and preferences, sales teams build strong relationships, provide valuable information, and deliver targeted sales pitches – all in pursuit of better patient outcomes and brand loyalty.

In this article, we’ll cover everything you need to know about pharma sales territory management. We’ll highlight what it is, how to execute it successfully, and provide some tips to do it effectively.

What is Pharma Sales Territory Management?

Territory management in pharma sales refers to the strategic process of dividing and organizing the market into specific geographic or demographic regions.

The aim is to optimize sales efforts and maximize revenue potential.

Pharmaceutical companies often employ territory management to ensure that their sales representatives effectively cover the target market, engage with healthcare professionals, and promote their products to potential customers.

Now, let’s look at the four common ways to assign territories:

1. Territory management by geography

This method involves dividing territories based on geographical areas such as zip codes, states, or countries.

Sales representatives of pharmaceutical companies are allocated to specific territories based on the geography size, and healthcare professionals (HCPs) are also grouped geographically.

This approach helps reduce travel time and expenses for sales reps and allows them to focus on serving HCPs within their designated area without overlap.

2. Territory management by accounts

In this approach, territories are assigned based on the specialties of healthcare professionals, such as pediatricians, cardiologists, orthopedics, and others.

Sales reps with specific knowledge of drugs or therapeutic areas are assigned territories based on the type of HCPs they need to engage with. This allows reps to build expertise in specific medical specialties and tailor their interactions accordingly, irrespective of geography.

3. Territory management by geography + accounts

This approach combines both geography and accounts to create territories that are more effective in targeting specific HCPs.

Sales reps may be assigned multiple zones, and certain HCPs with particular specialties might be excluded from their territory. This type of territory management can be complex to create but can offer more targeted and efficient sales efforts.

4. Territory management by company size

Under this option, territories are assigned based on the size of the company or the potential of the HCPs. New sales reps may be assigned smaller deals, while senior reps with more experience and capabilities may handle larger accounts.

However, territories divided in this manner are subject to change as the strengths and capabilities of sales reps evolve.

How to Execute Pharma Sales Territory Management in 5 Steps

Effective territory management is crucial for the success of pharmaceutical sales teams. It involves a strategic approach to divide sales territories, allocate resources, and engage with healthcare professionals (HCPs) to drive revenue growth and achieve sales targets.

Let's explore the key aspects that form the foundation of pharmaceutical sales territory management:

1. Geographic segmentation and territory design

Geographic segmentation is one of the primary methods used in pharmaceutical sales territory management.

Sales territories are divided based on geographical areas such as zip codes, states, or countries. This segmentation helps ensure that each territory has a well-defined boundary and no overlap or gaps in coverage.

Territory design is optimizing the allocation of sales representatives to different geographic regions. The goal is to balance the workload and ensure sales reps can efficiently reach and engage with HCPs within their designated territories.

How does this help?

Effective territory design reduces travel time and expenses while maximizing the sales team's productivity.

2. Healthcare professional coverage and engagement

Pharmaceutical sales reps need to engage with various types of healthcare professionals, including doctors, pharmacists, nurses, and other key decision-makers.

Territory management involves identifying and categorizing HCPs based on their specialties, preferences, and prescribing behaviors. Sales teams tailor their engagement strategies according to the unique needs of each HCP.

This targeted approach allows reps to:

  • Build strong relationships.
  • Provide valuable product information.
  • Address specific medical needs.

This ultimately drives better outcomes for patients and increases brand loyalty.

3. Account targeting and customer profiling

In addition to geographic segmentation, pharmaceutical companies also use account-based territory management. Instead of solely relying on geography, territories are assigned based on specific accounts or healthcare institutions.

Account targeting involves identifying high-potential accounts that are likely to generate significant sales.

On the other hand, customer profiling helps sales reps understand each account's needs, preferences, and challenges – enabling them to deliver personalized and compelling sales pitches.

4. Setting realistic sales quotas and goals

Territory management plays a pivotal role in setting realistic sales quotas and goals for each sales representative.

By analyzing historical sales data, market trends, and individual performance, sales leaders can determine achievable targets for each territory.

Additionally, realistic sales quotas help:

  • Motivate sales reps.
  • Drive performance.
  • Align individual goals with broader company objectives.
  • Ensures that the workload is evenly distributed, preventing undue pressure on any one territory.

5. Compliance with regulations and industry guidelines

The pharmaceutical industry is heavily regulated, and sales activities must comply with various laws, including anti-kickback statutes and transparency requirements.

That is why you need to make sure that your sales reps are well-informed about compliance guidelines.

Moreover, territory managers should monitor sales activities to ensure adherence to these standards.

Implementing a robust territory management system that incorporates compliance checks helps build trust with healthcare professionals and fosters a positive reputation for the pharmaceutical company.

4 Proven Tips for Effective Pharma Sales Territory Management

Here are some best practices to enhance your territory management efforts:

1. Ensure Collaborative sales team communication and coordination

Effective communication and collaboration among sales team members are fundamental to successful territory management.

To do so, encourage regular meetings and open channels of communication to share insights, best practices, and challenges faced in respective territories. This allows sales reps to:

  • Learn from each other.
  • Leverage collective expertise.
  • Develop innovative approaches to engage with healthcare professionals.

Additionally, coordination among team members ensures seamless coverage of accounts, reduces duplication of efforts, and fosters a unified sales approach across territories.

2. Use automation tools

Automation tools can help automate administrative tasks like call reporting and incentive calculations. This allows sales reps to focus more on building relationships with HCPs.

Moreover, data analytics tools can provide valuable insights into territory performance – enabling sales managers to make data-driven decisions and optimize sales strategies.

Invest in robust Customer Relationship Management (CRM) systems that offer territory mapping features, sales performance analytics, and account management capabilities.

3. Invest in continuous training and development opportunities

Regular training and development are crucial for empowering sales representatives with the knowledge and skills needed to excel in their territories. Consider offering ongoing training sessions that cover product updates, industry trends, selling techniques, and compliance regulations.

Additionally, sales representatives should also receive training on using CRM and other tools to manage their territories efficiently.

Investing in continuous development equips your sales team to navigate challenges, adapt to changing market dynamics, and deliver exceptional customer experiences.

4. Conduct periodic evaluation and adjustment of territory plans

Territory planning and management is a dynamic process that requires periodic evaluation and adjustment.

Here’s how you can do that:

  • Monitor key performance indicators (KPIs) to assess territory performance, such as sales revenue, customer engagement metrics, and conversion rates.
  • Regularly review and analyze the data to identify underperforming territories and areas of improvement.
  • Use insights to make data-driven adjustments to territory plans, such as redistributing accounts, reallocating resources, or redefining territory boundaries.

By conducting regular evaluations and adjustments, you ensure that your territory management strategies remain agile and responsive to market changes, enabling your sales team to stay ahead of the competition.

Final Thoughts

Pharmaceutical sales territory management is a multifaceted process that requires careful consideration and planning.

You need to adopt strategic approaches such as geographic segmentation, account targeting, and setting realistic sales quotas. This can maximize your sales team's productivity and help you achieve your business objectives.

Moreover, continuous evaluation and adjustment will allow you to stay agile and responsive to market changes, ensuring sustained success in the respective territories.

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