How to establish sales territories and quotas when selling into healthcare

Selling to healthcare organizations is tough. Decision-makers change, markets fluctuate, and affiliations shift. To succeed in this landscape, you need an agile sales strategy that leverages the power of data.

The good news? Healthcare generates a ton of data, from medical claims to healthcare affiliations to technology installations data. This information can help you navigate the unique dynamics of the market and reach your sales goals.

In this guide, we'll show you how to harness key healthcare data to create effective sales territories and establish smart sales quotas when selling into healthcare.

What factors must be considered when setting up sales territories?

Before you start drawing lines on the map and sending your sales team out with their targets, it’s worth taking some time to think about what you’re trying to accomplish. Setting realistic goals and doing some preliminary planning will help you identify the qualities that ensure optimal sales coverage, increased efficiency, and greater productivity.

The most direct way of creating your sales territory is to:

Define your market
Evaluate sales territory quality
Set goals and quotas
Assign territories

The first step is to analyze your total addressable market (TAM) and segment it into logical groups. Use criteria like geographic location, company size, industry, purchase history, and other attributes. The goal here is to reveal potential ways to slice your market into smaller segments that share similar characteristics and needs that you can realistically tackle.

Next, use healthcare data and other metrics to analyze the viability of each territory across each market segment. Be sure to research the addressable market size and your potential piece of the pie. Publicly available hospital data, market research and reports, and demographic factors can all help you determine the sales potential of a territory. You might also glean insights into viable territories and ideal customers by analyzing your previous wins and losses.

With a clearer idea of which sales territories you should prioritize, you can set goals and quotas for each territory. Rely on input from your sales leaders and historical performance to set revenue and activity goals that are both realistic and ambitious. You’ll also need to assign territories to the sales reps most suited to achieve success.

The steps outlined above will prepare you to put a sales territory plan into action, but it’s healthcare data that will equip you and your sales team with the knowledge they’ll need to win more deals and open the door to beneficial relationships with your clients.

In the following sections, we’ll explore the importance of using healthcare data in the sales territory planning and management process, as well as discuss the specific types of data you should consider using.

Access essential healthcare data for sales planning

Healthcare data is the key to unlocking success in the healthcare market, but you need to have the right data at your fingertips. Let's dig into some key data sources that can empower your sales planning.

Healthcare reference and affiliation data

Healthcare reference and affiliation data is a type of data that provides information about healthcare organizations and providers, including their relationships with each other. You can use this data to identify potential customers, discover influential decision-makers, and pinpoint opportunities.

Healthcare reference and affiliation data typically include:

Facility and practice locations
Contact information
Healthcare organization and professional affiliations
Financial performance
Quality performance
Staffing data

Healthcare reference and affiliation data are sourced from government agencies, healthcare directories, and proprietary databases.

Medical and prescription claims data

Medical and prescription claims data compile information on healthcare services provided, treatments administered, and medications prescribed. It often includes procedure, diagnosis, and billing codes (e.g., DRGs, CPTs, HCPCSs, ICD-10) as well as place of service.

This data can help you identify healthcare facilities or providers with high patient volumes, prevalent medical conditions, treatment needs, and more. For example, you can use claims data to discover all hospital inpatient diagnoses of pulmonary emboli to help map sales territories.

Medical and prescription claims data are typically sourced from insurance providers, healthcare organizations, and government agencies.

Technology installation data

Technology installation data tracks the use of various types of technologies within facilities. This includes electronic health records (EHRs), medical imaging equipment, software solutions such as HR and financial systems, and more.

Understanding the technology landscape in healthcare facilities can help determine what tools and technologies are already in place, which organizations may require compatibility with existing systems, and which facilities are looking to upgrade their technology infrastructure. This information can provide a roadmap for aligning your healthcare solutions with the needs of potential customers.

In the following sections, we'll explore how you can use these data sources to set effective sales territories and quotas.

Set sales quotas with key healthcare data

Assess market potential

The first step in setting data-driven sales quotas is to assess the market potential of each sales territory. This involves analyzing key healthcare data points such as:

Patient population: How many potential patients are in the territory?
Provider landscape: What types of healthcare providers are in the territory?
Referral patterns: How do patients get referred to healthcare providers in the territory?
Technology adoption rates: How widely adopted are new healthcare technologies in the territory?

By understanding the market potential of each sales territory, you can set quotas that are realistic and achievable for your sales team.

Make territory-specific adjustments

Once you have assessed the market potential of each sales territory, you may need to adjust quotas for certain territories. This is because healthcare markets are dynamic and subject to changes such as:

Fluctuations in patient demographics: For example, if a new hospital opens in a territory, it may increase the number of potential patients who could benefit from your treatment in that territory.
Shifts in provider networks: If a hospital that excludes your drug from its formulary acquires a major physician group in a territory, it could impact your access to potential prescribers.
Emergence of competitors: If a new competitor enters a territory, it could reduce the potential market share for your product, service, or solution.

By regularly reviewing sales territories and adjusting quotas as needed, you can ensure that your sales team is well-positioned to succeed in all markets.

Additional tips for setting data-driven sales quotas

In addition to the above steps, here are some more tips for setting sales quotas:

Use a variety of data sources: Don't rely on just one data source to set quotas. Use a variety of sources, such as claims data, reference and affiliations data, and technology installation data, to get a holistic view of the market.
Set challenging but achievable quotas: Quotas should be challenging, but they should also be achievable. If quotas are too difficult to meet, your sales team can become demotivated.
Regularly review and adjust quotas: Sales quotas should be reviewed and adjusted regularly to reflect changes in the market and sales performance.

By following these tips, you can set data-driven sales quotas that will help your sales team achieve their goals.

Creating meaningful sales territories is also a critical component of any successful sales strategy, and it’s especially important in healthcare. Here are three common ways to assign sales territories.

Geographic assignment

This is the most common method of territory assignment, and it involves dividing the market into geographic regions, such as states, counties, or zip codes. Geographic assignment is relatively easy to manage, but it can be less effective in markets where there is a high concentration of customers in a small geographic area or in markets where segmentation by certain therapeutic areas is required.

For example, if you’re selling a new drug to treat a rare disease, it may not make sense to assign sales reps to geographic regions. Instead, it may be more effective to assign sales reps to specific accounts, such as hospitals or clinics that specialize in treating that disease.

Account-based assignment

This method involves assigning sales representatives to specific accounts, often based on therapeutic area or by dividing the market into segments based on customer characteristics. For example, integrated delivery networks, hospitals, private practices, long-term care facilities, and infusion centers each represent distinct segments that may require different approaches. Account-based assignments can be complex but enable more targeted sales efforts.

Hybrid assignment

This method combines elements of geographic and account-based assignment. For example, a sales representative may be assigned to a specific geographic region, but they may also be responsible for specific accounts within that region, such as hematologists or nephrologists. Hybrid assignments can be a good way to balance the benefits of geographic and account-based assignments.

Regardless of the approach, data plays a critical role in creating territories that are strategically aligned with the healthcare landscape, balanced, and efficient.

What it all means

Assigning sales territories and quotas is an ongoing and dynamic process that requires a deep understanding of the industry, a flexible approach, and a commitment to helping your sales team succeed in a highly competitive environment. In the data-rich healthcare landscape, your ability to strategically align sales territories is a skill that can set you apart from the competition.

For more information on developing data-driven sales strategies, tap into these resources:

3 tips for more effective territory management
3 tips for planning your annual sales strategy
It’s not too early to set your annual sales quota

Or, if you’re ready to harness key healthcare data to create effective sales territories and establish smart sales quotas, start a free trial now.