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Learn how to design the best strategy for territory sales.
4 min read
Sales & Marketing head at Scalestack
In this blog, we will cover everything that needs to be covered about territory sales. What they are, what are their goals, their function, how can one design a proper one, etc. Read on if you think your business could be doing better in regards to sales.
Territory sales are either the customer group or geographical area for which a sales team holds responsibility. It can happen that a single sales team or person is given both to handle. Territories are usually defined according to geography, sales potential, history, or a combination of those factors. Companies aspire deeply to balance them because doing so can reduce many costs and increase sales.
The idea behind the definition of sales territories is to fit the sales opportunities with the selling action. A sales rep is given a group of similar clients and prospects for doing the service. This assignment by itself makes the planning simpler. Plus, it helps to control the sales operations.
Each territory has its own strong and weak attributes. An efficient management team will use these strategically. In a diverse market, it is comparatively more homogenous. A territorial division can sometimes bring out an element of effectiveness in sales operations. It also helps the assessment of the sales efforts made by the employees.
A territory is always representing a customer grouping. Although many companies put focus
on geographical issues, some other organizations that have a more technical style of selling tend to ignore this basis and assign salespersons to a particular customer grouping. It depends on the case and on the business way to do things, as well.
Even in geographically defined territories, ultimately a salesman is going to have to deal with a customer grouping. Generally, when the sales teams are taking internal orders, the geographical division does not matter that much. Only when the sales reps take orders from the outside, the scope of geographical division is defined.
Nevertheless, the majority of the companies usually adopt a geographical territorial division. When assigning a territory, we need to consider the service requirements and the cost of providing the service to the customers, and geography affects both. Even within a geographical division, there are groupings of buyers and the division just for the sake of administrative convenience. Moreover, businesses now are dealing in a more direct way from their offices with some important customers providing the bulk of the business. Such accounts are not assigned to any sales rep. In fact, these kinds of accounts are called house accounts.
There are some important factors to take into account when you are planning the allocation and division of the territory sales. Here are the main ones.
Having an effective distribution of responsibility between sales reps would have the advantage that the company would also be able to evaluate the functions and responsibilities of the sales team to determine their compensation, motivation, etc. It is an effective action to face the competitors’ activities in the territory that is to be studied.
Having an efficient distribution of the territory sales means having a most probable chance to have better leads whilst saving time and resources. With these guidelines, you will be able to design a territory sales plan that can make a difference in regard to the businesses that you are currently competing with.
It is now only a matter of whether you implement this advice in your company and how you do it, according to your own terms and the knowledge of what works best for your business.