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How to Design the Best Strategy for Territory Sales

How to Design the Best Strategy for Territory Sales

Learn how to design the best strategy for territory sales.

4 min read

Writer

https://ghost.scalestack.io/content/images/2022/04/Mateo.jpg

Mateo Bilbao

scalestack

How to Design the Best Strategy for Territory Sales

Information about the writer

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.

What are territory 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.

Purpose of territory sales

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.

Territory Sales

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.

7 Factors to carry out the organization of territory sales

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.

  1. Equal opportunity: when you are allocating territory sales, you should pay careful attention to having an equal distribution of responsibilities and opportunities for all the sales reps. It is important to have a fair distribution for the employees as much as for the business.
  2. Being flexible when allocating: the definition of territory should be made flexible so that whenever the sales manager considers it necessary to change the territory between salesmen, he will be able to do it more easily, without suffering consequences in the results of the performance. Nevertheless, it is recommendable that such changes are to be avoided.
  3. Make it as controllable as you can: the allocation of sales territories has to be made in such a way that when exercising control over the sales functions, you can do it at minimum costs, and save time, whilst optimizing those processes at the same time.
  4. Try to eliminate the duplication of activities: when you are defining sales territories, you must try to avoid the duplication of activities. Giving the same territory to two people could not also mean a loss in resources and time, but it could also mean leaving one completely abandoned. Make sure that you do not make this mistake.
  5. Economic factor: the allocation of sales territories should be made in such a way that the traveling expenses of any sales rep, sales managers, and other personnel may come at the minimum possible. The best you could achieve is to have maximum services at minimum costs. Of course, you should do that if at the same time you can maintain the quality of your job. That is always the first priority.
  6. Efficient performance: the identification of the territory sales has to be made in such a way that every sales team and person gets the proper motivation to carry out his functions in the most efficient manner. For doing this, you can hire a specialist in the field and consult him on what should be done about this matter.
  7. Allocation to new salesmen: the new employees in the department should not be given the entire responsibility of a sales territory as soon as they start in the company. Despite this being a logical thing to say, it is key that no one commits this mistake, because it has the potential to be a future disaster. He should be associated with an experienced salesman so as to learn the techniques gradually.

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.

Bottom line

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.