What are Sales territories and which types exist?

In order for a business to be successful, it must have an efficient sales territory strategy set in place. A sales territory can be defined as a group of customers OR a geographical area for which a member of a sales team has the responsibility to sell to. Different types of territories are a geographic area, the sales potential, or a few different factors combined. Typically sales territories are based upon geographical limitations such as cities, regions, or even entire countries. Territories are divided and designed so that salespeople know exactly where to focus their time and efforts wisely.

Different types of Sales Territories Explained:

• Geographic Location: Geographic is perhaps the most prevalent type of sales territory. This method can be described as creating parameters based upon the jurisdiction of boundaries or regions. This type of sales territory is the most popular due to its consistency and practicality. A few things to keep in mind when constructing a geographic sales territory are the population of the area and the size of the area.
• Population: Another popular way to split up a sales territory is by the overall population. When using this method, you are ensuring that every salesperson or sales team has been distributed an even amount of client prospects. This is a great way to ensure that everyone is given the same opportunity to sell and essentially the same amount of responsibility. With this method, one team may have a smaller yet more densely populated area while another team has a much more vast amount of territory to cover with a lower overall population of people.
• Niche: When you have a large company that has many different departments selling different kinds of products or services, you will most likely have different sales departments for every different type of product. This allows your team to focus on the customer persona they are trying to reach for a specific product. When you have specific salespeople on a specific product you can guarantee that the sales team can specialize on exactly what they are trying to sell instead of trying to sell a vast array of products.

All of these strategies have been utilized time and time again and have shown different levels of success for different companies. When setting up a territory strategy it is important to dissect your business to find what sales territory method will suit your company the best. Choosing the right strategy will be sure to solidify and improve your sales operations.

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