If you are a sales manager in need of establishing sales territories, consider many variables. The success or failure of a sales territory can be determined by how well the territory is researched, and how efficiently the sales professional assigned the area works it. Part of giving your sales people a good head start is to assign well-researched territories.
- When you determine sales territories, you should be using demographic information that provides insight into the density of potential customers for your product or service. Demographic reports can be specified based on the kinds of industries found in various parts of the country, how many employees those companies have and how much revenue those companies generate. When you are developing sales areas, use the density of potential customers to establish boundaries that will offer all of your representatives success.
- If you are a smaller or newer sales organization, your sales territories may be broken down by the areas you can effectively reach on your budget. Using geography to determine sales territories can sometimes mean that your territories will change frequently to accommodate the changes in your company's finances. Ultimately you want all of your sales territories to be based on product population density, but if you are constrained by a low travel budget, then geography may be the best way to divide territories at first.
- Hold regular sales meetings with your sales representatives to ask how things are working from the field perspective. After working in a territory for a month or so, a sales professional will be able to give insight as to whether the territory they were assigned is going to be able to generate the projected revenue. In some cases, a sales representative may be able to work a territory, but they will need their revenue goals adjusted to be able to make a living. Determining territories needs to be in the best interest of the company and the sales professional working that area. If a sales person does not feel she can make a living selling your product in the territories you have established, she may be inclined to make a living with a company that has set better territories.
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