You’ve hired a qualified sales team to help establish brand recognition and build your business; now is the time to unleash their talents.

It may seem more straightforward to tell your sales team just to go out and sell, but it is nearly impossible to see continuous growth and success when you have no plan in place.

If you expect results, your sales strategy should divide the areas you serve into territories with solid management. This will improve productivity, morale, and performance. Let’s dig into sales territories and how to manage them.

What Is a Sales Territory?

A sales territory is the division of prospective and current customers and accounts, typically based on the following:

  • Geographic region
  • Business industry
  • Account type

After establishing this sales territory, you must assign a specific salesperson or sales team to these areas. Defining these territories allows you to streamline your sales strategy and collect data that you can then use to enhance sales potential and success.

How Should You Divide Sales Territories?

Although sales territories can rely heavily on geographical location, you should take into consideration the following:

  • Demographics of your target customer
  • The industry they represent
  • Size of business
  • Type of business

When assigning sales reps to specific territories, pair each with a territory they will thrive in based on their strengths.

How Do You Effectively Define and Manage Sales Territories?

While this may seem easy on paper, there’s quite a bit that goes into defining and managing sales territories. Here is a solid step-by-step to help you succeed.

1. Define Your Market

You should have a solid understanding of who your ideal customer is. Still, without clearly defined territories, sales reps may pursue and reach out to the same prospects, causing confusion and frustration.

2. Divide and Balance Territories

When dividing your sales territories, consider the following:

  • Number of existing customers
  • Number of potential new customers
  • The overall revenue potential of each territory

You are looking to equally distribute these opportunities amongst each territory, allowing equal opportunities for each sales rep.

3. Set Priorities and Establish Achievable, Measurable Goals

You want to be sure to track the success of each territory and know that each person on your sales team and management understands the expectations set by the business. Clearly defining and communicating goals is vital when setting expectations for your sales team.

How do you avoid vague and, therefore, unattainable goals? Consider using the following metrics to motivate your sales team:

  • Income generated per month
  • Number of sales attempts per month
  • Number of sales closed per month
  • The ratio of leads to sales closed per month

Of course, the timeline is entirely up to you and your business needs. An excellent way to discover these numbers is to look at your bottom line for the year.

Then, back up to the quarter and break these numbers down until you can estimate what your sales team needs weekly or even daily.

4. Identify Sales Reps Experience, Strengths, and Weaknesses

Not all sales representatives are made equal, but we wouldn’t want them to be. Each sales rep has unique strengths and weaknesses — identifying them will help you better organize your sales team within sales territories.

You may have a sales rep with lots of experience selling to specific demographics, while others may be experts with certain products or within particular industries.

Some may like to handle multiple small accounts, while others prefer large accounts that require plenty of hands-on attention.

Whatever the case, finding a balance between the territories and among sales team members will better position these individuals, and the business, for success.

5. Create Territories and Routes To Increase Selling Time

Although geography shouldn’t be the only consideration you have in mind when dividing and assigning sales territories, if the area you are servicing is large, you must consider the amount of time your reps will be commuting. Over 80 percent of top performers spend more than four hours daily on sales activities.

You want your sales team to spend more time connecting and building relationships amongst current customers and prospects than driving in their cars or inputting data.

By separating your entire service area and separating it into digestible quadrants, your sales team can spend more time positioning prospects into the sales funnel and less time submitting receipts to be reimbursed.

6. Prevent Territory Conflicts

Establishing clear boundaries in your sales territories is vital to ensure that sales reps are not approaching the same prospect multiple times. Otherwise, sales reps may begin bickering, leading to a perceived turf war.

If this goes unchecked, your sales reps may begin questioning the fairness of the divide. If they believe that they are losing out on opportunities based on how they were assigned, they may lose faith in the company, and you may face an increased turnover of employees.

The best way to combat this is using definitive and quantifiable data that supports your decisions, supporting the claim that you are providing each sales rep with equal opportunities, which helps alleviate anxiety and animosity amongst your sales team.

7. Utilize Sales Cadence To Provide Consistent Results

Once a prospect has been identified within a sales territory, it is time to get them into the sales funnel. But when working with multiple leads simultaneously, it’s easy for some to slide through the cracks, and now, you have suddenly lost a valuable account.

To help manage these territories and accounts, consider implementing a sales cadence into your sales strategy. A sales cadence can help you establish an easy-to-follow and repeatable follow-up process. This ultimately helps establish a consistent customer experience during every interaction.

8. Remember Your Current Customers While Seeking New Leads

While pursuing new business is essential to growing your business, you must remain attentive to your current accounts to secure customer retention. Additionally, you shouldn’t overlook word of mouth when trying to expand your contacts and customer base.

By maintaining trusting relationships with your current customers, you will likely receive referrals, meaning there is less cold calling and more hot leads ready to talk about your product.

In fact, 91 percent of customers say they would give referrals, but only 11 percent of salespeople ask for them. Let your current clients take off some of the pressure while they help position prospects further down the sales funnel and closer to being converted into paying customers.

9. Monitor Representatives and Territory Performance

As we previously discussed, data-driven goals are essential to establishing success in your sales team and territory. Once you set those goals, you should be able to track the results in real-time, and, therefore, you can adjust your strategy as necessary.

Your sales representatives should log detailed notes with every interaction with a prospect.

You should have access to that information to notice patterns that directly reflect how successful your sales strategy is and how well each rep performs in their designated territory.

Take into account the following information when determining if a sales rep is succeeding in their area:

  • Number of new contacts the sales rep is bringing into the sales funnel
  • The conversion rate from lead to customer
  • The average number of meetings and follow-ups appointment taken by the sales rep
  • The average sale size in dollar amounts

10. Review Data and Adjust Territories When Needed

Once you have all the data in front of you, it can be overwhelming to decipher what is helpful and what is just filling up space. How do you sort the lines and lines of data into valuable information that improves your bottom line?

After your sales territories have been active for an extended amount of time, you can better determine each area's estimated vs. actual sales potential and how well each rep is performing in that area.

You should constantly monitor your sales territories to optimize your strategies for the best results.

Conclusion

Whether you represent a small startup or an established business, sales territories are necessary when building your sales strategy. These territories divide the work fairly amongst your sales representatives and sales managers.

Playing on your team's strengths, you can accommodate the different needs of potential customers and even identify prospects that you may have overlooked before.

These territories help you refine your target audience, and you can better develop and employ strategies that work for each area rather than attempting a “one size fits all” approach.

By utilizing the data gathered from these territories, you can allocate the correct number of resources to the territories that require it, lowering overhead costs and eliminating wasteful spending.

Your customers are looking for convenience and to save time and money. Why shouldn’t you be seeking out that same thing?

Sources:

23 Sales Statistics You Need to Know | Fit Small Business

21 Mind-Blowing Sales Stats | The Brevet Group

Target Market: Definition, Purpose, Examples, Market Segments | Investopedia