Sales territories are an effective way for sales managers to divide up their sales force by assigning specific customer groups to individual reps. Designating sales territories to sales reps is an effective way for sales managers to optimize productivity in field sales. However, determining the right sales territory design is a crucial part of achieving efficiency. It is important that you establish manageable and well-balanced territories to ensure effective usage of resources and time.
Sales territories are often defined by geographic location, sales history, competitive activities, customer names, sales potential and/or other metrics. As a sales manager, when creating territories for your sales reps, you need to determine how to weigh these metrics appropriately to drive potential earnings. The distribution of workload and opportunities you determine across the sales team will impact your reps’ ability to meet their quotas.
According to the researchers Andris A. Zoltners et al., sales can be increased by 2 – 7% through sales territory optimization – without using additional resources or changing the current sales strategy. Thus, every sales manager should rethink present territories to ensure achieving an even allocation of work and reaching the full sales potential of the team.