What is a sales territory? It’s a geographical area of customers, or potentials, assigned to a salesperson, branch or retailer.
There are a number benefits to a good sales territory design:
- Enhanced customer coverage
- A reduction in travel time and selling costs
- More equitable rewards
- Sales force evaluation
- Increased sales
- Increased morale
Start by determining the locations of customers, and potentials, using that information to fix primary territories. Then assign people to each region and continue evaluating the design’s effectiveness.
Consider territorial control units, such as state, county, city, zip code, as well as metropolitan statistical areas (MSAs).
Management decides how frequently an employee visits each customer’s location. They set boundary lines by combining the expectation of total unit sales and the calls required to achieve that total. How many accounts do you have? Ten accounts receiving two calls per month equates to 240 calls a year, 30 accounts called on once per month equates to 360 calls per year, and so on.
Motivate Salesforce. If the sales territory design is good, the workload of sales employees declines, making their time more efficient to increase sales. Because it boosts morale, the sales force is increasingly motivated, which is another excellent way to increase sales.
Getting Reps Running faster. While bringing new sales reps on board has a positive impact on the top line in the long run, the negative impact on the bottom line is the costs associated with new employees. That’s why it’s critical to assign reps a territory and quota as fast as possible – so they can start bringing in revenue. The weeks spent waiting to get assignments is money wasted. Quickly assigning accounts and distributing and adjusting quotas means the faster a rep can prove their value
Create a Pattern. A sales force routed by a Geographical Information System (GIS), combines multi-layers of information to understand the sales territory in depth. Management creates a pattern for sales reps to follow using this information. It’s an incredibly efficient way to reduce travel costs.
Beat Your Competition. Optimally aligned territories, means moving faster when new opportunity comes in, beating your competition to the next sale.
Review and Correct. Periodically revisit the sales territory design to guarantee that the company is getting the best out of their workforce. As an area’s demographics change make required changes to the territories.
If you are ready to optimize your sales territories and increase your bottom line, contact GeoMetrx today.