Effectively defining sales territories may be one of the most difficult and challenging of a sales manager’s responsibilities.
Doing it well can keep sales reps engaged while enabling them to perform at their best and meet their targets. Doing it poorly can de-motivate the team because of unequal and unfair opportunities. Your overall goal is to maximize the potential of your sales team and your target accounts.
The best advice from sales territory management training for constructing territories in an effective and fair way can be distilled into the following five steps:
- Determine the current performance in each territory.
- Predict “spend” potential for each existing potential target customer in an area.
- Put a number on market potential by combining the results of Step One and Step Two.
- Draft a map that takes into account a judicious balance between current customers, prospective customers and predicted sales opportunities. Consider, too, as you assign territories the capacity of each sales rep in terms of workload and travel.
- Review, adjust, and refine. Work closely with your reps to make sure there is an equitable distribution of opportunities and sufficient potential to reach targets.