Introduction

Sales territories are the basic sales management infrastructure. It is because sales territories define the jurisdiction that sellers and channel managers have over accounts, partners, contacts, households, and related transactions. Territory management is the process of dividing the target market into different groups based on geographic or market segments known as territories. The ultimate goal of territory management is to increase revenue while minimizing costs by ensuring that sales reps are focusing on the right customers in the right locations, defining the number of sales reps in one area, and maximizing the promotion program to the different customer classifications The key activities on Sales Territory Management: 

1. Analyzing customer database

2. Defining the boundaries of each territory 

3. Assigning sales representatives to territories

4. Providing appropriate tools for sales representative

5. Monitoring the performance of each territory and making adjustments if needed.  

Benefits of Effective Territory Management

Effective territory management can help companies increase their sales revenue by targeting customers appropriately in the right locations. It also reduces travel time and expenses for sales reps, thus ultimately leading to more productive and efficient use of their time. Customers will receive better service, which means the level of Customer Satisfaction will be better. In the end, it will increase repeat orders.In addition, the relationship between your salesperson and customers is getting better than their relationship with your competitors.

The Key Elements of Successful Territory Management

A territory plan outlines how to manage sales accounts, prospects, and resources within defined geographic areas, as it will align goals, activities, and tactics with organizational goals and expectations. Good territory planning should be SMART (specific, measurable, achievable, relevant, time-bound), flexible, adaptable, and agile toward changing market conditions and client needs. It is essential to have a clear understanding of the target market and customer database.

Other key elements include creating a well-defined sales territory plan, assigning the right sales reps to the territories, and providing ongoing training such as Customer Need Solution Model [CNSM], How Handling Customer Response, Effective Communication Training, and support, also ensuring that sales reps have necessary tools and resources to succeed.

Challenges in Territory Management

Most companies are still outdated and limit prospects by relying on experience. This mindset will not bring the company anywhere except to the same place it had been. Other than navigating the market just by experience, try to use data. It will broaden the perspective of the market.

In some cases, the implementation of territory Management is still not optimal. Since “territory’ is not only dividing the customers based on geographic area, try to define the target customer in detail. 

Leaders should ensure the territories and coverage area are adequate for the sales rep to perform best. For example, 15 sales reps are allocated for a decent region, while a prosperous region is assigned to the same amount of sales reps. This strategy is not effective in generating higher revenue. 

Among those, one of the biggest challenges in territory management is ensuring that sales reps are covering their assigned territories effectively and efficiently.

Other challenges include managing conflicts between sales reps who may want to sell to the same customers or territories and adapting to changes in the market and customer needs.

Technology and Territory Management

Advances in technology have made it easier for companies to manage their sales territories more effectively. Tools such as CRM software, mapping software, and mobile apps can help sales reps optimize their routes, track their progress, and access important customer data on the go.

Conclusion

Effective territory management is crucial for your companies looking to maximize their sales results while minimizing costs.

By understanding the key elements of successful territory management, defining the number of salespeople, addressing common challenges, and leveraging technology, companies can create a more efficient and effective sales team that achieves greater results.

Contributor:
Marsono M, AMd Gz
Business & People Development Director