Designing Sales Territories

Define sales territory as the set of existing and potential customers assigned to a salesperson, emphasizing customer-first design beyond geographic boundaries.

Define safe sales territories by balancing three key points: customer coverage with workload, the salesman's skills and competencies for each territory, and the potential sales the territory can generate.

Assess territories by sales funnel performance, tracking leads, opportunities, and deals, and calculate the conversion rate as new accounts divided by the original number of leads, to guide resource allocation.

Follow a six-step blueprint for designing sales territories: select control units, define potential sales per unit, group units into temporary territories, analyze workload, and assign safe territories to salespeople.

Select a control unit that is small enough to set limits but large enough to analyze market data, using a geographic approach for clearer boundaries, product availability, and customer service.

Identify potential sales by each control unit using subjective and objective forecasting methods. Map five geographical areas to their estimated sales and the required number of visits.

Analyze how a salesperson's workload depends on visit schedules, product type, distribution channel, and market development, guiding territory size and visit frequency for efficient market coverage.

Assess territory workload by tracking customers to visit, average visits to receive an order, total visits to cover the territory, total man hours, travel time, visit frequency, and activity time.

Use abc analysis to classify customers into a, b, c by sales potential. Determine visit frequency by class; 15% drive 65%, 20% drive 20%, 65% drive 15%.

Develop sales route maps by abc analysis of visits, distances, and time, then apply straight line, circular, leap frog, skip stop, and cloverleaf itineraries with cost and appointment timing considerations.

Learn practical tips for making sales routes. This content explores designing sales territories and how to apply tips to territory design.

Explore essential tools to plan sales territories, including CRM for customer data, spreadsheets for analysis, and geo-location route optimization that integrates data from multiple sources with CRM.

Measure progress toward goals by evaluating sales activities, and validate your sales territory plan with five questions: grow strategic relationships, advance pipeline, improve close rates, forecast accurately, and deploy resources.