What is Sales Territory? 6 Reasons Sales Territory is Important

A sales territory can be defined as a geographical area of a particular group of the customer, which is allocated for individuals Salesperson or together for a sales territory. Let us look at the definition more closely. Sales territory is not necessary geographical area, but it also can be several customers.

With changes in the business methodology, many companies have adopted this particular form wherein they not define the geographic as an area for the salesperson, but the number of customers has been defined.

This is true, especially in the case of international marketing where the salesperson who gets multiple customers from multiple countries and not restricting himself to defined geography.

Although in some cases, sales territory does define the geographical area and will have a predefined and routed area for the salesperson to cover.

In case of details is this territory may not be geographical, but it may be according to the product, for example, a salesperson who handles the refrigerator department will have his territory as refrigerator department.

The primary objective of organizations is to have maximum output from a predefined sales territory in the Importance of sales territory — order to increase the business volume by reducing the cost.

Important from an organizational point of view in the following terms

 

#1 Targeting:

The business of sales run successfully the only on proper targeting of the customers. The targeting should be done according to the potential of the customer’s nature of the business and the seasonal factors. Assist person can have a proper target rest only if he has a proper defined sales territory.

If the salesperson does not have a predefined sales territory, then the  Salesperson will keep on moving and finding the sales targets and would never be able to reach all of the customers.

Targeting is not only passive but also active that is sometimes regular visitor by the salesperson also converts a prospect into a target which is why the salesperson should have a predefined territory and should be able to form a relationship to convert it in the form of business.

A deceased person can only achieve proper targeting has proper and predefined sales territory.

#2 Customer reach:

 

A sales job requires the salesperson to reach the customers in short notice constantly. The Salesperson cannot be on the move every time, and he will have his home located at one place, which will be his headquarters and the territory apart from his home will be ex- headquarter.

Whenever the Salesperson has to reach a customer, he should be within a defined reach and time, depending on the product.

Customer’s demand for a better service and excellent after sales service and if there is a breakdown call or a technical difficulty the salesperson has to reach the customer within the given time which is more often than not very short. This is why salesperson should have a predefined territory. Customer reach and customer service are crucial in case of after-sales service.

#3 Measurability:

Having a predefined sales territory for a specific salesperson will help the organization to measure the output per sales employee. This will help the organization to understand which salesperson is performing better and which salesperson is not performing.

The measurability also helps the organization to take certain steps to adjust the area as if required.

For example a salesperson working in territory a is 200% productive while the salesperson working in territory b is only 50% productive then the organization will come to a conclusion to divide the areas of a and b in such a way that half of the territory is given to b and half of territory b is given to a so that each salesperson has half of their old area and half of new so that they can work on it and make it more productive.

Having such a division of sales territory, two specific salesperson helps the organization to measure the productivity in each area.

#4 Relationships:

When the salesperson has a proper defined sales territory, it is assumed that he must work in that particular territory and meet the customers regularly to get business.

This is not a one-time meeting which will include materials into a long term relationship, but the salesperson has to keep up continuously with the customer and meet him regularly so that a long term relationship is developed and this will happen only if the salesperson has a proper and defined sales territory.

Repeat visits help the salesperson to develop and establish long-term relationships with the customer, which helps to get him regular business. It is essential that the customers of the salesperson are met regularly to develop trust, and this trust then converts into a relationship which can be leveraged into the business.

Once a relationship is established with the customer, the salesperson should maintain that relation and get business as much as possible.

#5 Competitor activities:

 

The other importance of having a defined sales territory is that the Salesperson comes to know about the competitor activities from his regular and repeat visits to the existing customers.

The nature of competitor activities may vary from trade to territory and customer to customer which is my every salesperson has to know what is going on about computer activities in his area and this is only possible if the salesperson has a predefined sales territory.

Competitor activities should also help the company to understand the nature of the competitor activity and the business models of the computer organization and help them prepare accordingly. The territory division helps the higher management to understand if the competition has different activities for different areas and plan their sales accordingly.

#6 Workload management:

The sales territory division also helps the organization to distribute the workload, and the sea is potential equity amongst all the employees and then measure their success. The goal of the organization is to divide the workload and potentially equally amongst all the employees and then assess the individual potential of the salesperson.

Workload management also helps the sales teams to perform with healthy competition against each other and helps them to achieve targets.

How to conquer sales territory?

The concept of conquering the sales territory means that the salesperson should be able to extract maximum business from the territory.

This does not mean that the Salesperson should have a monopoly in the market because most of the companies have recently developed the concept of healthy competition in which every company understands that they cannot have the entire market to themselves, but it is necessary to have competitors so that both of them can grow equally.

However, the organization aims to achieve maximum market share amongst available competitors. Following are few of the techniques which can be used by a salesperson to conquer your sales territory:

#1 Customer mapping

 

 

The salesperson should be able to understand his entire territory and the customers who are present in his territory.

For this, the salesperson should have visited every customer in his area at least once to understand the nature of the customer the potential of the customer the buying ability and paying capacity along with competitor activities taking place at the customer’s place.

This is why the salesperson should do customer mapping at the earliest stage of working. Customer mapping is the analysis of the entire sales territory, which is done by the salesperson to determine the potential of the territory and prospects of that particular territory.

Having a detailed customer mapping helps the salesperson to target is available products with the different customers accordingly and give a proper estimate of market potential to the organization. This also helps the Salesperson to plan his Sales accordingly and achieve his targets.

Customer mapping is very useful for the Salesperson to understand the exact potential of his area and forecast accordingly to the management.

#2 Frequency of visits

The second factor which will help to conquer your sales territory is having frequent visits to the customer. Customer visit plays an important role in the business of sales in such a way that they help established the trust of the customer on the salesperson, and the more the frequency of the salesperson the more trust will the customer development, and this trust can be converted into a relationship which can be leveraged into sales.

The frequency of visits also helps to understand the competitor activities and the potential of the customer. It is very important to understand that if the salesperson has the required number of digits then and the planning should be done in such a way that the salesperson visits the customer slightly above an average number of times.

Having constant visits will either annoy and irritate the customer or else bring down the value of the salesperson. The ideal number of visits should be slightly above average to extract maximum out of your sales territory.

#3 Sales forecasting

 

Having excellent command over the sales territory helps the salesperson to give an accurate sales forecast, which is essential for the organization for inventory management and arrange for supply chains accordingly.

This proper and accurate sales forecasting can be achieved only if the salesperson has frequent visits to the customers understand the nature of the business and competitive activities along with his predefined area.

#4 Know the product and the customer

To get maximum business out of your territory, it is essential that you understand the nature of your products and place them accordingly in the minds of the customer.

To do this, the salesperson has to understand the nature of the customer so that he can target specific products for specific customers.

Every product cannot be targeted to every customer, which is why companies have introduced different variants. For example, salesperson of apple cannot target and iPhone xs max for every customer since the paying capacity of the customers varies.

This is way out of the available customers the Apple salesperson with identifying the customer with good-paying potential and target them for iPhone xs max. The salesperson can try to upsell the iPhone xs max to the customers who are already walking in to buy the immediate lower model of xs max.

And for remaining of the customers seek and target the different brands of is the price of the iPhone in the market according to their budget. Thus sales forecasting with help the salesperson to focus on targets accordingly and work to convert them into customers.

The other side of this is that the salesperson has to you know each and everything about his product. Knowing about one product does not mean that the salesperson should know only about his product but also about the competitor products in similar price bracket so that he can place proper facts of the products and his competitors accordingly while placing his product in the mind of the customer.

Every product may have some drawbacks which the salesperson should be aware of that along with the counter-argument which justifies or maybe defends for the particular drawback in the product.

For example, everybody agrees to the fact that the iPhone battery is to not last long on high usage as compared to android phones.

It is better than as a company representative you accept the fact of the drawback and then place a counter-argument by showing a benefit which may have been overlooked by the customer initially.

#5 Understand the factors affecting business

 

There can be multiple factors which are out of control of the salesperson or the customer, which may affect the business, and the salesperson has to plan and manage things accordingly.

For example, if there is a shortage of a particular product which is a high demand the salesperson has to try and convert the customers of that product into other products of similar nature and convince so that when the product goes out of stock, the salesperson does not fall short of his target.

The salesperson has to understand the paying capacity of the customer, and the customer who is about to expand his business is the right target to sell high-value products.

Then maybe she is the situations which affect the business every year, and this has to be understood by the salesperson and plan his target and give the projections and forecasts accordingly.

The shortfall in achievement should be compensated in the upcoming quarter by planning rigorously. These are multiple things and other multiple factors that the salesperson should consider while extracting maximum business out of his sales territory.