Many organizations divide their sales territories based on geography. This might mean certain reps handle specific zip codes, states or regions. This approach works because it’s straightforward. It makes sense to assign territories to sales reps who understand different areas. But, basing sales territories strictly on geography has its limitations.

A post on the Maptive blog points out that this approach can lead to an uneven ineffective distribution of your salesforce. It can also lead to frustration for reps and clients alike. For example, some reps may need to commute or travel much more often than others based on their territory. Some reps may work in regions with bustling cities while others may work in more rural areas with fewer potential clients.

Fortunately, there are many ways to divide sales territories. In this issue of PromoPro Daily, we highlight a post from Maptive that explains some alternative methods for drawing sales territories.

1. Demographics. The post points out that to sell effectively, you must know who you are selling to. That’s why assigning sales territories based on various demographics can help you better connect with your customer base. Think about how you could base your sales territory by factors like language spoken or education.

2. Industry. Another option for dividing your sales territories is looking at specific industries like the education or medical fields. This can be especially useful if your target audience or existing customers are not individual consumers but rather businesses and organizations.

3. Market potential. When you base your territories on market potential, the post says you are making sure that all your reps have the same chances to hit their revenue goals based on the opportunities that are available in the area assigned to them. To do this, sales territories based on market potential are drawn based on a variety of factors, like the size of the addressable market, competitors already present in the area, and the market’s current saturation level.

4. Revenue potential. According to the post, territories based on revenue potential are less reliant on geographical or physical boundaries and concentrate strictly on the amount of business that can be generated and who should be handling certain clients. For example, if you’re leading a sales team with long-time clients and established accounts, it might make sense to create sales territories that weigh the importance not just of future sales opportunities but also the size of existing deals.

Establishing sales territories can be tricky, but it’s a critical part of your team’s success. Remember to put your customers’ needs first by distributing your sales effort equally and strategically.

Compiled by Audrey Sellers

Source: The Maptive blog. Maptive is a cloud-based mapping software that provides businesses from small nonprofits to enterprise-level corporations with a wide range of geospatial analysis and data visualization capabilities.