Define Your Sales Territories by County, State or Zip Code


The purpose of using sales territories is to assign sales accountability and to measure sales progress. A sales organization can choose to make this a simple process or a complex process. I am sure there are organizations that require, for good reason, many layers of management and measurement that can make the territory process somewhat complex. My vote is for keeping it simple. Build sales territory maps using map layers such as counties, states, and zip codes.

Sales territory creation organizes your sales force. In most cases sales managers want their sales people in separate, clearly defined sales areas. These area assignments help drive accountability. Assigned territories help salespeople define their own unique set of goals.

Know Your Field Sales Facts

Sales territory alignment also anchors the sales person’s tasks in selling logic; that is, territory assignments are developed through an awareness of field sales facts and assigned accordingly.  For example, one sales territory may have certain accounts assigned based on physical object that hinder face-to-face selling, like mountains or rivers. Another example could be a skillset requirement at specific accounts mandates that only certain sales reps attend to these accounts.

One key aspect of sales territories to consider is the concept of sales territory overlap. The best sales territory software will include the ability to show territory overlap as an option. Sometimes sales managers allow sales people to share territories, others do not. Allowing overlap could be due to legacy relationships, work load, or training realities. Each company handles sales overlap differently.

Field sales facts can be multifaceted. A sales territory could be assigned based on historical sales data. Sales volumes often vary by region and balancing the sales load, as well as sales compensation, only makes sense. Contributing factors towards sales territory assignment based on sales histories, might include the number of sales people available for assignment, how geographically spread out your target area is, and where most of the sales are concentrated.

Field sales facts could also be tied directly to demographic analysis. The sales assignment justification may use population, median income, and household levels per zip code as its basis. Or some companies may choose to import additional demographics such as health or real estate statistics that may be relevant to the industry at hand. All statistical additions should contain a location component (ZIP code, county) to connect it to territory assignment logic.

Still further factual justification could be based on the location of customers and known prospects. This is especially important where sales and service rep travel has a significant impact on expenses. A visual analysis of key customer locations viewed against a business map, informs the sales manager of obvious territory assignment needs, and leads to proper focus on critical areas with more existing or potential customers. Add to this map view an imported set of home locations representing where your sales people start their day (office or home) and even where all your competitors are located, and you have a pretty complete picture of your business network – your field sales theater of operation.

Create and Share Sales Territory Maps

Most business mapping software applications provide an easy and simple way to build sales territories by applying standard administrative districts e.g., counties, states, and zip codes. These common geographic segments simplify and organize sales territory management.

For the most part, the physical boundaries of these areas are well known, and agreed upon. This can come in handy when attempting to negotiate sales responsibilities between two or three aggressive and commissioned sales reps; all sales professionals can agree on a boundary and an account location. Having a shared map sales discussion regarding territory demographic make up, travel requirements, and potential accounts, is healthy and business maps are the perfect platform to encourage these discussions.

A ZIP code, county, or state map layer is often used to build demographic maps. Population, household, income or other demographic data categories are routinely published in geographic segments which enable informative map views that can help define and quantify a territory. Especially when selling consumer products, a demographic/geographic perspective will clearly illustrate market potential.

Geographic Map Layers vs. Physical Objects

When drafting boundary lines for territories it just makes good sense to follow existing administrative boundary lines instead of creating arbitrary lines. Here’s a partial list of reasons why:
• Arbitrary lines have no basis in the real world. How does a sales person adhere to an imaginary random line? Random lines create gray areas, sometimes overlapping, which can decrease accountability and gaps in sales coverage.
• Arbitrary lines are a lot more work to create, requiring advanced drawing tools and techniques that take time away from the business of selling.
• Because arbitrary lines require more work, sales managers are reluctant to change them which can impede territory management, territory adjustments, and process measurement.
• Arbitrary areas cannot be as effectively associated with published Census demographics and imported sales and customer data leading holes in business analysis and bad decision making.

Simple administrative districts, such as ZIP codes, cities, or counties, are used as a basis for sales territories. This allows managers to create higher level territory tiers or regions that provide overall sales management districts for handling groups of sales associates. These management regions distribute the management load while providing sensible geographic segmentation to the sales process.

Developing sales territories based on administrative districts also allows map users to build spatial queries that relate and display account and prospect business data to sales territories. Now your critical account base and your target prospect accounts are associated with sales territories, and that is the fundamental criteria for sales territory accountability. Armed with a map-based sales database, a sales manager can drill up or down to view sales results and responsibilities at various levels within the sales organization. Measurements applied on a monthly or quarterly basis will provide all the detail necessary to improve results.

A Sales Territory Map

Maps are for Sharing

Share these map views with your sales teams to encourage adherence to strategies and awareness of progress towards goals. As a result sales planning, travel and measurements will all improve. Sales results will fall into line and start out pacing goals.

Export those results and expectations into your sales funnel analysis and begin to control your future.

In review, Sales territory software assignments drive sales decision making, develop sales goals, and help sales people monitor their own progress. Use a web-based business mapping software to help you build sales territories. It should be easy, affordable, and an improvement to your business work flow. If it’s not, go find another one. – America’s fastest growing business mapping software. Contact us for a web demo of sales territory management tools.

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