Sales territory mapping is a cross-functional division of the target market based on predefined qualities. Using this system, the sales team can develop effective strategies that attract impressive results without experiencing burnout. Here is a detailed overview of what is a sales territory, its different types, and how to perform sales territory mapping.
Sales territory optimization can boost sales. One may think that it’s not too significant, but here’s the fun part - it offers such results without any change in the sales strategy or total resources.
In simple words, it just requires astute planning to deliver better results while maintaining business scalability - and that’s just the tangible component of the advantages!
Sales territory mapping can also streamline resources, improve customer service, balance workloads, introduce fairness, and maximize productivity - all of which will attract multi-fold benefits.
Read on to know more about sales territory - from what it is to how to create and assign it.
What is a Sales Territory?
A sales territory is a sub-division of the target market based on parameters like:
- Geographic region.
- Account type.
- Industry.
- Sales channel.
- Revenue potential, etc.
It marks a well-defined segment of existing and potential customers that are assigned to a salesperson or a team to match their skill sets and capabilities.
The benefit?
Such a classification-led sales territory assignment allows the sales team to deploy appropriate strategies and register success in every sales territory.
5 Types of Sales Territories
As mentioned, sales territories are well-defined target market segments.
As such, it comprises boundaries that depend on various factors, such as geographic location, demographic details, product-linked territory, and more.
Along these lines, here are some examples of sales territories:
1. Geographic sales territories
Geographic sales territories are by far the most common (and oldest) sales territories to ever exist.
In fact, most on-field salespeople have used geographic sales territories for centuries!
It involves the classification of the target market based on its geographical location with the continent, country, state, or zip codes defining the territories.
Say you are a multinational SaaS vendor.
Your sales team A serves the customers and prospects from India, whereas sales team B serves the customers and prospects residing in Germany.
2. Product sales territories
Product-based sales territories feature in organizations that have multi-line product or service offerings.
Categorizing the teams/reps on the basis of the product allows them to gain a certain amount of expertise on what they’re selling and do it more convincingly.
Think of yourself as a consumer electronics retailer.
Your sales department will comprise the following:
Team A: Responsible for kitchen appliances.
Team B: Deals in mobile phones, smart wearables, and accessories.
Team C: Looks after the sale of personal computers and laptops.
Team D: Handles television and set-top boxes.
3. Customer sales territories
Customer sales territories are divided based on customer characteristics, such as demographic, psychographic, and behavioral details, to compartmentalize existing and potential customers.
It may also include account-based management (ABM), where you focus on selling to customers or prospects who would be more beneficial to your organization.
Suppose you sell fashion and apparel products to men, women, and kids.
The different sales teams within your organization will group the target audience demographically. They’ll then engage with them or push for sales based on the strategies most appropriate for them.
4. Industry sales territories
As the name indicates, industry sales territories depend on the industry vertical of the company.
Such an approach obviously works best if your business caters to individuals or businesses from different industrial backgrounds.
Let’s assume you run an insurance business.
Sales team A would be in charge of handling all things related to sales in the life and health insurance segment. On the other hand, sales team B will handle property and casualty insurance, and sales team C will be involved in auto insurance.
5. Sales channel territories
Sales channel territories correspond to the different sales channels that a business may employ to generate revenue. These territories could be as broad as online/digital and offline/physical or as granular as the specific sales channels like Instagram, YouTube, WhatsApp, etc.
Consider you have a dropshipping business.
A sales rep will handle all requests or orders originating through your business website. While another will take charge of social selling, and the third will carry out the same over email.
6 Steps to Map a Sales Territory
Now that you understand the different types of sales territories, the next obvious question would be, where does one start?
Here is a step-by-step guide to mapping sales territory:
1. Bring all sales reps on board
Who would have a better understanding of sales territories than the salespeople themselves?
So, get them involved as early as possible as you commence the journey of charting sales territories.
2. Define sales territory mapping goals
As with any sales strategy, the first step is to understand the primary motivator behind the move.
Start by establishing clear goals and objectives that you wish to achieve through sales territory mapping. It would be best if you could capture these goals in the SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) format.
Think something along the lines of customer sales territory mapping to increase market share by 10% amongst Gen Z in the next 10 months.
Such an unequivocal and concrete definition will also help identify the apt sales territory marketing technique.
3. Identify your best buyers
Your existing customer base is a treasure trove of information on what your target audience should ideally look like.
You can start by identifying your “best customers” and analyzing the common and underlying demographic or firmographic data. Use this information to create an ideal customer profile (ICP) that promises long-term customer lifetime value (CLTV).
This ICP would serve as a frame of reference for your salespeople so that they can focus on the leads or customers that matter.
Additionally, you can create multiple ICPs and assign them to different teams to further streamline sales efficacy.
4. Create and document territories
The combination of the sales territory mapping goals and the ICP may have shed some light on how you can divide your sales territory.
Now it’s time to put all the theoretical knowledge to practice to use and create territories!
Use the examples shared previously to define your sales territory based on the geographic location, industry, product, revenue potential, or anything else of value that applies to your sales organization.
You can also capture all minute details about these sales territories so that there are no overlaps or ambiguities – allowing your sales team to function with laser-sharp focus.
5. Assign sales territories
By this point, you have put in all the elbow grease that goes into defining sales territories.
You can now assign them to the sales reps or teams!
To do this, perform a SWOT analysis of the sales team or salespersons to visualize their individual strengths and weaknesses. Match these with the specific requirements of each sales territory to find out if they will be a good fit for the market segment.
In doing so, you will empower your sales team by allowing them to play to their strengths while also enriching the customer experience.
Might I say, a win-win for all!
6. Rinse and repeat
While defining and assigning sales territory is the primary goal, the ultimate objective is to improve sales efficiency.
So skip the set-it-and-forget-it approach and conduct periodic reviews.
How?
You can monitor the sales and account data regularly to evaluate your sales team's performance in their respective territory. Also, shuffle things up or even consider hiring opportunities to find reps that fit the territory.
Interested in learning more?
Check out our ultimate guide on sales territory planning.
Key Takeaways
You can divide your territory based on categories like geography, product type, customer characteristics, the industry you’re in, sales channel, and more.
This helps your sales team to deploy appropriate strategies and register success. Moreover, effective sales territory planning can result in an increase in sales objective achievement.
Go through the steps mentioned above to start sales territory mapping today!
