A sales territory is a geographical area containing present and potential customers who can be effectively and economically served by a single salesman, branch dealer or distributor.
Sales territory design and management are important to the success of the sales force.
Aspects and Characteristics of Sales Territory
Following are the important aspects and characteristics of sales territory
- A sales territory is the geographic area containing a number of present and potential customers.
- Different groups of customers are formed by a firm through allotment of territories.
- A sales territory is assigned to a salesman, branch or middlemen.
- Although some firms have developed territories solely on the basis of geographic considerations, a more common approach is to establish a sales territory on the basis of class of customers.
- Territories are often classified according to sales potential.
- Sales territory is the basic unit of the sales planning and sales control. 14 Limitations or Problems in Setting Sales Quota (Explained).
- It represents a certain segment of the future sales and profit of the company.
- It is a sales field of a company, from which demand for a certain class of goods is likely to arise.
- This territory may be local, provincial, national or international.
- The emphasis in the sales territory concept is upon customers and prospects rather than upon the area in which an individual salesperson works.
- Whether designated geographically or not, a sales territory is a grouping of customers and prospects that can be called upon conveniently and economically by an individual salesperson.
- A sales territory may or may not have geographic boundaries.
- A sales territory can be thought of as a franchise from which must come sufficiently to be profitable to management, who underwrites it, and to the salesperson responsible for working it.
- Territories are well suited to most selling situations.
- Territories are a long-lasting structural arrangement. 23 Key Benefits and Importance of Establishing Sales Territory (With Examples).
- Since sales territories are microcosms of a firm’s total market, this involves scaled-down managerial duties.
- As territory managers, salespeople must first be planners. It is the responsibility of the sales representatives to plan their activities in their territories.
- Each sales territory must be cohesive in a way that promotes the efficiency and effectiveness of the sales effort.
Thus, now you know all the important aspects and characteristics of sales territory.
What defines a sales territory?
The sales territory is an important business unit containing the organization’s customers.