How can you choose the best sales territory model?

1 Geographic model

The geographic model assigns sales territories based on the physical location of customers or prospects. This model is simple to implement and can reduce travel costs, improve local knowledge, and foster relationships with customers. However, it can also create uneven workloads, limit cross-selling opportunities, and cause territorial conflicts among sales reps. The geographic model works best for businesses that sell products or services that are not highly specialized or differentiated, and that have a large and dispersed customer base.

2 Product-based model

The product-based model assigns sales territories based on the type or category of products or services that customers or prospects buy or need. This model can increase sales expertise, enhance customer service, and encourage product innovation. However, it can also increase travel costs, create communication silos, and reduce account penetration. The product-based model works best for businesses that sell complex or diverse products or services that require specific knowledge or skills, and that have a segmented or niche customer base.

3 Account-based model

The account-based model assigns sales territories based on the characteristics or attributes of customers or prospects, such as industry, size, revenue, or potential. This model can optimize sales performance, align sales with marketing, and deliver personalized value propositions. However, it can also require more research and analysis, create resource gaps, and increase competition among sales reps. The account-based model works best for businesses that sell high-value or customized solutions that require strategic partnerships, and that have a concentrated or high-potential customer base.

4 Hybrid model

The hybrid model combines two or more of the above models to create sales territories that suit the specific needs and goals of the business. This model can offer more flexibility, adaptability, and scalability. However, it can also create more complexity, confusion, and inconsistency. The hybrid model works best for businesses that sell a mix of products or services that vary in complexity and value, and that have a diverse and dynamic customer base.

5 Best practices

No matter which sales territory model you choose, you should adhere to some best practices to guarantee success. These include defining clear and measurable objectives and criteria for your plan, analyzing market data and customer segments to recognize opportunities and challenges, involving sales reps and managers in the planning and feedback process, balancing sales territories based on workload, potential, and performance, as well as monitoring and evaluating your plan regularly and making adjustments as needed. By selecting the optimal sales territory model for your business, you can optimize your sales operations and achieve your revenue objectives.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?