What are the most effective models for direct sales territory design?

1 Geographic model

The geographic model assigns sales territories based on the physical location of customers or prospects. This model is simple, easy to implement, and reduces travel time and expenses. It also allows sales reps to develop local expertise and relationships with customers. However, the geographic model can also create uneven workloads, sales potential, and competition among sales reps, depending on the density and diversity of the market. Moreover, it may not account for other factors that influence customer behavior, such as industry, size, or needs.

2 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 is more complex, but it can help align sales reps with customers who have similar needs, challenges, and opportunities. It can also help sales reps focus on the most profitable or strategic accounts and leverage their specialized skills or knowledge. However, the account-based model can also increase travel costs and time, reduce customer coverage, and create conflicts or overlaps among sales reps, depending on the criteria and segmentation used.

3 Hybrid model

The hybrid model combines elements of the geographic and account-based models to create more balanced and flexible sales territories. For example, a hybrid model can assign sales territories based on a combination of location and industry, or size and potential. This model can help achieve the benefits of both models while minimizing their drawbacks. It can also help sales managers adapt to changing market conditions and customer preferences. However, the hybrid model can also be difficult to design, implement, and monitor, as it requires more data, analysis, and coordination.

4 Dynamic model

The dynamic model assigns sales territories based on the current or expected behavior of customers or prospects, such as buying cycle, engagement level, or loyalty. This model is the most advanced, but it can help optimize sales performance and efficiency by allocating sales resources according to customer demand and value. It can also help sales reps respond to customer needs and expectations more effectively and proactively. However, the dynamic model can also be challenging to execute and maintain, as it requires constant data collection, updating, and communication.

Choosing the best model for direct sales territory design depends on several factors, such as your sales objectives, strategy, structure, team, and customers. You should also consider the costs and benefits of each model, as well as the availability and quality of data to support your decision. Ultimately, the best model is the one that helps you achieve your sales goals and satisfy your customers.

5 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?