What Is a Sales Territory?

A sales territory is a demographic a salesperson or team is responsible for handling. It is often geographic; a salesperson might be in charge of the western half of a country, for example. It can also include specific types of customers such as all the wholesalers who work with the company, or specific types of businesses that order from the company. A pharmaceutical company might have sales territories covering large animal veterinary practices, human medical clinics, small animal clinics, and so forth. The division of territories places the best salesperson in each territory to maximize sales numbers and customer satisfaction.

The personnel responsible for a specific sales territory may have an exclusive agreement. This means that no other representatives of the company can make sales in their area. In other cases, the company does not offer this protection, and salespeople may compete in the same territory. Competition can potentially be damaging, and companies consider their options carefully when they assign territory and decide what kinds of rights to grant to salespeople.

Within a sales territory, salespeople travel to take orders, promote the company, and answer questions. Companies usually design geographic territories for efficiency, to limit travel expenses and keep employees within a specific range. The representatives travel with product samples, brochures, order forms, and other materials. Along the way they recruit customers and enrich the relationship with existing clients with tools ranging from free samples to taking them out to lunch for meetings.

Many companies grant a high degree of autonomy to their salespeople. Each person is responsible for developing an appropriate strategy for his own sales territory. Sales staff may request support from the company such as special discounts, new promotional materials, and other things they may find helpful for landing sales. They also usually have a responsibility to promote company-wide campaigns that introduce new products or revitalize sales for existing products the company wants to sell in larger numbers.

If a drug company initiates a big push for a specific medication, for example, all salespeople will focus on promoting sales of that product in each sales territory. This usually corresponds with mass media campaigns so consumers are exposed to ads, can request the product, and will receive it from merchants who prepared with orders ahead of time. Companies communicate closely with their sales staff to make sure everyone knows about advertising campaigns in the pipeline and is prepared to advise customers on the best purchasing and marketing choices for their needs.