How to Divide Sales Territories

Geographic Division

One of the most intuitive ways to divide sales territory is by geographic area. When thinking about how to divide up your sales territory, geographic division ensures streamlined travel, clear ownership, and local insight. It's beneficial when sales reps must build close relationships within a defined region.

Demographic or Population-based Division

Dividing sales territories based on population or demographic data ensures your salespeople target areas with the right customer profiles. Knowing how to divide sales territories by demographic segments helps match reps with markets where they can be most effective. This data-driven approach supports more intelligent resource allocation, higher close rates, and better ROI.

Industry or Niche Segmentation

When considering how to divide up your sales territory, segmenting by industry or niche is an effective way for teams to target specialized markets. Doing so vertically helps your reps become customer needs and competitive dynamics experts. This in-depth focus can elevate market penetration and boost your bottom line.

Account or Company Size Division

Dividing territories by company size has important implications for your reps. It ensures that their efforts are focused on accounts matching their experience or quota capacity. This approach defines clear boundaries for how to divide territories for sales, balancing workload across large and small accounts.

Product Line-based Division

If your business has multiple product lines, the question of how to divide sales territories can be answered by what you offer. Aligning your product portfolio with your sales teams' product knowledge will improve win rates and upsell potential. It also simplifies training and performance benchmarking across focused territories.

Alphabetical Division

Though less common, choosing how to divide up your sales territory by the alphabet can simplify rep assignments and onboarding. This method makes managing accounts easier, especially in smaller or global teams. It also reduces confusion over ownership and ensures your teams follow up accordingly.

Market and Revenue Potential Approaches

A high-performance way to divide sales territory is by market or revenue potential. Here, you allocate reps based on forecasted demand to ensure high-value zones get enough coverage and support. It balances territories regarding opportunity, not just geography, driving better growth and revenue outcomes.

Define Sales Objectives

An effective territory management plan starts with honing in on your key objectives. Consider what you will prioritize:

• Sales productivity and utilization
• New account prospecting
• Workload balance
• Revenue growth
• Cost reductions
• Resource allocation
• Customer service and relationship continuity
• Product profitability
• Balanced quotas
• New accounts
• Competitor locations

Selecting your primary objective will guide your territory division process.

Segment and Score Customer Base

Now, segment your target customers and prospects into logical groupings. We outlined various ways to divide sales territories earlier in this blog. Quality segmentation supports smarter sales prospecting and more efficient resource allocation.

Design Territory Boundaries

You'll want to build sales territories with clearly defined boundaries to help with accountability, reporting, and optimization. Reps spend about 35% of their total time selling, so ensure that they maximize their selling time and minimize travel. Aim for equal opportunity and minimal overlap so that your sales team can dedicate their efforts effectively.

Assign Reps Strategically

Resource management is another critical consideration. With limited budgets, staff, and support, you must consider allocating and rightsizing your sales resources to ensure each territory is supported effectively. The great news is that you can achieve that result in minutes using a territory optimizer.

Document Territories and Communicate

It would be best to involve your sales managers and reps in the final stages of your territory division process whenever possible. That all-important local knowledge and feedback can prevent disruption and smooth transitionary periods. Continuity can be crucial to future customer growth – see our 12 Proven Territory Management Tips and learn why businesses need territory management.

Build Territory Action Plans

Supply reps with tailored plans, account lists, route maps, and KPIs aligned to their territory. Empower them with the resources they need to execute effectively and track progress. This clarity lets reps focus on results, not logistics, especially when supported by GIS tools for business.

Monitor Performance and Optimize

Once you divide sales territories, you must monitor performance and meet your priority and revenue expectations. We recommend a minimum quarterly review (annually as a minimum). Sales territories should not be set in stone, so build in some flexibility to update your alignments on the fly.

Balance Workload and Sales Potential

A practical approach to dividing sales territories balances workload and revenue opportunity across all reps. This is essential because balancing workload prevents burnout, reduces performance gaps, and creates a fair system that drives motivation. If you overlook this vital aspect, you risk underutilizing strong reps or overwhelming others.

Use Data-driven Territory Design

Data-driven decisions are objective, scalable, backed by insight, and fundamental to progress. Data should be at the heart of how to divide up your sales territory, from customer value to market density. Mapping tools allow you to visualize where reps are needed most and how to design territories that make the most impact.

Involve Sales Teams and Managers

Sales teams perform exponentially better when motivated and clear on the value of the objectives before them. Involving your sales teams and managers in your territory management plan will boost morale and create a sense of ownership. It also ensures that sales territories are created in collaboration with teams that intimately understand the sales process.

Leverage Territory Mapping Tools

You need territory mapping software to maximize your time and achieve the best data-backed territory designs. Look for a solution offering robust mapping and visualization with territory and route optimization. The power trio from eSpatial is the best available and easiest to use — see eSpatial pricing options to get started.

Track Key Sales KPIs

Once you implement your plan for how to divide territories for sales, monitor key metrics such as territory coverage, sales, and quota attainment. These KPIs help you measure rep performance and identify areas needing improvement. Tracking results ensures your initial efforts to divide sales territory yield sustainable returns.

Reevaluate and Adjust Regularly

Territories aren't static; customer needs, business goals, and team structures shift over time. Review your approach to how to divide sales territories quarterly or biannually to ensure ongoing relevance and efficacy. The ability to pivot and adjust means you’re going one step further than dividing territories—you’re managing for long-term success.