Typically one salesperson is responsible for servicing the customers in each sales territory. Territories are often categorized by geographic location. Territories are designed to give each salesperson equal sales potential and workload. Many companies set strict guidelines as to which customers a salesperson may solicit to avoid infringement on each others' sales.
One factor in determining territories is geographic location. A territory can be divided by states, counties,cities or even several territories within a city. The size of the territory depends on how often the salesperson has to physically visit the customer. In cases where sale calls need to be made to all customers on a daily or weekly basis, the area would need to be of a smaller size in order to make this possible.
Sales potential is another factor in determining territories. The number of potential customers within a particular area can determine the size of the territory. If you are marketing a product that is used by only one customer in a given city, your territory would need to be expanded to cover several cities.
Workload is also considered in determining sales territories. The number of accounts, the average size of each sale, the amount of time necessary to spend with the customer are factors considered when determining the workload of the sales force.
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