Expect Sales Territories To Be Profitable

Profit expectations should be broken to levels that make sense. Obviously any defined profit center within an organization should have a unique budget and profit expectations established for it. But an often overlooked "profit center" is a sales territory. When a business has an outside sales force, each territory can be treated as a profit center and be run much like an operating unit. Sales people should be held accountable for making sales and gross profit targets and each territory should meet certain profit expectations. Tracking profitability and sales by territory can help in identifying problem accounts, expense abuse, promotional effectiveness, pricing problems, customer leakage and other relevant issues that can be tracked directly to a particular sales representative. Sales people have a lot to do with territory profitability and treating a territory much like any other profit center allows the business to essentially run a sales territory like a business rather than treating it like a set of customers linked by geography.

Good Luck and Good Selling!
Russ