Should your territory be covered by one distributor alone? Do you need to divide your territory into two? Is there an opportunity to assign a distributor per channel segment instead? Do you need to deploy your own salesmen to directly cover major accounts in the territory? These are just some of the critical questions that challenge us to re-evaluate how we see our territory.
 
How Sales Territories are Divided: Strategizing the Lay of the Land
          The primary intention in dividing areas into sales territories is to provide thorough and efficient sales coverage.As a sales strategy, territories are divided according to Geographic Units which may follow the literal geo-political map or other criteria designed by sales management. 
 
          A geographic unit could either be an OPEN or CLOSED territory. An OPEN territory has customers (usually National Chain Accounts or Political Accounts) that are not served by the local distributor but directly covered by the manufacturer or brand owner. A CLOSED territory is a traditional type which grants the distributor full exclusivity to cover all types of channels for all types of products of the Principal.
 
Sales Force Design in the Territory
          A territory can also be covered by more than one distributor partner.  There are companies who cover a sales territory through distributors who specialize in either channel or product category.  For example, a consumer goods company might have a distributor for Supermarket Channels, another one for Groceries and Sari-Sari Stores (Mom & Pop), and another distributor focusing on HORECA (Hotels, Restaurants, Canteens, Caterers). The distributors here are called channel specialists. Likewise, that same company may opt to partner with product category specialists in the territory. For example, one distributor carries only its beverage category and another distributor its snacks category covering almost the same set of customers in the territory. 
 
       As a distributor manager, you are expected to possess a high level of reconnaissance knowledge about your territory. How else can you develop robust plans and strategies to deploy your forces if you know little about your territory?  Your distributor partner maybe be an area or channel expert, but your main job is to set the tactical course and develop the roadmap for success.  You are the strategy provider within the army base. Your distributor is the strategy implementer in the field.
 
How to Know and Understand your Territory
       Here are some suggestions to improve your knowledge about your territory:
1.      Keep a Sales Territory Fact Book.
          At the end of this chapter is a sample copy of a Sales Territory Fact Book.  Keep this Fact Book updated because this will serve as your living document necessary to understand and develop your business in the territory.
          As a trainer for various companies across industries and countries, I discovered to my horror, that almost all distributor managers do not have a territory fact book. Small wonder that sales plans are a compilation of hits and misses and left up to divine intervention. And when someone leaves the field, the incoming distributor manager needs to start from scratch all over again in knowing the territory. There is a lot of time and energy wasted in the process. Moreover, the new manager is unprepared to head into the field 
 
2.     Conduct a SWOT Analysis of Your Position in the Territory.

a.     Strengths. What are the things we do right and better in the territory?
b.     Weaknesses. What are some standards we should meet to satisfy our customers and beat our competitors in the territory?
c.      Opportunities. What are some specific external trends or changes in the territory we could leverage on?
d.     Threats. What are some external activities that could damage our business or position in the territory?
 
3.     Conduct a SWOT Analysis of Your Competitors’ Position in the Territory. “Knowing the enemy is winning half the battle.” – Sun Tzu
a.     Strengths. What are the main strengths of our competitors in the territory?
b.     Weaknesses. What are the main weaknesses of our competitors in the territory?
c.      Opportunities. What are some specific external trends or changes in the territory that competitors could leverage on?
d.     Threats. What are some external activities that could damage our competitors’ business or position in the territory?
 
4.     Conduct regular visits to customers.
          Customers are very good sources of information. The better your relationship with them the more information (even sensitive ones) you will generate.

5.     Pay a visit to the local government offices or check out their websites.

          Local government offices are very good sources of information especially if you sell construction related products (e.g. cement, electric wires and cables, lumber, etc. Before a building project starts, it requires approval or permit from the municipal office. Also, check their websites. Technology has made our jobs easier. By looking online, a few clicks can save you the effort of understanding your terrain.


This is an excerpt from the best-selling book “Distributor Management:Winning Tools in Managing Distributors as Partners” by Emilio Macasaet III, who is the Chief Distributor Strategist of Mansmith and Fielders Inc., the leading marketing and sales training firm in the country.