How to Determine Your Territory - 13/100 Marketing Secrets

Have You Considered the Boundaries of Your Strategic Territory?

It is a fundamental theory of war that you should never fight beyond what your supply lines can support.  And one might think this means a business should limit the territory it tries to serve.  In many cases that is the right decision.  On the other hand, each business type needs a certain amount of population or spendable income or other similar metric in order to survive. 

My experience with local businesses is that they commonly feel concerned that they don't have enough population to get the sales they need.  Only rarely do I find companies who evaluate the full range of metrics that will effect their ability to hit their sales goals. 

Let's look at a couple of examples.  Consider the retailer or service provider like a lawyer or dentist.  Most marketing folks suggest that the natural reach for such a business is a radius of five miles.  That reach is determined by understanding how far a typical person is willing to travel to get the best service, price, or a particular product or brand. 

That natural reach is also a product of the visibility of the client base.  Customers within that five mile range are more likely to have gone past a brick and mortar location or heard by word of mouth about the business.  The further away, the less likely that these "free" advertising methods will bring in traffic.  Therefore, the larger the target radius, the more expense it takes to reach the clients. 

This means that it isn't automatically wise to attempt to increase the footprint of the service area.  On the other hand, it may be necessary to risk the advertising expense if there just isn't enough of a customer base to make a living.  However, even if that's the case, it isn't the only solution.  Adding other product lines or services might be a better, less risky, less expensive way to increase sales. 

You can extrapolate the above example of a small business to any manufacturer, distributor, chain, or large service provider.  As a manufacturer serving the entire US and Canada, I felt the need to reach out to the export market.  It was great for trips to exotic lands that were a write off.  But the cost of marketing, maintaining relationships, freight, foreign language packaging, local taxes and regulations, not to mention learning curves, made it very hard to make a profit on that business. 

Get the demographic information for your territory and determine whether you can hit your goals within your natural territory.  This will then help you make a lot of decisions about the rest of your marketing strategy.  Start by estimating your natural reach. You may be able to get this by looking at sales information and finding where your clients live. Maybe just start asking folks for a few days.  You can go online and get demographic information for any city in the US.

If you are dealing nationally or internationally, what are the realities in your market? Every industry has statistics about the number of customers or sales of items or services that may give you an idea of some realistic sales goals.