Territory Management

Session VI
Dated 1st September 2008
Why do you need to
design sales territories
• To gain thorough coverage of the market
• To define salespersons responsibilities
more accurately
• As a means of performance evaluation
• To improve customer relations
• To reduce selling expenses
• To match selling effort to fit customer
needs
• As a morale booster to the sales person
Procedure for establishing
sales territories
• Selecting the basic unit
• Evaluating accounts and sales
potential
• Analysisng the sales person
workload
• Designing basic territories
• Assigning the salesperson their
territories
Selecting the basic unit
• Define the territories based on
• Economic Planning regions
• Possible promotional areas
• Inequalities in population, Income,
Industry spread
• Market characteristics, the
distribution system
• Standing of the company
• Make base territories small
Evaluating accounts and
sales potential
• Input  Market information
• Listing of potential customers
• Classification of customers
Analysing the sales
person workload
• Workload is estimate of Time and
effort
• Different types of accounts will
depend on
• Frequency of calls
• The time for each call
• Travel time between calls
• Time spent on non selling activities
• Difficulties in calculating the
workload
• The type of selling  developing the
market
• The type of product  technical
• The newness of the product Or market
• The market share standing and
competitiveness of the firm in the
territory
Designing basic
territories
• Sales potential of one person in a
given area
• Establish the number, size and location
of customers, including current, past and
prospective accounts
• Number of calls per account and time
required per call
• A B C classification of the accounts to
estimate the time per call
• Drawing geographic boundaries to
estimate travel times
Definition of a good
territory
• Territories are easy to administer
• Sales potential is relatively easy to
estimate
• Travel time and expenses are
minimised
• Equal sales opportunity is provided
cross customers and prospects
• Workload is equalised
Assigning the salesperson
their territories
• Matching salespeople to
customers
• Factors contribute to the
effectiveness of salespeople
• Maximize this variables
Routing

• The circle system

• The hopscotch system
• The petal system
• Follow the left line
Time Management

• Better planning to work

• Less calling on unqualified or
unimportant prospects
• A systematic travel plan
• Better use of travel and waiting time
• More use of telephone for fixing
appointments
• Systematic paperwork
Factors that salespeople
have to assess in their
time allocation
• When to deal with paper work
• How long to spend at each call
• Traveling time
• Number of calls
• Order of calls
• New business development
• Non selling activities
• Social conversation
Problems in using models
in Territory management
• Dynamic markets require frequent
updating and changes in strategy
• Territory demand will vary
• Industry wise
• Seasonality
• Regional variation
• Salesperson’s performance varies
• Changes in
margin,price,cost,schemes etc
• Short run objectives and long run
objectives may be conflicting
• Time spent on customers are not
equal
• Customers propensity to buy will
depend on a few factors and would
vary
• Effect of Opinion leaders
• Complexity of the managements
mind
 
The Sales Story

• The story must revolve around

the prospect
• The story must bear an impact
on the Perception of the
Product by the Customer
• The story should allow the
Customer Talk
• Extempore story

• Readymade story