group of present and potential customers assigned to a sales person, a group of sales person, a branch, a dealer, a distributor or a marketing organization at a given period of time.
WHO IS RESPONSIBLE FOR TERRITORIAL DEVELOPMENT?Development of sales territories is usually the responsibility of the sales manager overseeing the larger sales units within the organization.
Generating New Accounts
Managing Existing Accounts
Personal Time Management
WHY ESTABLISH SALES TERRITORIES?
To obtain thorough coverage of the market. To establish each salesperson's responsibilities. To evaluate performance. To improve customer relations. To reduce sales expense. To allow better matching of salesperson to customer s needs. To benefit both salespeople and the company.
Why sales territories may not be developed: Salespeople may be more motivated if theyare not restricted. The company may be too small. Management may not want to take the time, or have the know-how. Personal friendship may be the basis for attracting customers.
STEPS IN DESIGNING SALES TERRITORIES
Select Basic Control Unit
Determine Basic Territories
Evaluate, Revise if Needed
Customer Contact Plan
Assign to Territories
1. SELECT BASIC CONTROL UNITS States Countries Cities and zip-code areas Metropolitan statistical areas Trading areas Major accounts A combination of two or more factors
2. ANALYZE SALESPEOPLES WORKLOADSWorkload is the quantity of work expected from sales personnel. Three of the main influences on workload involve the nature of the job, intensity of market coverage, and type of products sold.
3. DETERMINE BASIC TERRITORIESThe breakdown approach uses factors such as sales, population, or number of customers.Forecasted Sales Sales Force Size = Average Sales per Salesperson
SIX STEPS TO CONSIDER WHEN DETERMINING A FIRMS BASIC TERRITORIES
1. Forecast sales and determine sales potentials. 2. Determine the sales volume needed for each territory. 3. Determine the number of territories.
4. Tentatively establish territories.
5. Determine the number of accounts for each territory. 6. Finalize the territories, and draw the boundary lines.
4. ASSIGN TO TERRITORIESSome salespeople can handle large territories and the travel associated with them; some cant. Some territories require experienced salespeople; some are best for new people. Some people want to live in metropolitan areas; others prefer territories with smaller cities.
5. CUSTOMER CONTACT PLANThe customer contact plan involves scheduling sales calls and routing a salespersons movement around the territory.
Scheduling refers to establishing a fixed time when the salesperson will be at a customers place of business.In theory, strict formal route designs enable the salesperson to: 1. Improve territorial coverage. 2. Minimize wastage of time. 3. Establish communication between management and the sales force in terms of the location and activities of individual salespeople.
Three Basic Routing Patterns1.Straight-Line PatternFirst callc
Three Basic Routing Patterns2.Cloverleaf Patternc c c c c c c c c c c c
Basec c c c c c c c c c c c
Each leaf out and back the same day
Three Basic Routing Patterns3.Major-City Pattern
2 1 4
31 = Downtown
Using the Telephone for Territorial Coverage1. Sales generating Selling regular orders to smaller accounts. Selling specials, such as offering price discounts on an individual product. Developing leads and qualifying prospects.
Using the Telephone for Territorial Coverage continued2. Order processing Ordering through the warehouse. Gathering credit information. Checking if shipments have been made.
Using the Telephone for Territorial Coverage continued
3. Customer service Handling complaints. Answering questions.
Most people can benefit from adopting the following practices: Satisfying part of the service needs of accounts by telephone. Assigning smaller accounts to telephone selling. Doing prospecting, market data gathering, and call scheduling by telephone. Carefully scheduling visits to distant accounts, replacing some with telephone calls.
6.EVALUATION AND REVISION OF SALES
Territorial control is the establishment of standards of performance for the individual territory in the form of qualitative and quantitative quotas or goals.
SOME CONCEPTS:OPEN SALES TERRITORY: Open sales territories are those left vacant until new salespeople are assigned to them. Vacant territories experience the following: Lost sales due to the vacancy. Lost sales due to the time needed for the new salesperson to build sales productivity.Sales leakage refers to the lost sales due to both the vacancy and the time required for the new salesperson to produce at average.
A Portfolio ModelCompetitive Position Weak Strong Core Accounts HighAccounts are very attractive. Invest heavily in Selling resources.
Growth AccountsAccounts are Potentially attractive. May want to invest in heavily
Accounts are very Accounts are unattractive. moderately attractive. Minimal investment Invest to maintain current position. of selling resources.
O P P O R T U N I T Y
Segment 1- Core Accounts Attractiveness: Accounts are very attractive because they offer high opportunity and sales organization has strong competitive position. High Selling Effort Strategy: Accounts should receive a heavy investment of sales resources to take advantage of opportunity and maintain/improve competitive position.
O P P O R T U N I T Y
Segment 2 Growth Accounts Attractiveness: Accounts are potentially attractive due to high opportunity, but sales organization currently has weak competitive position. High Selling Effort Strategy: Additional analysisshould be performed to identify account where sales organizations competitive position can be strengthened. These accounts should receive heavy investment of sales resources, while other accounts receive minimal investment.
O P P O R T U N I T Y
Segment 3 Drag Accounts Attractiveness: Accounts are moderately attractive due to sales organizations strong competitive position. However, future opportunity is limited. Selling Effort Strategy: Accounts should receive a sales resource investment sufficient to maintain current competitive position.
O P P O R T U N I T Y
Segment 4 Problem Accounts Attractiveness: Accounts are very unattractive: they offer low opportunity and sales organization has weak competitive position. Low Selling Effort Strategy: Accounts should receiveminimal investments of sales resources. Less costly forms of marketing (for example, telephone sales calls, direct mail) should replace personal selling efforts on a selective basis, or the account coverage should be eliminated entirely.