territory planning

8/8/2019 territory planning

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TIME MANAGEMENT

Effective time management will significantly helpa salesperson improve his performance.

There has been a fundamental shift in

organizations' approach to time managementwith the advent of better technological options.

Advancements in technology havesimultaneously led to a significant increase intime pressure on the salesperson.

However, technological advancements have alsoprovided several techniques to help salespersonsmanage their time efficiently.



IMPORTANCE

Better market coverage

Reduced selling costs

Improved customer service

More accurate evaluation of sales force personnel



Territory planning Territory - Mix of customers and prospects in a geographic area

Territory planning - Process of a sales team

Analysis and planning around key accounts

Analysis of opportunities within assigned sales territory

Analysis and goal setting around:

companys products and services

market segments,

competition,

Trends

profiles of key accounts.

Developing strategy for the territory



Core attributes of a territory plan-

opportunity/threat analysis,objectives,

strategy,

account identification and analysis,situational analysis,

estimates of account potential,

detail on territory/account tactics.

Updating quarterly based on on-goingplanning activities.



Importance

Achieve greater ROI within sales territories

Increase return on time and resource

management Increase revenue, win-rate, and volume

Strengthen customer relationships based on

value, not price Grow market share with effective market

influence campaigns



Create approaches to achieve aggressive

revenue goals Manage sales territories as a business

Validate competitive position

Develop formidable competitive strategies

Align companys product/service offering with

current market demands

Build a strategic plan to strengthen accountrelationships

Maximize territory results and revenue



Challenges

Salespeople often don't feel accountable or "bought in

Unattainable sales targets

Lack of input from the field.

Disorganized and inefficient in territory sales activities

Lack good business analysis and planning skills.

Tools are not typically used to assist.



Tools

ContactManagement

ACT

Goldmine

Full CRM

Siebel

Onyx

Microsoft CRM



Steps

Analysis

Customersegmentation

Product/lineanalysis

Channelanalysis

Prospectanalysis

Goal setting Strategy

Tactics

Executionand follow up



SALES TERRITORIES

A sales territory comprises a number of present and

potential customers, located within a given

geographical area and assigned to a salesperson,

branch, or intermediary.

Sales territories should be designed efficiently so

that the potential of salespersons can be exploited to

the maximum.



Reasons for establishing sales

territories

Companies form sales territories mainly to

maximize sales and profits. There are 3 pairs of guiding principles that cause

sales management to employ territories in their

operations:

(a) customer-related

(b) salesperson-related

(c) managerial



Customer-Related

REASONS

Provide intensive

market coverage

Provide excellent

customer service

BENEFITS

Produce higher sales Produce greater

satisfaction



Salesperson-Related

REASONS

Generates enthusiasm and motivation

Facilitate performance evaluation

BENEFITS Lead to less turnover,

employee satisfaction

Offer rewards related to effort, pay-for-performance



Managerial-Related

REASONS

Enhance control

Coordinate promotion

BENEFITS Tight handle on selling expenses / allocate cost by

territory

Plan for staff incentives



Reasons for Revising Territories

Major accounts open or close down facilities, move

into or out of the area, or shift in customersbusiness

geographically or technological in nature

Aggressive domestic or international competition

(markets are dynamic and conditions change)

Changes in companys buying policies or structure

Salespersons related revision due to physical,

social, or psychological changes.



A salesperson may display a reduced energy

level, family problems of various kinds can effectterritory performance significantly.

If a territorys sales potential was underestimated

or overestimated.

Managers can also find that they need to realign

territories as new product lines are introduced into

the companys product mix and the presentation

and servicing burdens become too large under old

arrangement.



Reasons for NOT establishing sales

territories

When a company is small (few resources)

When friendship sales is important to

maintain for long-term relationship When high technology selling is involved. In

high technology application there are often a

very limited number of potential customers

nationwide that require highly specialized

advice.



Developing Territories

Drawing up territories ranks among the most

important responsibilities of sales managers.

It affects the sales force morale andperformance.

Results can be measured by sales volume,

relative market share or profit.



Factors to consider in establishing

Territories

Sales persons workload and nature of the job, for

e.g. a prospecting salesperson can handle alarger territory assignment then a person who

must provide full service for each account. The type of product / product lines

The type of competition faced by the company ineach territory.

The desired intensity of the market coverage /challenging territories



Channels of distribution available and

transportation system Sales potential and servicing requirement.

Limited

potential territories can be used as a traininggrounds for new members of a sales force.

Salesperson can be assigned to more

challenging territories in accordance with theirperformance.



CRITERIA FOR TERRITORY DESIGN

Sufficient potential

Reasonable size

Adequate coverage

Minimum impediments



Sales territories are designed using the

three methods

1. BUILDUP METHOD

2. BREAKDOWN METHOD

3. INCREMENTAL METHOD



BUILDUP

The buildup method consists of designing sales territories by

assessing the attractiveness of current and prospective

customers.

In this method, current and prospective customers areidentidfied and their sales requirements analyzed individually.

Subsequently the salespersons are assigned territories on the

basis of the sales volumes and the number of calls they are

supposed to make to these accounts.



BREAKDOWN METHOD

The breakdown method is the reverse of the buildup method.

the market potential for the product is identified and then the

market share that the company is targeting assessed.

Based on this, sales are forecast. This is followed by determining the average number of sales

that each salesperson is required to make and the territories

are then accordingly allocated to individual salespersons.



INCREMENTAL METHOD

In the incremental method, additional territories are

created as long as the revenues generated from

them exceed the cost of serving them.



Procedures for developing territories

Identify objectives and criteria for territory

formation

Bases for developing territories

Assigning sales personnel to territories



ALLOCATION

Once the designing of territories is completed,

salespersons are allocated to individual

territories according to their capabilities.



Operating the territory management

system

ROUTING

SCHEDULING



ROUTING

Routing and scheduling are two widely accepted

techniques for territory management.

Routing refers to the process of deciding the pattern

of movement of a salesperson in his territory formaking sales calls in a way that minimizes the total

distance traveled, the travel expense and the travel

time.



SCHEDULING

Scheduling involves allocation of time to the

various activities that a salesperson is involved in

during a day, week and a month.

territory planning

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