Sales Territory• A sales territory is a grouping of customers and prospects assigned to an individual salesperson
Reasons for Establishment of Sales Territories• To obtain thorough coverage of the market.• To establish a salesperson’s responsibility.• To evaluate performance.• To improve customer relations.• To reduce sales expense.• To allow better matching of salesperson to customer.• To benefit salespeople and the company.
FACTORS TO CONSIDER WHEN DESIGNING TERRITORIES DETERMINE DETERMINE SELECT BASIC SALES BASICCONTROL UNIT POTENTIAL IN TERRITORIES EACH UNITEVALUATE, REVISE CUSTOMER ASSIGN TO IF NEEDED CONTACT PLAN TERRITORIES
Selecting a Basic Geographical Control Unit:• Starting point in establishment of territories• Cities/District/States as the basis• Trading Areas as the basis • A trading area consist of the geographical region surrounding a city that serves as the dominant retail or whole sale center or both • Vary from product to product
Determining Sales Potential present in each control unit:• Identification of the buyers as precisely as possible• Present & potential buyers indicate Market Potential• Determination of Sales Potential I.e unit’s market potential that the company has an opportunity to obtain• Market potential is converted to sales potential by analyzing the historical market share , adjusting for changes in company & competitor selling strategies
SIX STEPS TO CONSIDER WHEN DETERMINING A FIRM’S BASIC TERRITORIES1. Forecast sales and determine 4. Tentatively establishsales potentials. territories.2. Determine the sales volume 5. Determine the number ofneeded for each territory. accounts for each territory.3. Determine the number of 6. Finalize the territories, andterritories. draw the boundary lines.
ASSIGN TO TERRITORIESSome salespeople can handle large territoriesand the travel associated with them; somecan’t. Some territories require experiencedsalespeople; some are best for new people.Some people want to live in metropolitanareas; others prefer territories with smallercities.
CUSTOMER CONTACT PLANThe customer contact plan involvesscheduling sales calls and routing asalesperson’s movement around theterritory.
Scheduling refers to establishing a fixedtime when the salesperson will be at acustomer’s place of business.In theory, strict formal route designs enable thesalesperson to: 1. Improve territorial coverage. 2. Minimize wasted time. 3. Establish communication between management and the sales force in terms of the location and activities of individual salespeople.
THREE BASIC ROUTING PATTERNSStraight-Line Pattern First Call Base c c c c c Work BackCloverleaf Pattern c Major-City Pattern c c c c 2 3 c c c cc Base c 1 c c c c c c c c 5 4 c c c Each Leaf Out and Back Same Day 1 - Downtown
Using the Telephone for Territorial Coverage 1. Sales generating • Selling regular orders to smaller accounts. • Selling specials, such as offering price discounts on an individual product. • Developing leads and qualifying prospects. 2. Order processing • Ordering through the warehouse. • Gathering credit information. • Checking if shipments have been made. 3. Customer service • Handling complaints. • Answering questions.
EVALUATION AND REVISION OF SALES TERRITORIES Determine, number, location & size of customers & prospects in each tentative territory Estimate time required for each sales call Determine length of time b/w calls Decide call frequencies Calculate number of calls possible within a given period Adjust the number of calls possible during a given period by desired call frequencies for different classes of customers & prospects Check out the adjusted territories with sales personnel
Equalized WorkloadThis method uses the number, location, and sizeof customers and prospects to determine thefrequency of sales calls and amount of time a calltakes by using such data as: • Time required for each sales call. • Frequency of sales calls per given customer. • Time intervals between sales calls. • Travel time around territories. • Nonselling time.
• Adjusting for differences in Coverage Difficulty & Redistricting Tentative Territories: – Determine, number,location & size of customers & prospects in each tentative territory – Estimate time required for each sales call – Determine length of time b/w calls – Decide call frequencies – Calculate number of calls possible within a given period – Adjust the number of calls possible during a given period by desired call frequencies for different classes of customers & prospects – Check out the adjusted territories with sales personnel