sales territory management

1. Management of Sales
Territory

2. Sales Territory
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• Definition
 A group of present and potential customers assigned to an individual sales
person, a group of sales persons, a branch, a dealer, a distributor or a
marketing organization at a given period of time.
• For a firm
 A profitable sales territory is one which has a number of potential customers
that are willing to buy the category of products sold under the firm’s brand
name.

3. Sales Territory
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 Territories are defined on the basis of geographical boundaries in many
organizations.
 Sales territories help in better sales planning and effective operational
control.

4. Sales Territory
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• Advantages of designing a sales territory:
 Ensures better market coverage, effective utilization of the sales force, and
efficient distribution of workload among salespeople.
 Helps evaluate the performance of salespeople.
 Controls over the direct and indirect cost of sales function.
 Optimum utilization of sales time by salespeople.
 Enhances employees’ morale.
 Helps managers to better control and monitor sales and evaluate
programmes.

5. Designing Sales Territories
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1. Select the basic and appropriate geographic control units
2. Decide on the criteria for allocation
3. Decide on the starting point
4. Combine control units adjacent to starting point
5. Compare territories on allocation criteria and conduct workload analysis
6. Assign sales force to new territories
7. Modify territorial boundaries to balance workload and potential

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7. Steps in Designing Sales Territories
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8. Step 1: Select a Geographical-based Control Unit
• Control Unit:
• Region
• Division
• District
• Postal code area
• Metropolitan city
• Ascertainable Criterion:
• Market potential
• Market Opportunities
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9. Step 1: Select a Geographical-based Control Unit Cont…
• Number of prospective customers.
• Number of salespeople to be assigned.
• Allocation of sales tasks.
• Comparison of sales force performance.
• Adjustment of the size of the territory in future.
• Adaptation with market conditions.
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10. Step 2: Determination of Location and Buying Power of
Customers
• Identify present and prospective customers.
• Estimate demand potential.
• Ascertain market potential.
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11. Step 3: Decide Basic Territories
• Market build-up method.
• Sales breakdown method.
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12. Market Build-up Method
• Determine the optimal call frequencies.
• Determine the number of calls required for each control unit.
• Determine workload.
• Draw tentative territories.
• Construct final territories.
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13. Sales Breakdown Method
• Determine the sales potential for the entire market.
• Forecast sales potential of each control unit.
• Estimate the sales volume expected for each salesperson.
• Draw tentative sales territories.
• Draw final territories.
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14. Step 4: Assigning Salespeople to Territories
• Factors to be considered about salesperson:
• Knowledge and skill.
• Market Information.
• Acquaintance with geographies of the territory.
• Past performance.
• Knowledge of loacal language.
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15. Step 5: Formulate Territory Coverage Plans and Programmes
• Analyze the territory.
• Set territory sales plans.
• Decide on the tactical territory plans.
• Implement the plans.
• Control the tasks of territory sales force.
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16. Step 6: Set up Performance Indexes
• Sales: Sales cost.
• Gross profit: Sales.
• Net profit: Sales.
• Field sales costs: Total sales costs.
• Order: Call.
• Number of new accounts developed.
• No. of customers: No. of contacts made per salesperson.
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17. Step 6: Set up Performance Indexes Cont…
• Return on assets managed.
• No. of customers lost: Total no. of customers.
• Sales performance of best salesperson: Average sales performance
salespeople.
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18. Designing Sales Territories
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Factors influencing the modifications of a territory:
1. mergers, market, consolidation, split in division
2. sales force, turnover, customer relocations
3. product life cycle change, product line change

19. Territory Shapes
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20. •CUSTOMER CONTACT PLAN
•The customer contact plan involves scheduling sales calls
and routing a salesperson’s movement around the
territory.
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21. Scheduling refers to establishing a fixed time when the salesperson
will be at a customer’s place of business.
In theory, strict formal route designs enable the salesperson 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.
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23. Strategic Account Planning Matrix
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24. Sales Territories
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• New territories
 Assign the territories to the individual sales force.
 Suitable salespeople appointed for each territory and the exact responsibilities
are assigned.
 New salespersons appointed in areas closer to their place of stay.
 Experienced salespeople are assigned remote territories with a higher potential
for growth and sales realization.

25. Sales Territories
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• Use of information technology
 IT enabled services
 Computer programmes
 Simulation techniques

26. Sales Territory Mapping
• Sales territory mapping is an important sales management function.
• If it is not done scientifically, it may end in loss of revenue, increased
manpower cost and slow inventory management.
• A sales territory map is a plan of action for each salesperson as proper
mapping gives the sales manager ability to designate areas and assign
specific territories to each salesperson.
• If the sales managers can use a sales territory mapping software, they can
map territories well and allocate workforce and other resources for greater
revenue realization.
• There are two important driving factors for sales territory mapping are
necessity and fairness.
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27. Sales Territory Mapping
• There are four ways to map sales territory:
Understanding the target market demographics
Mapping current customers by territory
Even distribution of number of households
Use of PIN code for creating territory maps
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28. Thank You!
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