This document discusses territory management and sales force productivity. It notes that selling costs have risen faster than sales volume per salesperson. Salespeople spend only 30% of their time doing face-to-face selling. To improve productivity, the document recommends focusing on high volume accounts and selling time. It also advises not pursuing unprofitable accounts. The concept of cost per call and break even sales volume are introduced to determine the sales needed to cover costs. Different models for allocating selling effort are presented.

1. Territory Management

2. TERRITORY
A territory
geographically defined area
assigned to a sales person
present customers
potential customers

3. SALES FORCE
PRODUCTIVITY
A crisis--
In the last ten years, selling costs
have risen almost twice as fast as
average sales volume per
salesperson

4. HOW SALESPEOPLE
SPEND THEIR TIME
Face-to-Face Selling = 30%
Telephone Selling = 21%
Waiting / Travelling = 20%
Administrative Duties = 17%
Service Activities = 12%

5. SALES FORCE
PRODUCTIVITY
How can we improve productivity?
Focus on high volume accounts
Focus on selling time

6. MINIMUM ACCOUNT
SIZE
Don’t pursue accounts that are
unprofitable!!

7. COST PER CALL
Cost per call is a function of
number of calls per day
number of days available to make
calls
direct selling expenses
Direct Selling Expenses
# Calls per day X # Days to Sell

8. COST PER CALL
Example (see Table 5.1; page 230)
Total Direct Expenses = $90,250
205 days to sell; average 3 calls per day
Cost per call = $90,250 / 205 x 3 =
$146.75

9. BREAK EVEN SALES
VOLUME
The sales volume necessary to cover
direct selling expenses
Breakeven Volume is a function of:
Cost per call
Number of calls to close
Sales costs as a percentage of sales

10. BREAK EVEN SALES
VOLUME
Cost Per call X # of Calls to Close
Sales costs as a % of Sales

11. BREAK EVEN SALES
VOLUME
See Table 5-2; page 231
Electronics Industry
--Cost per call = $133.30
--Number of calls to close = 3.9
--Sales Costs as a % of sales = 12.0
Breakeven volume = $133.30 x 3.9 / .
12
= $4,332.25

12. TERRITORY
IMPLICATIONS
Perform a customer by customer
analysis!
Assess selling strategy

13. ALLOCATION OF
SELLING EFFORT
Consider the time we spend with
customers!
Single Factor Models
Portfolio Models
Decision Models

14. SINGLE FACTOR
MODELS
Easy to develop and use
Classify accounts into categories based
on one factor, such as market potential
Assign all accounts in the same
category the same number of sales
calls
Decisions are made on the basis of one
factor. Differences among accounts
are not taken into consideration

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