Transcript Territory Design - Southern Methodist University
Territory Design & Management
Sales Management Marketing 3345
Events triggering sales territory adjustments Mergers Division consolidation Division split Sales force turnover Plant relocations Product line changes 1 Select geographic control units 2 Decide on allocation criteria 3 Choose starting points 4 Combine control units adjacent to starting points 5 Compare territories on allocation criteria 6 Assign salespeople to new territories Territory Design Process Revise territory boundaries to balance workload and potential
Territory Design Procedures
What are triggering events?
The Buildup Method -- Six steps 1. Select control units
Census tracts -- good for dividing cities
Counties - convenient and data readily available 2. Determine Allocation Criteria
Territory balance -- effect on morale
Customer balance - distribute commission Potential balance - share business growth
Size balance - reduce transportation costs
Geographic Control Units Used in Territory Design
Countries States or provinces Counties Metropolitan areas Cities Zip codes Census tracts Customers
Territory Design Procedures
3.
Choose starting points
Salesperson’s home
Large customer - cut transportation cost Big city - convenient for services
4.
Combine Adjacent Control Units 5. Compare Sales Territories
Mountains, roads, population center locations?
6.
Assign people to Sales Territories
Kentucky Counties, Major Cities, and Population Centers
The numbers in each county are population figures and are a measure of potential.
OHIO INDIANA WEST VIRGINIA ILLINOIS VIRGINIA Kentucky Counties, Major Cities, and Population Centers TENNESSEE
ILLINOIS Three Kentucky Sales Territories The numbers in ach county are population figures and are a measure of
Territory borders
INDIANA OHIO WEST VIRGINIA VIRGINIA TENNESSEE Three Kentucky Sales Territories
Comparing Three Kentucky Sales Territories Potential as Measured by Territory
1 2 3
Population
1,124,897 1,129,290 1,131,137
Number of Counties
47 27 43
Figure
11-4: Dividing a Large Territory
Territory Design Procedures
Talley’s Workload Approach
No starting points Equates work to be done May lead to imbalance on size Often raises travel costs
Good when reps are on salary Key: optimal call frequency for particular classes of customers
1.
Workload Method
Classify all customers into sales volume categories 2.
Determine the frequency with which each type of account should be called upon and the desired length of each sell 3.
Calculate workload involved in covering entire market 4.
Determine time available per salesperson 5.
Apportion the salesperson’s time by task performed 6.
Calculate the number of salespeople
Experiences of a Consumer Durable Goods Manufacturer with Territory Design Deployment Analysis for Two Territories Trading Area* Present Effort (%) Recommended Effort (%)
Andy Total 1 2 3 4 5 10 60 15 5 10 100 4 20 7 2 3 36
* Each territory is made up of several trading areas.
% The percentage of salesperson time spent in the trading area (100% = 1 salesperson).
Experiences of a Consumer Durable Goods Manufacturer with Territory Design Deployment Analysis for Two Territories Trading Area* Present Effort (%) Recommended Effort (%)
Sally 1 2 18 7 81 21 3 4 5 35 11 35 Total 5 6 5 30 100 11 77 236
* Each territory is made up of several trading areas.
% The percentage of salesperson time spent in the trading area (100% = 1 salesperson). Thus, the deployment analysis suggests that Andy’s territory requires only 0.36 salespeople, which Sally’s territory needs 2.36 salespeople for proper coverage.
CALLPLAN Approach
Salesperson Input 1.
What sales level will result from each current customer and prospect if: •no. calls that are made •one half the present calls are made •present level of calls is continued •50 percent more calls are made •a saturation level of calls are made 2.
Probabilities that prospects will be converted into customers given the different call frequencies
CALLPLAN Approach
CALLPLAN Output 1.
Expected sales for all feasible call frequencies 2.
Optimal number of calls for each client and prospect 3.
Length of call for each client and prospect
Computer Based Territory Designs
Computers save time
Need location & number of customers & starting points
Program options
minimize moment of inertia
Graph data & draw boundaries -- not optimal
design optimal territories -- expensive Applications -- pharmaceutical reps
Sales Territory Mapping Programs Vendor GeoQuery Corp. GeoQuery TTG,Inc.
Sammamish Data Systems Metron, Inc.
Package STARmanager GeoSight Professional TerrAlign Description Price Interactive maps for travel planning and territory analysis. Direct links to contact management program.
$295 Territory mapping system that integrates sales and marketing data for interactive territory analysis, realignment, and monitory.
$995 Geographic information systems $1,850 for sales territory creation and management. Includes address matching.
Optimal sales territory alignment $20,000+ and analysis. Exclusive OptAlign technology automatically balances territories and decreases driving time.
Figure 1 Before Realignment No. of territories 50 40 30 20 10 0
-40 -30 -20 -10 0 10 20 30
Percent deviation from average
40
SOURCE:
Prabha Sinha and Andris Zoltners, “Matching Manpower and Markets,”
Business Marketing
, September 2008, p. 95.
Figure 2 After Realignment No. of territories SOURCE: 50 40 30 20 10 0
-40 -30 -20 -10 0 10 20 30
Percent deviation from average
40 Prabha Sinha and Andris Zoltners, “Matching Manpower and Markets,”
Business Marketing
, September 2008, p. 96.