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    Sales Territory Design & Management

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    srijit verma
    Sales territories refer to geographic areas assigned to salespeople to manage accounts and pursue sales opportunities. When designing territories, factors to consider include evenly dividing workload, providing equal compensation opportunities, and balancing existing and new accounts. The procedure for setting up territories involves selecting basic geographical units, determining sales potential, combining units into tentative territories, and adjusting for differences in coverage difficulty. Sales managers must also consider salesperson ability and fit when assigning individuals to territories. Effective territory management includes planning efficient routes, scheduling time, and using tools to aid time management.

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    Sales Territory Design & Management

    Uploaded by

    srijit verma
    129 views20 pages
    Sales territories refer to geographic areas assigned to salespeople to manage accounts and pursue sales opportunities. When designing territories, factors to consider include evenly dividing workload, providing equal compensation opportunities, and balancing existing and new accounts. The procedure for setting up territories involves selecting basic geographical units, determining sales potential, combining units into tentative territories, and adjusting for differences in coverage difficulty. Sales managers must also consider salesperson ability and fit when assigning individuals to territories. Effective territory management includes planning efficient routes, scheduling time, and using tools to aid time management.

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    Sales Territory

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    Sales territories refer to geographic areas assigned to salespeople to manage accounts and pursue sales opportunities. When designing territories, factors to consider include evenly dividing workload, providing equal compensation opportunities, and balancing existing and new accounts. The procedure for setting up territories involves selecting basic geographical units, determining sales potential, combining units into tentative territories, and adjusting for differences in coverage difficulty. Sales managers must also consider salesperson ability and fit when assigning individuals to territories. Effective territory management includes planning efficient routes, scheduling time, and using tools to aid time management.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    129 views20 pages

    Sales Territory Design & Management

    Uploaded by

    srijit verma
    Sales territories refer to geographic areas assigned to salespeople to manage accounts and pursue sales opportunities. When designing territories, factors to consider include evenly dividing workload, providing equal compensation opportunities, and balancing existing and new accounts. The procedure for setting up territories involves selecting basic geographical units, determining sales potential, combining units into tentative territories, and adjusting for differences in coverage difficulty. Sales managers must also consider salesperson ability and fit when assigning individuals to territories. Effective territory management includes planning efficient routes, scheduling time, and using tools to aid time management.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    At a glance
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    The key takeaways are that sales territories refer to the areas or regions that salespeople are responsible for covering. When allocating territories, factors like workload distribution, compensation opportunities, account mix, and travel time should be considered to ensure fairness.

    When planning sales territories, factors like equal workload distribution, equal compensation opportunities, a good mix of existing and new accounts, and allowing for easy travel time management should be considered to ensure territories are allocated fairly.

    The steps involved in setting up sales territories are selecting a basic geographical control unit, determining the sales potential of each unit, combining control units into tentative territories of similar potential, and adjusting for differences in coverage difficulty to account for varying workloads.

    Sales territory design &

    management
    Sales Territory/ Territory coverage

    • Territory refers to a land or a region.


    • With respect to sales management, it refers to the area or region for
    which a particular sales person or agent is responsible
    • Territories provide for organized and systematic market coverage
    because the responsibility of the sales person for each customer is
    clearly assigned.
    • The territory allocation tasks have a lot of bearing on the efficiency
    of the Sales Department.
    Factors To Consider When Planning Sales
    Territories

    • When segmenting territories among your reps, you want to


    make sure they’re allocated fairly. To ensure this, ask yourself
    the following questions:
    • Is the workload equally divvied up between each member of the
    team?
    • Does the territory design provide equal compensation
    opportunities?
    • Is there a good mix of existing and new accounts per territory?
    • Does the territory route allow easy travel time management?
    Procedure for setting up sales
    territories

    • 1. Selecting a basic geographical control unit.


    Commonly used units are postal code numbers, areas, towns or cities.

    Sales territories are put together as consolidations of basic


    geographical Control units.
    Procedure for setting up sales
    territories

    . Determining the sales potential present in each unit .


    2

    Sales potential : Maximum possible sales


    opportunities open to a specific company selling a
    good or service during a stated future period to
    particular market segment.

    Identify the present and prospective buyers


    precisely in a unit and ascertain the unit’s total
    market potential that the company has an
    opportunity to obtain i.e. Sales Potential.
    Procedure for setting up sales
    territories

    • 3. Combining control units into tentative territories.


    Assumption : No significant differences exist in the physical
    and other characteristics of the control
    units.
    Contiguous control units are combined into tentative territories
    having approx. same sales potential.

    Planner decides the number of territories.


    Procedure for setting up sales
    territories

    • 4. Adjusting for differences in coverage difficulty.

    Removal of unrealistic assumption that no differences in the


    characteristics of geographical control units exist.
    Certain large cities, for instance, have greater sales
    potential than some states but time required to contact the customers
    in city is less as compared to the state.
    Procedure for setting up territories

    • 4. Adjusting for differences in coverage difficulty.

    • Differences in coverage difficulty represent


    differences in work loads.
    • When final adjustments for coverage
    difficulties are made, sales territories have varying
    sales potential and different sized work loads, but
    none exceeds the maximum desirable work load
    depending upon the capacity of the sales person.
    Assigning Salespeople to Territories
    Sales Manager should consider two criteria:
    (A) Relative ability of salespeople
    • Based on key evaluation factors:
    (1) Product knowledge, (2) market knowledge, (3) past
    sales performance, (4) communication, (5) selling skills
    (B) Salesperson’s Effectiveness in a Territory
    • Decided by comparing social, cultural, and physical
    characteristics of the salesperson with those of the
    territory
    • Objective is to match salesperson to the territory
    Territory
    management

    • It means: How salesperson should cover the assigned


    sales territory
    • It includes three tasks for a sales manager:
    • Planning efficient routes for salespeople
    • Scheduling salespeople’s time
    • Using time-management tools
    Routing

    • Routing is a travel plan used by a salesperson for making


    customer calls in a territory
    • Benefits of or Reasons for routing:
    • Reduction in travel time and cost
    • Improvement in territory coverage
    • Importance of routing depends on the application:
    • Nature of the product – Important for FMCG
    • Type of jobs of salespeople – Important for driver-cum-
    salesperson job, but creative selling job needs a flexible
    route plan
    Procedure for Setting up a Routing Plan
    • Identify current and prospective customers on a territory map
    • Classify each customer into high, medium, or low sales
    potential
    • Decide call frequency for each class of customers
    • Build route plan around locations of high potential customers
    • Commonly used routing patterns are:

    Base C1
    (B)
    B
    B
    C5 C4 C3 C2

    Straight line / Hopscotch Clover Leaf


    Circular

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