Time and Territory Management Chapter 7 Time and Territory Management PowerPoint presentation prepared by Dr. Rajiv Mehta New Jersey Institute of Technology

Chapter Outline Improving Sales Productivity Establishing Sales Territories Setting Up Sales Territories Revising Sales Territories Self-Management Time Management and Routing Source: Flying Colours Ltd.

Learning Objectives After reading this chapter, you should be able to do the following: 1. Describe the basic reasons for establishing sales territories. 2. Apply procedures for setting up sales territories. 3. Evaluate when and why to revise sales territories. 4. Apply the concepts of self-management to sales and sales management. 5. Use the techniques of scheduling and routing for sales success.

Improve Sales Productivity by Establishing Sales Territories A sales territory is usually a specific geographic area that contains present and potential customers and is assigned to a particular salesperson. Time and territory management strategies help determine these things: which accounts are called on when accounts are called on how often accounts are called on Time and territory management strategies help improve productivity.

Reasons for Sales Territories

Procedure for Setting Up Sales Territories

Selecting a Geographic Control Unit Control units should be as small as possible, for two reasons: (1) pinpoint the geographic location of sales potential (2) make adjusting territories much easier

Conducting an Account Analysis Conducting an account analysis helps identify customers and prospects and determine the sales potential of each account. To identify accounts by name, Yellow Pages (www.yellowpages.com), which contains a database of over six million U.S. businesses, can be used.

Developing a Salesperson Workload Analysis A salesperson workload analysis is an estimate of the following: number of accounts to be called on frequency of the calls length of each call travel time needed non-selling time required The workload analysis can help develop the following: a sales call pattern for each territory a sales call strategy—see account analysis (next slide) Source: Digital Vision

Account Analysis Strength of Position Account Opportunity Strong Weak Attractiveness: Accounts are very attractive, offer high opportunity, and sales organization has strong position. Accounts are potentially attractive based on high opportunity, but sales organization has weak position. Accounts are somewhat attractive since sales organization has strong position, but future opportunity is limited. Accounts are very unattractive since they offer low opportunity and sales organization has weak position. High Sales call strategy? Sales call strategy? Account Opportunity Low Sales call strategy? Sales call strategy?

Account Analysis Strength of Position Account Opportunity Strong Weak Attractiveness: Accounts are very attractive, offer high opportunity, and sales organization has strong position. Accounts are potentially attractive based on high opportunity, but sales organization has weak position. Accounts are somewhat attractive since sales organization has strong position, but future opportunity is limited. Accounts are very unattractive since they offer low opportunity and sales organization has weak position. High Sales call strategy? frequent sales calls to strengthen position Sales call strategy? frequent sales calls Account Opportunity Low Sales call strategy? minimal sales calls and migrate personal sales calls to telephone or Internet Sales call strategy? moderate frequency to maintain current position

Combining Geographic Control Units into Sales Territories After setting up sales territories either by state, county, or metropolitan statistical area (MSA), identify territories that have a higher sales potential than others. z

Assigning Salespeople to Territories In assigning sales personnel to territories, managers should rank them using these criteria: relative ability product and industry knowledge energy level persuasiveness verbal ability Before assigning salespeople to a territory look for congruity in terms of the following: the salesperson’s physical, social, and cultural characteristics

Signs Indicating the Need for Territorial Revisions As a company grows, it needs a larger sales force. If territorial sales potential is inaccurate, sales performance may be misleading. Morale problems will emerge if there are wide variations in territory potential. Salesperson jumping necessitates territory revisions: often leads to higher costs selling inefficiencies low morale in the sales force

Self-Management: How Salespeople Spend Their Time

Account Analysis Ed: Insert jpg file of table 7.1.

How Salespeople Spend Their Time Ed: Insert jpg file of table 7.2.

Dollar Cost of an Hour of a Salesperson’s Selling Time Ed: Insert jpg file of table 7.3.

Self-Management: Achieving Effectiveness and Efficiency Effectiveness. Salesperson is results oriented and focuses on achieving sales goals. Efficiency. Salesperson is cost oriented and focuses on making the best possible use of the salesperson’s time and efforts. Together, the two equal selling success: S1 (Selling Success) = E1 (Effectiveness) + E2 (Efficiency)

Sales Effectiveness To see a video on the impact of CRM technology on sales effectiveness and productivity, visit http://www.sellingpower.com/video/index.asp?date=12/5/2006

Self-Management: Measuring Return on Time Invested Return on time invested (ROTI) is a financial concept that helps salespeople spend their time more profitably with prospects and customers. ROTI = designated return/hours spent

Self-Management: Setting Priorities Top-performing salespeople always set priorities in their work, based on the following: Parkinson’s Law: Work tends to expand to fill the time allotted for its completion. Concentration Principle: Often called the “80-20 rule,” it states that most of a salesperson’s sales, costs, and profits come from a relatively small proportion of customers and products.

Ranking Customers According to the Concentration Principle

Examples of the 80-20 Principle 20 percent of customers 20 percent of time 20 percent of products 20 percent of sales force 80 percent of sales 80 percent of selling 80 percent of profits 80 percent of revenues

Time Allocation Problems Here are some examples of salesperson time allocation problems: deciding which accounts to call on dividing time between selling and paperwork allocating time between present customers, prospective customers, and service calls allocating time to spend with demanding customers or new prospects

Managing Salesperson Time To maximize their productive time, salespeople can take these steps: Avoid time traps. Allocate time. Set weekly and daily goals. Manage time during sales calls. Evaluate (monitor) time usage over time.

Newly Appointed Sales Manager Coaching Salespeople to Effectively Manage Time To see a video on how sales managers can coach salespersons to manage time, go to http://www.sellingpower.com/video/index.asp?date=5/29/2007

Common Time Traps Salesperson calls on unqualified or unprofitable prospects. Salesperson fails to prioritize work. Salesperson insufficiently plans each day’s activities. Salesperson procrastinates on major projects, resulting in redundant preparation and paperwork. Salesperson makes poor territorial routing and travel plans. Salesperson inefficiently handles paperwork and keeps disorganized records. Salesperson takes long lunch hours and too many coffee breaks. Salesperson fails to break up huge, long-range projects into small, currently manageable tasks. Salesperson makes poor use of waiting time between appointments. Salesperson ends workdays early, especially on Friday afternoons. Salesperson spends too much time entertaining prospects and customers. Salesperson fails to insulate self from interruptions or sales calls or while doing paperwork. Salesperson does not use modern telecommunications equipment like a cell phone, pager, facsimile, and laptop computer. Salesperson conducts unnecessary meetings, visits, and phone calls. Salesperson does tasks that could be delegated to a staff person or to automated equipment. Salesperson neglects customer service until a small problem becomes a large one that takes more time to resolve.

Routing Patterns Territorial routing is devising a travel plan or pattern to use when making sales calls to efficiently cover a territory. A properly designed routing system has three primary advantages: reduced travel time and selling costs improved territory coverage improved communication (since managers know where salespeople are)

Routing Patterns Before developing a routing plan, the salesperson must determine the following: the number of calls to be made each day the call frequency on each class of customer the distance to each account the method of transportation

Routing Patterns

Routing Patterns Here are some types of routing patterns: Straight-line route Salesperson starts at the office and makes calls in one direction until reaching the end of the territory. Circular patterns Salesperson starts at the office and moves in a circle of stops until ending up back at the office.

Routing Patterns Cloverleaf route A cloverleaf route is similar to a circular pattern. But rather than covering an entire territory, the route circles only part of a territory. The next trip is an adjacent circle and the pattern continues until the entire territory is covered. Reprinted from PERSONAL SELLING, 2nd Edition, by Anderson/Dubinsky/Mehta © 2007 by Houghton Mifflin Company.

Routing Patterns Hopscotch pattern The salesperson starts at the farthest point from the office and hops back and forth calling on accounts on either side of a straight line back to the office. Reprinted from PERSONAL SELLING, 2nd Edition, by Anderson/Dubinsky/Mehta © 2007 by Houghton Mifflin Company.

Routing Patterns Outer-ring approach The salesperson first draws an outer ring around the customers to be called upon. Then, those customers inside the ring are connected to the outer-ring route using angles that are as obtuse as possible. Reprinted from PERSONAL SELLING, 2nd Edition, by Anderson/Dubinsky/Mehta © 2007 by Houghton Mifflin Company.

Using Computer Programs in Routing Numerous computer-based interactive models have been successfully applied to sales force routing and territory management.

Using Computer Programs in Routing To learn about optimization software programs that assist in designing sales territory routing paths, go to www.alignstar.com www.terralign.com/terralign4.htm www.hallogram.com/mappro/businessmap.html www.prior-analytics.com/solutions/sagecrm/sagecrm.html To learn about enhancing territory management skills, see www.crmondemand.com/training_support/training_webseminars.jsp Au: The fourth link on this page doesn’t work.

Ethical Situation: What Would You Do? Discussion Question As the district sales manager for your company, you decide which salespeople to assign to which territories. Among your territories are two which have very low sales potential according to Sales & Marketing Management magazine’s latest annual estimates. You are thinking about assigning your two lowest performing salespeople to these two territories because you think this extra challenge will either motivate them or cause them to quit which would be okay since it would allow you to avoid the unpleasant task of possibly firing them later anyway. No matter what the outcome, it seems like a win-win from your perspective.