Chapter 13 Managing Your Time and Your Territory

Chapter Outline Self-management Effectiveness and efficiency Activities sales of salespeople Setting priorities Account and territory management Working smarter Copyright © Houghton Mifflin Company. All rights reserved.

Learning Objectives After reading this chapter, you should understand: Why salespeople must be concerned about efficiency as well as effectiveness in allocating their time. How salespeople function as field marketing managers. How to use ROTI (return on time invested) to manage the territory. Methods for using time wisely. Efficient routing strategies for sales calls. Ways to prioritize accounts. How to avoid falling into time traps. Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Self-Management Self-management is probably more difficult than management by someone else where feedback from various sources can keep you on track and motivated Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Effectiveness and Efficiency Effectiveness is results-oriented and focuses on achieving goals, while efficiency is cost-oriented and focuses on making the best possible use of the salesperson's time and efforts Together, the two equal success: E1 (Effectiveness) + E2 (Efficiency) = S1 (Sales Success) Chapter Review Question: Define and distinguish between the terms effectiveness and efficiency. Copyright © Houghton Mifflin Company. All rights reserved.

How Salespeople Spend Their Time A recent study of 10,000 sales reps shows that: 33% of their time is spent in face-to-face selling 20% in travel 16% in phone selling 16% in account service and coordination 10% in administration 5% at internal company meetings © Royalty-Free/CORBIS Chapter Review Question: How do salespeople actually spend their time? CBU032 Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.1 How Salespeople Spend Their Time Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.1 What is One Hour of Selling Time Worth? Copyright © Houghton Mifflin Company. All rights reserved.

Effectiveness and Efficiency Successful salespeople tend to possess the following characteristics: Possess excellent product knowledge knowledge of competitors face-to-face selling skills 2. Exercise the influence skills needed to work with both internal staff and customers Recognize that the skills required to service an account are different from those required to make a sale Copyright © Houghton Mifflin Company. All rights reserved.

Chapter Review Question: What are the basic activities of salespeople? Sales Activities Basic sales activities include: the selling process working with orders servicing the product managing information servicing the account conferences/meetings training/recruiting entertaining customers out-of-town traveling working with distributors Royalty-Free, Digital Vision/Getty Images Chapter Review Question: What are the basic activities of salespeople? Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.2 Basic Activities of Sales People Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.2 Basic Activities of Sales People cont’d Chapter Review Question: Identify the major management and marketing activities of salespeople. Copyright © Houghton Mifflin Company. All rights reserved.

What's Your Job Description? Each salesperson needs to know exactly what performance is expected in his or her specific job assignment In addition, the salesperson needs to know what is expected to be achieved during a given time period Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.2 Position Description Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.2 Position Description cont’d Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.2: Position Description cont’d Chapter Review Question: Why is a job description important to a salesperson? Copyright © Houghton Mifflin Company. All rights reserved.

Salespeople as Field Marketing Managers For many companies, the modern professional selling job has evolved into that of field marketing manager for a sales territory. Today's salespeople have more responsibilities than ever before. They are their own bosses in their sales territories, working with groups of people over whom they have little control and often impose conflicting demands and expectations on them. Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.3 The Salesperson’s Management and Marketing Activities Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.3 The Salesperson’s Management and Marketing Activities Copyright © Houghton Mifflin Company. All rights reserved.

Return on Time Invested (ROTI) Although ROTI sounds like tedious record keeping, it only takes a few minutes a day ROTI calculations can help salespeople manage their time more effectively and efficiently Chapter Review Question: Describe the concept of return on time invested (ROTI). Copyright © Houghton Mifflin Company. All rights reserved.

Three Axioms in Personal Selling cont’d In their work, salespeople recognize the truth of the 3 axioms: Parkinson's Law Work tends to expand to fill the time allotted for its completion. Concentration Principle ("80-20" rule) 805 of the sales and profits come from 20% of customers. Iceberg Principle Analogous to an iceberg, which shows only 10% of its mass above the water, many sales problems can remain hidden beneath the surface of overall positive sales totals. Copyright © Houghton Mifflin Company. All rights reserved.

Performance Measures Instead of reliance on one performance measure such as sales volume, a balance of several quantitative and qualitative standards is better because performance in one area can conflict with performance in another. For example, a salesperson who stresses keeping sales and service expenses low may find revenues adversely affected. Copyright © Houghton Mifflin Company. All rights reserved.

Performance Measures cont’d Quantitative measures Like dollar or unit sales volume or net profit, affect sales or expenses directly, and can usually be measured objectively. Qualitative measures Like the salesperson's product knowledge, customer relationships, or ethical behavior, have a more indirect and longer-run impact on sales and expenses, and thus must be evaluated on a more subjective basis. From the standpoint of customers, qualitative measures are more important than quantitative. Copyright © Houghton Mifflin Company. All rights reserved.

Performance Measures: Quotas cont’d Derived from sales forecasts, sales quotas are performance objectives and motivation incentives for salespeople. The four types of quotas for salespeople are: Sales volume Financial Activity Combination Copyright © Houghton Mifflin Company. All rights reserved.

Performance Measures: Customer Reviews of Performance Obtaining feedback from customers is one of the most effective ways to keep from losing touch with customers Salespeople should ask for an annual evaluation of their performance by customers and participate in this review process at a special meeting Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.4 Quantitative Measures of Salesperson Performance Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.4 Quantitative Measures of Salesperson Performance cont’d Chapter Review Question: Name at least five quantitative and five qualitative measures of salesperson performance. Copyright © Houghton Mifflin Company. All rights reserved.

Account and Territory Management A sales territory is a control unit that contains customer accounts. Once the geographical control unit has been established, the next step is to analyze the customers and prospects in the territory on the basis of their sales potential. Increasing numbers of companies are using computer programs to assist their salespeople in account analysis, planning, and control. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.3: Ranking Customers According to the Concentration Principle Copyright © Houghton Mifflin Company. All rights reserved.

Portfolio Analysis Approach A portfolio analysis approach provides an alternative to the analytical rigor of the mathematical models. In this approach, the sales call strategy is based on the account’s attractiveness. Account attractiveness depends on two dimensions: 1. Account Opportunity 2. Strength of Position Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.4 Account Analysis Copyright © Houghton Mifflin Company. All rights reserved.

Territorial Routing Territorial routing is devising a plan or pattern to use when making sales calls. Before developing a routing plan, the salesperson must determine: 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 © Royalty-Free/CORBIS Copyright © Houghton Mifflin Company. All rights reserved.

Routing Patterns cont’d Types of routing patterns include: Straight-line route salesperson starts at the office and makes calls in one direction until he or she reaches the end of the territory Royalty-Free, Digital Vision/Getty Images Circular patterns salesperson starts at the office and moves in a circle of stops until ending up back at the office Copyright © Houghton Mifflin Company. All rights reserved.

Account and Territory Management Cloverleaf route similar to a circular pattern 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 Copyright © Houghton Mifflin Company. All rights reserved.

Account and Territory Management cont’d 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 The "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 Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.5 Hopscotch and Cloverleaf Routing Patterns Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.6 “Outer Ring” Routing Patterns Copyright © Houghton Mifflin Company. All rights reserved.

Using Computer Programs in Routing Numerous computer-based interactive models have been successfully applied to sales force routing and territory management. © Royalty-Free/CORBIS Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Using the Latest Technology Salespeople can work smarter and increase their selling effectiveness and efficiency by making use of the latest technologies, such as: electronic pagers cellular car phones electronic mail facsimile machines word processing and spreadsheet software time management software laptop computers Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Excuses About Time Often the problem is the individual's attitude toward time and the tendency to make excuses for using it inefficiently Excuses about time include: There are too many demands on my time. I can do it better myself. If only I had more time each day. I don't have time to plan. I can't find time to work on big projects. Royalty-Free, Digital Vision/Getty Images I can't prevent unexpected problems that disrupt my plans. If only I could work faster. It's better to do small tasks first. Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.5 Excuses for Poor Time Management Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.5 Excuses for Poor Time Management cont’d Copyright © Houghton Mifflin Company. All rights reserved.

Table 13.5 Excuses for Poor Time Management cont’d Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Paperwork One of the most dreaded and time-consuming tasks of salespeople is handling their paperwork. Like other sales-related activities, paperwork ought to be scheduled on the salesperson’s daily or weekly planning calendar. Some companies put the 200 to 700 pages of memos, newsletters, brochures, reports, announcements, and other sales-related materials sent to salespeople each week onto audiotapes. Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Customer Service Customer service is a regular part of the salesperson’s daily job and should be scheduled like any other activity. The suggestions on the following slides may assist you in focusing your customer service activities: © Royalty-Free/CORBIS Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Customer Service cont’d Segment your customers according to costs and the potential profits that could accrue from providing them with superior service. Remember that all customer contacts, whether through telephone operators, receptionists, secretaries, delivery and repair personnel, or customer service people, shape the perceptions of your company’s service. Try to encourage all these people with customer contact to treat prospects and customers well. Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Customer Service cont’d Continually stress the importance of customer service to people in your company, and reinforce this attitude by your own actions. Design and use measures of service effectiveness such as the percentage of on-time deliveries, the length of time it takes to repair a product, and the level of customer satisfaction. Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Time Traps Many salespeople hurt their efficiency by falling into daily time traps, which include: Calling on unqualified or unprofitable prospects Insufficiently planning each day's activities Making poor territorial routing and travel plans Making too many cold calls Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Time Traps cont’d Making poor use of waiting time between appointments Spending too much time entertaining prospects and customers Royalty-Free, Digital Vision/Getty Images Not using modern telecommunications equipment like a car phone, beeper, facsimile machine, and laptop computer Doing tasks that could be delegated to a staff person or to automated equipment Failing to prioritize work Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Time Traps cont’d Procrastinating on major projects or contacting high-potential prospects, resulting in redundant preparation and paperwork Inefficiently handling paperwork and keeping disorganized records Failing to break up huge, long-range goals into small, currently manageable tasks Ending workdays early, especially on Friday afternoons Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Time Traps cont’d Failing to insulate oneself from interruptions on sales calls or while doing paperwork Conducting unnecessary meetings, visits, and phone calls Doing personal business during working hours Royalty-Free, Digital Vision/Getty Images Chapter Review Question: What are the classic time traps into which salespeople can fall? Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: A Plan for Each Day Every salesperson can benefit from preparing a daily "To Do" list of projects and tasks that are prioritized into A, B, and C categories of importance Use the Swiss cheese approach to punch little holes in top priority projects that can't be finished all at once Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Working Smarter: Steps to Manage Time More Efficiently Time management steps include: Each weekday afternoon, write down the schedule for the next day On Friday afternoon, plan the schedule for the following week Concentrate on high priorities Spend time as if it were money Stop procrastinating Schedule some personal time every day Chapter Review Question: What are some steps that salespeople can take to manage their time better? Royalty-Free, Digital Vision/Getty Images Copyright © Houghton Mifflin Company. All rights reserved.

Figure 13.7: Daily Schedule Sheet Copyright © Houghton Mifflin Company. All rights reserved.

Key Terms Effectiveness Results-oriented focus on achieving selling goals. Efficiency Cost-oriented focus on making the best possible use of the salesperson’s time and efforts. Return On Time Invested (ROTI) The designated return achieved, calculated by dividing the result achieved by the amount of time spent to accomplish that result. Parkinson’s Law Work expands to fill the time allotted to it. Copyright © Houghton Mifflin Company. All rights reserved.

Key Terms cont’d Concentration Principle Most sales, costs, and profits come from a relatively small proportion of customers and products; also known as the 80-20 rule. Iceberg Principle Analogous to an iceberg, most sales problems are hidden beneath the surface of overall positive sales totals. Sales Territory A control unit that contains customer accounts. Territorial Routing Devising a travel plan or pattern to use when making sales calls. Copyright © Houghton Mifflin Company. All rights reserved.

Topics for Thought and Class Discussion 1. Why are salespeople described as operating like field marketing managers? Do you believe that this is an accurate representation of the typical field salesperson? Explain. 2. Do you think that most job descriptions for salespeople accurately reflect their current duties and responsibilities? Why? 3. Pick a routine task in your life and map out a plan for improving your efficiency and effectiveness in accomplishing it. 4. How do time traps disrupt your time management? How can you avoid these traps? Copyright © Houghton Mifflin Company. All rights reserved.

Topics for Thought and Class Discussion cont’d What techniques do you use to plan, organize, and set priorities in your daily activities? Do you use the “Swiss cheese” approach for large or complex projects? Give an example of how you might do this. Do you allow other people to frequently preempt your priorities in use of your time by substituting something that is of high priority to them? Give an example. How might you deal with future situations where someone wants you to accept his or her priority for time use instead of yours? Copyright © Houghton Mifflin Company. All rights reserved.

Internet Exercises Use an Internet search engine to find three firms that specialize in sales territory management training. What are the length and cost of each program? Where would it be held? Who’s doing the training? What topics will the sales territory management training cover that will be new? Using Google or any other search engine, find two examples of sales territory management training being demonstrated using Flash or streaming video. Use the Internet to find articles on salespeople whose effectiveness has been increased by their improved skills in time and sales territory management. Search the Internet to find additional tips for managing your time. What time management suggestions did you find advocated? Copyright © Houghton Mifflin Company. All rights reserved.

Internet Exercises cont’d Use the Internet to find examples of quantitative and qualitative metrics that are used to evaluate the performance of salespeople (in addition to those identified in Table 13.4). What inferences can you make about how your performance might be assessed if you were to embark on a career in sales? What activities might you emphasize to ensure a high performance rating and, in the process, a successful career? Using an Internet search engine, find software that can be used to chart efficient territorial routing patterns. What are some of the different types of territorial routing patterns that can be developed? Copyright © Houghton Mifflin Company. All rights reserved.

Projects for Personal Growth Contact three salespeople and ask them how they plan, organize, and prioritize their daily activities. Mention that you are a student working on a class project. Evaluate their approaches in terms of ROTI. 2. Classify four of your student friends on the basis of your perceptions of their effectiveness and efficiency. Then ask these student friends these two questions: (a) “What techniques do you use to plan, organize, and set priorities in your daily activities?” and (b) “What time traps are most responsible for wasting your time each day?” Compare your friends’ answers with your prior classification of them. Any surprises? Copyright © Houghton Mifflin Company. All rights reserved.

Projects for Personal Growth cont’d For the coming week, write down how you spend each hour of the seven days. At the end of the week, compute approximately how much of your time you used productively and how much you wasted. Draw up a plan for better managing your time, and use it throughout a second week. At the end of this second week, evaluate whether or not you obtained more productive time. If so, what made the difference? Go to the library or use electronic sources and find three current articles on managing a sales territory. Summarize them and report what you learned to your classmates. Copyright © Houghton Mifflin Company. All rights reserved.

Case 13.1: Time Is No Object How would you evaluate Steve Burbank as a manager of his time and territory? What would you recommend to help Steve improve his effectiveness and efficiency? How might Pearson’s training program have better prepared Steve for managing his territory? Copyright © Houghton Mifflin Company. All rights reserved.

Case 13.2: Working Smarter ... Or Just Harder? Do you think that Jim is working smarter or just harder? What do you think about Jim’s sales call allocation and routing plan for his accounts? Can you suggest any improvements? How well do you think Jim invests his time? What might he do differently? What advice would you give Jim about achieving his annual sales quota? What would you suggest to Jim to help him deal with the stress in his life? Case 13.2 is found online at http://college.hmco.com/pic/andersonps2e. Copyright © Houghton Mifflin Company. All rights reserved.