1. CHAPTER FIVE
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 = $ 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

15. SINGLE FACTOR MODEL

16. PORTFOLIO MODELS
Accounts are classified into categories of similar attractiveness for receiving sales call investment.
Selling effort is allocated so that the more attractive accounts receive more selling effort.

17. ACCOUNT ATTRACTIVENESS
Account Opportunity
The account’s need for and ability to purchase the product
High / Low
Competitive Position
The strength of the relationship between the firm and the account
Strong / Weak

18. PORTFOLIO MODEL SEGMENTS
Strong Competitive Position/High Account Opportunity
“Core Accounts”
Accounts are very attractive due to strong competitive position
Accounts should receive a heavy investment of selling effort to maintain/improve competitive position

19. PORTFOLIO MODEL SEGMENTS
Weak Competitive Position/High Account Opportunity
“Growth Accounts”
Accounts are potentially attractive due to high opportunity
Additional analysis required to identify accounts where competitive position can be improved. Target these accounts

20. PORTFOLIO MODEL SEGMENTS
Strong Competitive Position/Low Account Opportunity
“Drag Accounts”
Accounts moderately attractive; future opportunities are limited
Accounts should receive an effort sufficient to maintain current position

21. PORTFOLIO MODEL SEGMENTS
Weak Competitive Position/Low Account Opportunity
“Problem Accounts”
Accounts very unattractive
Accounts should receive a minimal of selling effort. Less costly forms of marketing might be considered (telemarketing, direct mail) and/or the elimination of account coverage

22. PORTFOLIO MODEL EXAMPLE

23. DECISION MODELS Examine accounts on an individual basis
Allocate sales calls to accounts that promise the highest sales returns
The objective is to achieve the highest level of sales and to increase sales calls until marginal costs equal marginal returns

24. DECISION MODEL EXAMPLE

25. MANAGING TERRITORY PROFITABILITY
Allocation of Effort
Mix of Products Sold
Price Concessions

26. ROUTE MANAGEMENT Route should be circular
Route should never cross itself
Don’t use same route to go to and from a client
Customers in neighboring areas should be visited in sequence

27. TIME MANAGEMENT Telephone interruptions Drop in visitors Crises
Meetings
Lack of objectives
Indecision/procrastination
Poor communications

28. TIME MANAGEMENT Get control of your time! Set goals and objectives
Set priorities
Develop a daily “to do” list
Focus on the most important tasks

29. MANAGEMENT’S ROLE Close Supervision Hands-off Management
Management Recommendations

30. FROM THE INTERNET The granddaddy of time management sites:

31. FROM THE INTERNET
See what a consultant says about improving sales force productivity at:

32. FROM YOUR TEXT Read everything in chapter five except
pages 238 to 240 (Sales Funnel Method)
pages 242 to 245 (Largest Angle Method)