Territory Development and

Time Management
• What is a territory?
1. Geography
2. Customer Groupings

• Problems in Territory Management:

1. Customer may move
2. Salesperson may move
• Variations in territory design:
1. Geographic setups (Strict geographic boundaries v/s no boundaries)
2. Mixed Systems (Key Accounts and Direct Accounts)
Sales Territory Design

Territory -> District -> Region -> Zone -> National

• Problems of poor territory design;

1. Inadequate coverage
2. Unequal workloads
3. Lack of control over salesforce
Reasons/ Benefits for Establishing Territories

To maximize SALES and PROFITS!!!

Reasons/ Benefits for Establishing Territories
Customer-related benefits: Managerial benefits:
• Intensive market coverage • Enhance control
• Excellent customer service
• Greater satisfaction
• Coordinate promotions
• Higher sales • Reduce expenses
• Give more “bang for the buck”
Salesperson-related benefits:
• Motivation and enthusiasm
• Performance evaluations
• Rewards related to efforts
• Less turnover
Reasons for Revising Sales Territories
• Inadequate information about sales potential
• Overestimation of sales potential
• Markets are dynamic and conditions may change
• Major accounts open or close down facilities
• Accounts may move into or out of the area
• Nature of the business may change
• Mergers, acquisitions, subsidiaries
• Intensified competition
• Customer-related changes???
Reasons for not Establishing Territories

• When a company is small

• When friendship sales are important
• When high technology selling is involved
Dealing with Territory Management
Problems
Problems Remedies
• Inadequate coverage • Eliminate Practice
• Inadequate size • Clarify at hiring
• Revision • Review cost figures
• Shifting Accounts • Rectify causal factors
• Direct Accounts • Minimize crossovers
• Inadequate support • Split territories
• Territory Jumping • Enlarge territories
• Overlapping Territories • Prepare salespeople
• Selling Cost Variations • Assist Salespersons
• High Turnover Ratio • Revise territories
Procedures for Developing Territories

• Objectives and criteria for territory formation:

1. Determining the optimum number of territories and their configuration
2. Equalization of territory potentials (What about unequal potentials?)
3. Adequate coverage
4. Workload of the salesperson
5. Product type
Procedures for Developing Territories

Basis of Territories Methods of Building Territories

• Geography • The Build-up Method
• Potential • The Breakdown Method
• Servicing requirements • The Incremental Method
• Workload
Routing & Scheduling

• The Straight Line Method

• The Clover Leaf Method
• The Hopscotch Method
Allotting the sales forecast
• Allocation based on the salesperson previous years sales
Previous year share % of the district *forecasted sales for the district

• Allocation based on sales person previous years sales plus increased sales
potential of the year
Sales person previous years sales + forecasted sales increase for district * sales potential %

• Allocation based on the combination of two: Weighted method

Weighted share of sales allotment (%)= share of district % last year* assigned weighting % + share of
sales potential % * assigned weighting
Sales total= weighted % of sales allotment* forecasted sales of the district
Example
• A salesperson had previous year’s sale of $ 1620, which represented
18% of the sales in the district and was responsible for a territory with
a sales potential of 12% of the district. Following the three ways of
allotting sales forecast, calculate the sales goal of a salesperson when
a corporate dictated $ 10,000 sales goal (increase of $1000) for the
upcoming year is put in place.