Lesson 1

Developing and Managing Sales TerritoriesLesson 11Objectives After completing this lesson you should be able to:

1. Define the two key elements in the definition of a sales territory.

2. Discuss when a sales territory needs to be developed.

3. Describe the six primary benefits of well designed sales territories.

4. Define the fundamental objective managers try to achieve when designing sales territories.

5. Illustrate the six step procedure for designing sales territories and describe the tasks associated required to implement each step.

6. Describe the main strengths and weaknesses of the build-up and breakdown methods for determining the size of sales territories.

7. Illustrate and describe the six steps involved in the build-up method of territorial design and the tasks required to implement each stage.

8. Illustrate and describe the 5 steps involved in the breakdown method of territorial design and the tasks required to implement each stage. (This does not apply to real estate agents and financial planners)Lesson Notes1. A sales territory includes current and potential customers, located within a geographical area.2. A territory is made up of people or companies, not places. 3. You should first think of a sales territory as a market with customers and, second as a geographical area.

4. How do sales people spend their time? Internal meetings - 5%

Travel - 20%

Face-to-face meetings - 33%

Service coordination - 16% Administration - 10%

Telephone meetings - 16%5. Benefits of Territory Design

Enhances customer coverage.

Reduces travel time and selling costs.

Provides more equitable financial rewards

Aids in sales force evaluation.

Increases sales.

Increase sales rep morale

Increase customer satisfactionBenefits of territory design

1. Ensure that the customers were properly serviced

2. Ensure the sales rep earned satisfactory income

6. Steps in developing a Sales Territory

Ideas

- think about how you can achieve them without going on the road as frequently

- Hire an assistant to the reps in the Northern territory

- Demo product via internet

- Set your customers up with a web cam

- Have the customers come to you Trade show

7. 8. 9. 10. 11. Breakdown Method

1. Determine company sales potential

2. Determine sales potential in each control unit

3. Determine sales volume expected from each sales person

4. Set tentative territorial boundary lines by combining control units until total sales potential = expected sales volume.

5. Modify tentative territories as needed

12. Problem with the Breakdown Method- we are not considering the class of the customer

- what is the cost of servicing those customers

- the sales rep still needs to make a living as well ________________________________________________________________13. Assign salespeople to territories

Territory size may be modified based on skill level and experience of sales reps.

New reps often start with a smaller territory because they havent developed efficient workload management procedures 14. Set up territorial coverage plans

Territorial coverage plans are a time management tool that outlines the most effective route and schedule for working a territory ________________________________________________________________.

15. Fixed Routes versus Non-fixed Routes1. Benefits of Fixed Routes

Customers can planyoure your visit

May facilitate better time management

May help new reps learn the territory

May be easier to get reps to call on small accounts 2. Disadvantages of Fixed Routes

Decreases flexibility

May not meet customer needs

May decrease sales rep morale

Difficult to use with reps who are being paid on 100% commission

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