Chapter 9.
Time and Territory Management

• Building Relationships – Changing Roles of Salespeople
  The relationship between salespeople and their customers is changing rapidly Salespeople must adopt a different role
  Buyers are looking for sales people to wear three hats:	Long-term partner Business consultant Strategic orchestrator
  Information technologies can improve a company’s sales management process Customers expect (demand) tech support and service 24/7
  Example: General Electric’s "quick market intelligence"
  Sales and manufacturing meet to review problems and opportunities Improved market intelligence Expedited decision making
  Technology changes the customer "face-to-face" contact Sellers may be able to work remotely More preparation needed More knowledge of customer, company and product is required

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• Introduction
  Three trends are changing the management of time and territories
  Concentration of buying decisions into national/regional headquarters	Decisions being made outside the territory May have to look at the total company instead of just one unit
  Buying committees	Purchasing agent or local store manager is not the decision maker Salespeople may not get to see the committees Buying influences outside the committee
  Inflation (or lack thereof)	Prices are relatively stable Slows decisions Three calls to close an existing account Seven calls to close a new account
  Key Accounts
  20% of customers may be 80% of sales Changes in purchasing practices Just in time inventory Computerized buying preferred vendor relationships National Account Management Team of service and salespeople Interact with all of the buyer's departments Headed by a senior salesperson Don't ignore the small customer Cut selling costs Greater use of telephone and mail
  Resource Management
  Allocating salespeople's time and effort to key accounts Designing and packaging products that more specifically fit needs. Logistic systems Other support systems
  Time and Territory Management
  If a sales person could increase face-to-face selling from 33% to 41% then a 25% sales increase could be realized Benefits of efficient territory management Efficient coverage: Sales closer to potential Optimum time is spent with each class of customer Sales costs are reduced Most significant customer gets the best service Territories create benchmarks for performance evaluation Improved morale Work smarter not harder to increase output and control your time.
  Objectives
  Time and Territory management begins with the company's objectives Regardless of how the sales force is organized The size of the sales force is influenced by The role of personal selling in the marketing mix The sales department's budget The sales forecast
  Common themes recurring among sales managers about TTM
  TTM decisions are often left to the field salesperson Sales manager's role in TTM is often that of a "monitor" Checks on key accounts Bottom line results Computers are invaluable tools for monitoring TTM can still become more efficient Book on the subject
  Basic Territory Design Procedure
  Territory Analysis Unit sales potential New customer potential Customer Analysis Determine the number of salespeople needed Design territories, including the actual sales routes

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• Designing new territories
  Factors to consider
  Territory should have the potential for a salesperson to make a good living Salesperson should be able to work the territory efficiently and economically Territory should have a few ongoing accounts not just all new potential buyers Territory should allow a decent standard of living for the salesperson Should be designed to minimize overnight travel Transportation facilities that allow Access for supervisors Access for efficient delivery of merchandise. Territory should yield an adequate return for the company Territories should be approximately balanced for income among salespeople
  Territory analysis
  Grass roots method For redesigning older territories Salespeople participate Building block method For all new territories Building blocks are Geographic units With a corresponding market index Combine units to make a territory Mapping Software
  Customer analysis
  Count customers in territory Some customers are more profitable Obtain names from a directory Estimate sales for each customer Look for the most profitable customers Regional sales manager creates the "A" group by: A minimum sales volume for consideration An ideal sales call pattern for the "A" group. (How often the salesperson calls on this customer Create additional groups and sales call patterns Determine the marginal value of an additional call. Make the call if: The cost of making the call is less than the revenue derived The time can't earn more revenue with another customer
  Expected Value Analysis
  Firm	Purchases		Probability		Expected Value		Class
  A	$500,000		50%		$250,000		A
  B	$250,000		10%		$25,000		B
  C	$200,000		75%		$150,000		A
  D	$50,000		15%		$7,500		C
  Salesperson work load analysis
  Step1: Determine Number of Sales Days per Year
  Total Days						365
  Less		Holidays		10
  		Saturdays		52
  		Sundays		52
  		Vacation		10
  Total work days						241
  Less		Sales meetings, ETC		15
  		Sick Leave		5
  Total Selling Days						221
  Step:2 Determine Travel Time Number of calls Cost per call (Assume $60,000 cost per salesperson)
  Miles Year Miles Hr Hrs Lost Hrs Day Days lost Total Days Net Days Time Call Number Calls Possible Cost Call 10,000 40 250 9 28 221 193 2 hr 868 $69 20,000 40 500 9 56 221 165 2 hr 742 $81 30,000 40 750 9 83 221 138 2 hr 621 $96 40,000 40 1,000 9 111 221 110 2 hr 495 $121
  Return on Time Invested(ROTI) = gross margin/cost of time invested
  Determine Number of Calls Needed
  Group Customers Calls Year Total Calls Salespeople Needed at different call levels 868 742 621 495 A 50 12 600         B 200 4 800 C 1000 1 1000 Total 2400 3 4 4 5
  Route analysis - Some Tips
  Start with a detailed map Mark customers (color coded by class) Look for natural clusters Trace out routes measure manually or with computer Try to get the salesperson to start and finish near home Schedule salespeople so that they are always close to at least one major account Schedule as few nights away from home as possible

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• Example: Consumer product
  Year 1998 Product: Videotape deck Territory: eight western states Unit Sales Goal:50,000 Dollar Sales Goal: 25,000,000
  Territory analysis
  Buying Power Index	Component	Weight
  	Net Effective Buying Income	5
  	Retail Sales	3
  	Population	2
  Customer analysis
  Salesperson work load analysis
  Size of sales force
  Route analysis

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• Example: Industrial product

  Standard Industrial Classification (SIC) (AKA NAIC)

  Link To SIC DATA Actual list of codes at the Departmnt of Census A valuable tool for business marketers in analyzing, segmenting, and targeting markets. A detailed, U.S. government numbering system to classify business and government organizations by economic activity. Industries and sub-industries are identified by numeric codes. Information about businesses is gathered by the federal government and categorized by SIC code. Survey of buying power gives indexes by SIC

  Text Example 2 Digit Major Industry Group 20-26 Printing & Publishing 3 Digit General Product Type 271-276 Books 4 Digit Product Group 2731-2736 Book Publishing 5 Digit Specific Product Type 27310-27313 Textbooks 6-7 Digit Actual Product 27311-13 College Textbooks

  Territory analysis

  Customer analysis

  Salesperson work load analysis

  Size of sales force and route analysis

  Route analysis

  Automation Seibel Upshot

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• Summary

  The key to reaching the sales potential of any given territory is management Work smarter, not harder