Sales Territory Management

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Territory Management

TERRITORY:

TERRITORY A territory geographically defined area assigned to a sales person present customers potential customers

SALES FORCE PRODUCTIVITY:

SALES FORCE PRODUCTIVITY A crisis-- In the last ten years, selling costs have risen almost twice as fast as average sales volume per salesperson

HOW SALESPEOPLE SPEND THEIR TIME:

HOW SALESPEOPLE SPEND THEIR TIME Face-to-Face Selling = 30% Telephone Selling = 21% Waiting / Travelling = 20% Administrative Duties = 17% Service Activities = 12%

SALES FORCE PRODUCTIVITY:

SALES FORCE PRODUCTIVITY How can we improve productivity? Focus on high volume accounts Focus on selling time

MINIMUM ACCOUNT SIZE:

MINIMUM ACCOUNT SIZE Don’t pursue accounts that are unprofitable!!

COST PER CALL:

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

COST PER CALL:

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

BREAK EVEN SALES VOLUME:

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

BREAK EVEN SALES VOLUME:

BREAK EVEN SALES VOLUME Cost Per call X # of Calls to Close Sales costs as a % of Sales

BREAK EVEN SALES VOLUME:

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 = $133.30 x 3.9 / .12 = $4,332.25

TERRITORY IMPLICATIONS:

TERRITORY IMPLICATIONS Perform a customer by customer analysis! Assess selling strategy

ALLOCATION OF SELLING EFFORT:

ALLOCATION OF SELLING EFFORT Consider the time we spend with customers! Single Factor Models Portfolio Models Decision Models

SINGLE FACTOR MODELS:

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

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