Sales Territory

• A sales territory is a group of customers and prospects

assigned to an individual salesperson
 Reasons for Establishment of Sales
Territories
• To obtain thorough coverage of the market.
• To establish a salesperson’s responsibility.
• To evaluate performance.
• To improve customer relations.
• To reduce sales expense.
• To allow better matching of salesperson to
customer.
• To benefit salespeople and the company.
FACTORS TO CONSIDER WHEN DESIGNING
TERRITORIES
DETERMINE DETERMINE
SELECT BASIC SALES BASIC
CONTROL UNIT POTENTIAL IN TERRITORIES
EACH UNIT

EVALUATE, REVISE CUSTOMER ASSIGN TO

IF NEEDED CONTACT PLAN TERRITORIES
 Selecting a Basic Geographical Control Unit:
• Starting point in establishment of territories
• Cities/District/States as the basis
• Trading Areas as the basis
• A trading area consist of the geographical
region surrounding a city that serves as the
dominant retail or whole sale center or both
• Vary from product to product
 Determining Sales Potential present in each control
unit:
• Identification of the buyers as precisely as possible
• Present & potential buyers indicate Market Potential
• Determination of Sales Potential i.e. unit’s market
potential that the company has an opportunity to
obtain
• Market potential is converted to sales potential by
analyzing the historical market share , adjusting for
changes in company & competitor selling strategies
 SIX STEPS TO CONSIDER WHEN DETERMINING A
FIRM’S BASIC TERRITORIES

1. Forecast sales and determine 4. Tentatively establish

sales potentials.
2. Determine the sales volume
needed for each territory.
3. Determine the number of
territories.
territories.
5. Determine the number of
accounts for each territory.
6. Finalize the territories, and
draw the boundary lines.
 ASSIGN TO TERRITORIES

Some salespeople can handle large territories and the

travel associated with them; some can’t. Some
territories require experienced salespeople; some are
best for new people. Some people want to live in
metropolitan areas; others prefer territories with smaller
cities.
 CUSTOMER CONTACT PLAN

The customer contact plan involves scheduling

sales calls and routing a salesperson’s movement
around the territory.
Scheduling refers to establishing a fixed time when
the salesperson will be at a customer’s place of
business.

In theory, strict formal route designs enable the salesperson

to:
1. Improve territorial coverage.
2. Minimize wasted time.
3. Establish communication between management
and the sales force in terms of the location and
activities of individual salespeople.
 THREE BASIC ROUTING PATTERNS

Straight-Line Pattern
First Call
Base c
c c c c Work Back

Cloverleaf Pattern c Major-City Pattern

c c

c c 2 3
c c c c

c Base c
1
c c c c
c c c c
5 4

c c
c
Each Leaf Out and
Back Same Day 1 - Downtown
Using the Telephone for Territorial Coverage
1. Sales generating
• Selling regular orders to smaller accounts.
• Selling specials, such as offering price
discounts on an individual product.
• Developing leads and qualifying prospects.
2. Order processing
• Ordering through the warehouse.
• Gathering credit information.
• Checking if shipments have been made.
3. Customer service
• Handling complaints.
• Answering questions.
 EVALUATION AND REVISION OF SALES TERRITORIES

Determine, number, location & size of customers & prospects in

each tentative territory
Estimate time required for each sales call
Determine length of time b/w calls
Decide call frequencies
Calculate number of calls possible within a given period
Adjust the number of calls possible during a given period by
desired call frequencies for different classes of customers &
prospects
Check out the adjusted territories with sales personnel