Chapter4 - CH - 07-Time and Territory Management

Chapter 7
Time and Territory

Management
PowerPoint presentation prepared by

Dr. Rajiv Mehta
New Jersey Institute of Technology
Chapter Outline
•  Improving Sales Productivity
•  Establishing Sales Territories
•  Setting Up Sales Territories
•  Revising Sales Territories Source: Flying Colours Ltd.
•  Self-Management
•  Time Management and Routing
Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7|2
Learning Objectives
After reading this chapter, you should be able to do
the following:
1. Describe the basic reasons for establishing sales
territories.
2. Apply procedures for setting up sales territories.
3. Evaluate when and why to revise sales territories.
4. Apply the concepts of self-management to sales and
sales management.
5. Use the techniques of scheduling and routing for sales
success.
Improve Sales Productivity
by Establishing Sales Territories
•  A sales territory is usually a
specific geographic area that
contains present and potential
customers and is assigned to a
particular salesperson.
•  Time and territory management

strategies help determine these
things:
–  which accounts are called on
–  when accounts are called on
–  how often accounts are called on
•  Time and territory management

strategies help improve productivity.
Reasons for Sales Territories
1.
Enhance market
coverage
6.
Coordinate selling with 2.
other marketing Minimize selling costs
functions
Reasons for
sales territories
3.
5.
Strengthen customer
Better evaluate sales
relations
4.
Build a more effective
sales force
Procedure for Setting
Up Sales Territories
1.
Select a geographic
control unit
5. 2.
Assign salespeople Conduct an
to territories account analysis
Procedure for setting
up sales territories
4. 3.
Combine geographic control Develop a salesperson
units into territories workload analysis
Selecting a Geographic Control Unit
1.
States
Selecting a 2.
4.
Trading areas geographic Counties and
control unit zip codes
3.
Cities and
metropolitan areas
Control units should be as small as possible, for two

reasons:
(1) pinpoint the geographic location of sales potential
(2) make adjusting territories much easier
Conducting an Account Analysis
•  Conducting an account analysis helps identify
customers and prospects and determine the
sales potential of each account.
•  To identify accounts by name, Yellow Pages

(www.yellowpages.com), which contains a
database of over six million U.S. businesses,
can be used.
Developing a Salesperson
Workload Analysis
•  A salesperson workload
analysis is an estimate of the
following:
–  number of accounts to be called on
–  frequency of the calls
–  length of each call
–  travel time needed
Source: Digital Vision
–  non-selling time required
•  The workload analysis can help

develop the following:
–  a sales call pattern for each territory
–  a sales call strategy—see account
analysis (next slide)
Account Analysis
Strength of Position
Strong Weak
Attractiveness: Attractiveness:
Accounts are very attractive, offer high Accounts are potentially attractive based
High
Account Opportunity
opportunity, and sales organization has on high opportunity, but sales organization
strong position. has weak position.
Sales call strategy? Sales call strategy?
Accounts are very unattractive since they
Low
Accounts are somewhat attractive since

offer low opportunity and sales
sales organization has strong position, but
future opportunity is limited. organization has weak position.
Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 10

Account Analysis
Strength of Position
Strong Weak
Accounts are very attractive, offer high Accounts are potentially attractive based
High
Account Opportunity
opportunity, and sales organization has on high opportunity, but sales organization
strong position. has weak position.

frequent sales calls to strengthen
frequent sales calls position
Accounts are very unattractive since they
Low
Accounts are somewhat attractive since

offer low opportunity and sales
sales organization has strong position, but
future opportunity is limited. organization has weak position.
Sales call strategy?

Sales call strategy? minimal sales calls and migrate
moderate frequency to maintain personal sales calls to telephone or
current position Internet

Combining Geographic Control
Units into Sales Territories
•  After setting up sales territories either by state, county, or
metropolitan statistical area (MSA), identify territories
that have a higher sales potential than others. z

Assigning Salespeople to Territories
•  In assigning sales personnel to

territories, managers should
rank them using these criteria:
–  relative ability
–  product and industry knowledge
–  energy level
–  persuasiveness
–  verbal ability
•  Before assigning salespeople

to a territory look for congruity
in terms of the following:
–  the salesperson’s physical,
social, and cultural
characteristics
Signs Indicating the
Need for Territorial Revisions
1.  As a company grows, it needs a
larger sales force.
2.  If territorial sales potential is
inaccurate, sales performance
may be misleading.
3.  Morale problems will emerge if
there are wide variations in
territory potential.
4.  Salesperson jumping
necessitates territory revisions:
•  often leads to higher costs
•  selling inefficiencies
•  low morale in the sales force

Self-Management:
How Salespeople Spend Their Time
1.
Sales
5. 2.
CRM/database Communication
How salespeople
spend their time
3.
4.
Team support Developing customer
relationships

Account Analysis

How Salespeople Spend Their Time

Dollar Cost of an Hour
of a Salesperson’s Selling Time

Self-Management:
Achieving Effectiveness and Efficiency
•  Effectiveness. Salesperson is
results oriented and focuses on
achieving sales goals.
•  Efficiency. Salesperson is cost

oriented and focuses on making
the best possible use of the
salesperson’s time and efforts.
•  Together, the two equal selling success:

S1 (Selling Success) = E1 (Effectiveness) + E2
(Efficiency)

Sales Effectiveness
•  To see a video on the impact of CRM technology
on sales effectiveness and productivity, visit
–  http://www.sellingpower.com/video/index.asp?
date=12/5/2006

Self-Management:
Measuring Return on Time Invested
•  Return on time invested (ROTI) is a financial
concept that helps salespeople spend their time
more profitably with prospects and customers.
–  ROTI = designated return/hours spent

Self-Management:
Setting Priorities
•  Top-performing salespeople always set
priorities in their work, based on the
following:
•  Parkinson’s Law:
–  Work tends to expand to fill the time allotted
for its completion.
•  Concentration Principle:
–  Often called the “80-20 rule,” it states that
most of a salesperson’s sales, costs, and
profits come from a relatively small
proportion of customers and products.

Ranking Customers According
to the Concentration Principle
20%
25% 70%
55% 23%
7%
Percent of Accounts Sales Volume Percent

Examples of the 80-20 Principle
20 percent of customers 80 percent of sales
20 percent of time 80 percent of selling
20 percent of products 80 percent of profits
20 percent of sales force 80 percent of revenues

Time Allocation Problems
•  Here are some examples of
salesperson time allocation
problems:
–  deciding which accounts to
call on
–  dividing time between selling
and paperwork
–  allocating time between
present customers, prospective
customers, and service calls
–  allocating time to spend with
demanding customers or new
prospects
Managing Salesperson Time
•  To maximize their productive
time, salespeople can take
these steps:
–  Avoid time traps.
–  Allocate time.
–  Set weekly and daily goals.
–  Manage time during sales calls.
–  Evaluate (monitor) time usage
over time.

Newly Appointed Sales Manager Coaching
Salespeople to Effectively Manage Time
•  To see a video on how sales managers can
coach salespersons to manage time, go to
–  http://www.sellingpower.com/video/index.asp?
date=5/29/2007

Common Time Traps
Salesperson calls on unqualified or Salesperson fails to prioritize work.
unprofitable prospects.
Salesperson insufficiently plans each day’s Salesperson procrastinates on major

activities. projects, resulting in redundant preparation
and paperwork.
Salesperson makes poor territorial routing Salesperson inefficiently handles paperwork
and travel plans. and keeps disorganized records.
Salesperson takes long lunch hours and too Salesperson fails to break up huge, long-
many coffee breaks. range projects into small, currently
manageable tasks.
Salesperson makes poor use of waiting time Salesperson ends workdays early, especially
between appointments. on Friday afternoons.
Salesperson spends too much time Salesperson fails to insulate self from
entertaining prospects and customers. interruptions or sales calls or while doing
paperwork.
Salesperson does not use modern Salesperson conducts unnecessary
telecommunications equipment like a cell meetings, visits, and phone calls.
phone, pager, facsimile, and laptop
computer.
Salesperson does tasks that could be Salesperson neglects customer service until
delegated to a staff person or to automated a small problem becomes a large one that
equipment. takes more time to resolve.

Routing Patterns
•  Territorial routing is devising a
travel plan or pattern to use when
making sales calls to efficiently
cover a territory.
•  A properly designed routing

system has three primary
advantages:
–  reduced travel time and selling
costs
–  improved territory coverage
–  improved communication (since
managers know where
salespeople are)

Routing Patterns
•  Before developing a routing plan, the
salesperson must determine the following:
•  the number of calls to be made
each day
•  the call frequency on each class
of customer
•  the distance to each account
•  the method of transportation

Routing Patterns
1.
Straight-line
route
5. 2.
Outer-ring Circular
approach Territorial patterns
routing
patterns
4. 3.
Hopscotch Cloverleaf
pattern route

Routing Patterns
Here are some types of routing
patterns:
1.  Straight-line route
•  Salesperson starts at the office and
makes calls in one direction until
reaching the end of the territory.
2.  Circular patterns

•  Salesperson starts at the office and
moves in a circle of stops until ending
up back at the office.

Routing Patterns
3. Cloverleaf route
–  A cloverleaf route is similar to a circular pattern.
–  But rather than covering an entire territory, the route
circles only part of a territory.
–  The next trip is an adjacent circle and the pattern
continues until the entire territory is covered.
Reprinted from PERSONAL SELLING, 2nd Edition, by Anderson/Dubinsky/Mehta © 2007 by Houghton Mifflin Company.
Routing Patterns
4. Hopscotch pattern
–  The salesperson starts at the farthest point from the
office and hops back and forth calling on accounts
on either side of a straight line back to the office.
Routing Patterns
5. Outer-ring approach
–  The salesperson first draws an outer ring around the
customers to be called upon.
–  Then, those customers inside the ring are connected
to the outer-ring route using angles that are as
obtuse as possible.
Using Computer Programs in Routing
•  Numerous computer-based
interactive models have been
successfully applied to sales
force routing and territory
management.

Using Computer Programs in Routing
•  To learn about optimization software programs

that assist in designing sales territory routing
paths, go to
–  www.alignstar.com
–  www.terralign.com/terralign4.htm
–  www.hallogram.com/mappro/businessmap.html
–  www.prior-analytics.com/solutions/sagecrm/
sagecrm.html
•  To learn about enhancing territory management
skills, see
–  www.crmondemand.com/training_support/
training_webseminars.jsp

Ethical Situation: What Would You Do?
Discussion Question
As the district sales manager for your company, you decide
which salespeople to assign to which territories. Among your
territories are two which have very low sales potential according
to Sales & Marketing Management magazine’s latest annual
estimates. You are thinking about assigning your two lowest
performing salespeople to these two territories because you
think this extra challenge will either motivate them or cause them
to quit which would be okay since it would allow you to avoid the
unpleasant task of possibly firing them later anyway. No matter
what the outcome, it seems like a win-win from your perspective.

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Chapter 7

Time and Territory

PowerPoint presentation prepared by

• Establishing Sales Territories

• Setting Up Sales Territories

• Revising Sales Territories Source: Flying Colours Ltd.

• Time Management and Routing

• Time and territory management

• Time and territory management

Control units should be as small as possible, for two

• To identify accounts by name, Yellow Pages

• The workload analysis can help

Sales call strategy? Sales call strategy?

Accounts are somewhat attractive since

Sales call strategy? Sales call strategy?

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 10

Sales call strategy? Sales call strategy?

Accounts are somewhat attractive since

Sales call strategy?

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 11

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 12

• In assigning sales personnel to

• Before assigning salespeople

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• Efficiency. Salesperson is cost

• Together, the two equal selling success:

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– ROTI = designated return/hours spent

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Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 22

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20 percent of customers 80 percent of sales

20 percent of time 80 percent of selling

20 percent of products 80 percent of profits

20 percent of sales force 80 percent of revenues

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Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 26

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Salesperson insufficiently plans each day’s Salesperson procrastinates on major

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• A properly designed routing

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2. Circular patterns

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• To learn about optimization software programs

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 37

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 7 | 38

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•  Establishing Sales Territories

•  Setting Up Sales Territories

•  Revising Sales Territories Source: Flying Colours Ltd.

•  Time Management and Routing

•  Time and territory management

•  Time and territory management

•  To identify accounts by name, Yellow Pages

•  The workload analysis can help

•  In assigning sales personnel to

•  Before assigning salespeople

•  Efficiency. Salesperson is cost

•  Together, the two equal selling success:

–  ROTI = designated return/hours spent

•  A properly designed routing

2.  Circular patterns

•  To learn about optimization software programs