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Management of Sales Territories and Quotas


.Designing Sales Territories Ideal objective in territory design is to have equal opportunity and equal sales workload for all sales territories.

Build up territories District A Customer Call Type Frequenc y per month A B C 4 2 1 No of No of Customer calls per s year District B No of No of Customer Calls per s year 3 7 20 30 144 168 240 552 4 8 28 40 192 192 336 720 Assuming that a sales person is able to make 5 calls a day.4 4 . SDM-Ch. and no of working days in a year are 250. then in a year he can make 1250 calls.

and physical characteristics of the salesperson with those of the territory Objective is to match salesperson to the territory . (3) past sales performance.Assigning Salespeople to Territories Sales Manager should consider two criteria: (A)Relative ability of salespeople Based on key evaluation factors: (1) Product knowledge. cultural. (5) selling skills (B) Salesperson’s Effectiveness in a Territory Decided by comparing social. (4) communication. (2) market knowledge.

Management of Territorial Coverage  How salesperson should cover the assigned sales territory It includes three tasks for a sales manager: • Planning efficient routes for salespeople • Scheduling salespeople’s time • Using time-management tools .

Routin g Routing is a travel plan used by a salesperson for making customer calls in a territory  Reasons for routing: • Reduction in travel time and cost • Improvement in territory coverage .

medium.Procedure for Setting up a Routing Plan  Identify current and prospective customers on a territory map  Classify each customer into high. or low sales potential  Decide call frequency for each class of customers  Build route plan around locations of high potential customers  Computerized mathematical models are developed Base C  Commonly used (B) routing pattern is: 1 C 5 C 4 C 3 C 2 Straight line / Hopscotch .

Scheduli ng  Scheduling is planning a salesperson’s visit time to customers. It deals with time allocation issue  How to allocate salesperson’s time? • Sales manager communicates to salesperson major activities and time allocation for each activity • How sales person should spend their time: Tasks Service Calls Face to Face Selling Waiting/ Travelling Others 15 32 21 32 Time Spent (%) .

Contd. based on sales and profit potentials. • Salesperson records actual time spent on various activities for 2 weeks • Sales manager and salesperson discuss and decide how to increase time spent on major activities  Companies specify call norms for current customers.4 10 .. and also for prospective customers SDM-Ch.

and qualifying. the tools available are: • High-tech equipment like laptop computers and cellular phones • Inside salespeople to provide clerical support. as they remain within the company • Outside salespeople can then spend more time getting more orders & building relationships with major customers . technical support.Time Management Tools To help outside salespeople to manage their time efficiently and productively. and for prospecting.

branches. salespeople. territories.Sales Quotas • Sales quotas are sales goals or targets set by a company for its marketing / sales units for a time period • Marketing / sales units are regions. and intermediaries  Objectives of Sales Quotas • To use quotas as performance standards or performance goals • To control performance • To motivate people by linking quotas to compensation plans • To identify strengths and weaknesses of the company .

Methods for Setting Sales Quotas • Several methods are used for establishing sales quotas • In practice. companies use more than one of the following methods to increase their confidence in sales quotas Territory potential Past sales experience Total market estimates Executive judgment Salespeople’s estimates Compensation plan .

Insight into Setting & Administration of Sales Quotas Set realistic quotas Understand problems in setting quotas Ensure salespeople understand quotas • By allowing salespeople to participate in the process • By continuous feedback to salespeople on their performance compared to quotas Have flexibility in administering quotas • Change quotas in cases of major changes in market demand or company strategies Use monthly or quarterly quotas for incentives and annual quotas for performance evaluation .