sales territories & quotas [compatibility mode]
TRANSCRIPT
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Managing SalesTerritories & Quotas:
Session 5
Sanjeev Varshney
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Why do we need to have
territories ?
To serve the market better
Motivate the sales force-assigning them
direct responsibilities and authority
For effective control
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Territory Mapping Process
Top-down
Estimate Sales potential
of the complete market Prepare sales forecast
for the company
Break it down into
regions
Regions into areas Areas into territory
keeping forecast and
coverage in mind
Bottom up
Estimate sales potential for
each administrative
territory Club them into areas and
areas into region
Club regions into country
Determine sales forecasts
for each region/area Determine territories
keeping sales forecasts and
coverage in mind
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Factors to be considered while
determining territory potential
Current Demographics
Current Market Share
Competition
Characteristics of Distribution Channel Future Growth
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Steps to Determine sales force
size (industrial product)
Classify customers into categories
Determine frequency and length of
calls for accounts in each category
Calculate work load to cover entiremarket
Determine time available for sales
person
Apportion salespersons time by
task performed
Calculate the number of sales
people needed
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Methods for deciding sales
territories
Break-down method Based on sales forecast
Geographic territory allocation
Workload basis of territory allocation
Number of accounts Sales call frequency needed
Sales call time
Distance covered
Market conditions
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Steps involved in territory Design
& allocation
Select Basic Control Unit
Estimate Market Potential
Form Tentative Territories
Perform Work Load analysis
Adjust Tentative Territories
Assign sales people to Territories
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Territory Design
Select basic Control unit (depending upon control
and monitor) Consumer account
District
state
Estimate market potential Form tentative territories:
Combine contiguous areas
Avoid overlaps and criss-cross
Make equal territories
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Contd.
Perform workload analysis: (estimate the total effort needed to
cover the territory) Consider number of accounts and classify them
No of calls to be made to each category
Call duration
Estimated time of non-selling and traveling time Adjust tentative territories (regression based or judgement based
methods)
Assign sales people to territories based on their potential
Relative ability of salespeople
Sales persons effectiveness in a Territory
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Issues Involved with territory
design
Low coverage
Less time to motivate the channel members Less time to handle customer complaints
Less time to carry out training and development exercises
Difficulty in meeting targets
Excess coverage Over control
Low targets-so underutilization of resources andcapabilities
General grievance
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Territory allocation & PLC
Introductory phase:Geographic method
Growth Phase: Break Down Method
Maturity Phase: Work load basis
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Managing Territorial Coverage
Routing
Daily routes to be designed taking number and kind ofclients on such routes into account
Scheduling Days and frequency for covering these routes/customers
Productivity Effective coverage
Time Management Coverage as well as
effectiveness
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Territory Re-engineering
Assess the performance Sales man wise
Customer wise
Product wise
Channel wise etc.
Identify the gaps Sales man capability analysis
Time-motion study Carry out re-engineering only if no other person can cover it
Redesign boundaries
Combine the territories
Divide the territories (channel-wise, product wise, customer category wise)
Do short term review
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Sales Quotas
Sales volume Quotas
Financial Quotas
Activity Quotas
When to use what ?