time, territory, and self- management: keys to success chapter 14 mcgraw-hill/irwin copyright ©...
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Time, Territory, and Self-Time, Territory, and Self-Management: Keys to SuccessManagement: Keys to Success
Time, Territory, and Self-Time, Territory, and Self-Management: Keys to SuccessManagement: Keys to Success
Chapter
Chapter
14
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
14-2
Main TopicsMain TopicsMain TopicsMain Topics
The Tree of Business Life: Time Customers Form Sales Territories Elements of Time and Territory Management
14C
hapterC
hapter
14-3
The Tree of Business Life: Time
Guided by The Golden The Golden RuleRule: View your territory as a business Treat customers differently
depending on their needs Value the customer’s time Realize that how you spend your
time determines your life Use your life to serve others and
enjoy a wonderful, fulfilling life Seek, knock, ask, serve, and see
that ethical service build true relationships
IT C
Ethi
cal Service
Builds
T r
u e
Relationships
TT T
T T T TT T T T
14-4
Customers Form Sales Territories
Customers Form Sales Territories
Sales Territory
Comprises a group of customers or a geographical area assigned to a salesperson + potential customers
Customers Form Sales Territories Why establish sales territories?
To obtain thorough coverage of the market To establish each salesperson’s responsibilities To evaluate performance To improve customer relations To reduce sales expense To allow better matching of salesperson to customer’s needs To benefit both salespeople and the company – reach company’s sales objectives
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Why Sales Territories May Not Be Developed
Salespeople may be more motivated if not restricted by a particular territory.
The company may be too small to be concerned with segmenting the market into sales areas.
Not enough time or knowledge
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Exhibit 14-2: Elements of Time and Territory Management for the Salesperson
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota
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Salesperson’s Sales Quota The salesperson’s manager typically
establishes the total sales quota. Proper territory management by the
salesperson is an important factor in reaching the sales quota.
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Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-11
Account Analysis The undifferentiated selling approach
(Exhibit 14-3) The account segmentation approach
(Exhibit 14-6)ELMS system80/20 principle
Multiple selling strategies Multivariable account segmentation
(Exhibit 14-7)
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Account Segmentation
1. Key Accounta. Buys over $200,000 annually
b. Loss would substantially affect profitability
2. Unprofitable Accounta. Buys less than $1,000 annually
b. Little potential to increase purchases
3. Regular Accounta. All other customers
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Exhibit 14-3: Undifferentiated Selling Approach
Slide 15-11
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Exhibit 14-4: Account Segmentation Based on Yearly Sales
14-15
Exhibit 14-5: Basic Segmentation of Accounts
14-16
Exhibit 14-6: Account Segmentation Approach
Slide 15-11
14-17
Exhibit 14-7: Multivariable Account Segmentation
Slide 15-11
14-18
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-19
Develop Account Objectives and Sales Quotas
Sales volume quotas Profit quotas Expense quotas Activity quotas Customer satisfaction scores
14-20
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Territory-time allocationTerritory-time allocation
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-21
Territory-Time Allocation Seven basic factors to consider:
1. Number of accounts in the territory
2. Number of sales calls made on customers
3. Time required for each sales call
4. Frequency of customer sales calls
5. Travel time around the territory
6. Non-selling time
7. Return on time invested
14-22
Territory-time allocation, cont... Sales response function:
The salesperson invests sales time in direct proportion to the actual or potential sales that the account represents.
The most productive number of calls is reached at the point at which additional calls do not increase sales.
The relationship of sales volume to sales calls is the sales response function of the customer to the salesperson’s calls.
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Exhibit 14-8: Account Time Allocation by Salesperson
* every 3 months
Return on Time Invested
Time is a scarce resource
Break-even analysis to analyze costs: Breakeven Point ($) = Salesperson’s fixed costs / Percentage of
gross profit
Return on Time Invested
The management of timePlan by the day, week, and monthQualify the prospectUse waiting timeHave a productive lunchtimeRecords and reports
Return on Time Invested cont…
Scheduling and routingStrict formal route designs enable the company
to: improve territory coverage minimize wasted time Establish communication between management and
the sales force in terms of location and activities of individual salespeople
Carefully plan your route
14-27
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Customer sales planningCustomer sales planning
Territory-time allocationTerritory-time allocation
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-28
Customer Sales Planning A sales-call objective A customer profile A customer benefit program Selling strategies must be developed for
individual customers and affect:FABsMarketing plansBusiness propositionsSuggested ordersSales presentations
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Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Scheduling and routingScheduling and routing Customer sales planningCustomer sales planning
Territory-time allocationTerritory-time allocation
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-30
Scheduling and Routing Some organizations determine strict formal
route designs for their sales people to: Improve territory coverageMinimize wasted timeEstablish communication between management
and the sales force in terms of location and activities of individual salespeople
Careful planning of route:A route can be planned using a road map and
map pins that indicate account size by pin color
14-31
Exhibit 14-10: Daily Customer Plan
14-32
Exhibit 14-11: Location of Accounts and Sequence of Calls
14-33
Exhibit 14-10: Daily Customer Plan (cont…)
14-34
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
14-35
Exhibit 14-10: Daily Customer Plan (cont…)
14-36
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= small accounts
14-37
Exhibit 14-10: Daily Customer Plan (cont…)
14-38
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= small accounts
= extra large accounts
14-39
Exhibit 14-10: Daily Customer Plan (cont…)
14-40
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= extra large accounts
= small accounts
= large accounts
14-41
Exhibit 14-10: Daily Customer Plan (cont…)
14-42
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= extra large accounts
= small accounts
= best prospects
= large accounts
14-43
Exhibit 14-10: Daily Customer Plan (cont…)
14-44
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= extra large accounts
= medium accounts
= small accounts
= best prospects
= large accounts
14-45
Exhibit 14-10: Daily Customer Plan (cont…)
14-46
Exhibit 14-11: Location of Accounts and Sequence of Calls (cont…)
= extra large accounts
= large accounts
= medium accounts
= small accounts
= best prospects
14-47
Exhibit 14-12: A Weekly Route Report
14-48
Exhibit 14-13: Three Basic Routing Patterns
Cloverleaf Pattern
Straight-Line Pattern
Major-City Pattern
First callWork back
Each leaf out and back the same day
Huntsville
Conroe
Kingwood
Houston
Baytown
Galvesto
n
(1 = Downtown)
14-49
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Territory and customerevaluation
Territory and customerevaluation Scheduling and routingScheduling and routing Customer sales planningCustomer sales planning
Territory-time allocationTerritory-time allocation
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-50
Using the Telephone for Territorial Coverage
Satisfy part of the service needs of accounts by telephone.
Assign smaller accounts that contribute less than 5 percent of business to mostly telephone selling.
Do prospecting, marketing data gathering, and call scheduling by telephone.
Carefully schedule personal calls to distant accounts.
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Territory and Customer Evaluation
Did the salesperson meet sales quotas?Sales volumeProfitExpenseActivityCustomer satisfaction
14-52
Exhibit 14-15: Net Sales by Customer and Call Frequency: May 1, 2005
14-53
Salesperson’s territory’ssales quota
Salesperson’s territory’ssales quota Account analysisAccount analysis Set account objectives
and sales quotas
Set account objectivesand sales quotas
Territory and customerevaluation
Territory and customerevaluation Scheduling and routingScheduling and routing Customer sales planningCustomer sales planning
Territory-time allocationTerritory-time allocation
Exhibit 14-2: Elements of Time and Territory Management for the Salesperson, cont…
14-54
Summary of Major Selling Issues How salespeople invest their sales time is a
critical factor that influences territory sales. Proper time and territory management is an
effective method for the salesperson to maximize territorial sales and profits.
A sales territory comprises a group of customers or a geographical area assigned to a salesperson.
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Summary of Major Selling Issues, cont…
Companies develop and use sales territories for a number of reasons.
Performance can be monitored when territories are established.
There are also disadvantages to developing sales territories.
Time and territory management is continuous for a salesperson – it involves seven key elements.
End of Chapter 14End of Chapter 14End of Chapter 14End of Chapter 14
Chapter
Chapter
14
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.