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Territory Management

Territory Management. TERRITORY. A territory geographically defined area assigned to a sales person present customers potential customers. SALES FORCE PRODUCTIVITY. A crisis-- In the last ten years, selling costs have risen almost twice as fast as average sales volume per salesperson.

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Territory Management

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  1. Territory Management

  2. TERRITORY • A territory • geographically defined area • assigned to a sales person • present customers • potential customers

  3. SALES FORCE PRODUCTIVITY • A crisis-- • In the last ten years, selling costs have risen almost twice as fast as average sales volume per salesperson

  4. HOW SALESPEOPLE SPEND THEIR TIME • Face-to-Face Selling = 30% • Telephone Selling = 21% • Waiting / Travelling = 20% • Administrative Duties = 17% • Service Activities = 12%

  5. SALES FORCE PRODUCTIVITY • How can we improve productivity? • Focus on high volume accounts • Focus on selling time

  6. MINIMUM ACCOUNT SIZE • Don’t pursue accounts that are unprofitable!!

  7. COST PER CALL • Cost per call is a function of • number of calls per day • number of days available to make calls • direct selling expenses • Direct Selling Expenses # Calls per day X # Days to Sell

  8. COST PER CALL • Example (see Table 5.1; page 230) • Total Direct Expenses = $90,250 • 205 days to sell; average 3 calls per day • Cost per call = $90,250 / 205 x 3 = $146.75

  9. BREAK EVEN SALES VOLUME • The sales volume necessary to cover direct selling expenses • Breakeven Volume is a function of: • Cost per call • Number of calls to close • Sales costs as a percentage of sales

  10. BREAK EVEN SALES VOLUME Cost Per call X # of Calls to Close Sales costs as a % of Sales

  11. BREAK EVEN SALES VOLUME See Table 5-2; page 231 Electronics Industry --Cost per call = $133.30 --Number of calls to close = 3.9 --Sales Costs as a % of sales = 12.0 Breakeven volume = $133.30 x 3.9 / .12 = $4,332.25

  12. TERRITORY IMPLICATIONS • Perform a customer by customer analysis! • Assess selling strategy

  13. ALLOCATION OF SELLING EFFORT • Consider the time we spend with customers! • Single Factor Models • Portfolio Models • Decision Models

  14. SINGLE FACTOR MODELS • Easy to develop and use • Classify accounts into categories based on one factor, such as market potential • Assign all accounts in the same category the same number of sales calls • Decisions are made on the basis of one factor. Differences among accounts are not taken into consideration

  15. THIS IS ONLY A PARTIAL VIEW OF THE DOCUMENT.

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