N5 Sales Management


• Determine sales potentials in each control unit. • Determine the basic territories. • Assign salespeople to territories.


2.1 Select a geographical control unit


The starting point in territorial planning is the selection of a basic geographical control unit, for example, Western Cape, Gauteng etc. The territory of a salesperson can consists of more than one metropolitan area. For example, a salesperson of Coca-Cola responsible for the Boland area includes areas such as Wellington, Paarl, Stellenbosch etc.


The unit must be as small as possible, because of the following reasons: • Management can identify the precise geographical potential of the area, because if the control unit is too large, areas with low sales potentials are hidden by inclusion with areas having high sales potentials; the opposite can also happen.


• A small unit will make any adaptation, if necessary, a lot easier. 2.2 Analyse salespeople’s workload


A salesperson’s workload analysis is an estimate of the time and effort required to cover each geographical control unit. This estimate is based on an analysis of the number of accounts/ customers to be called on, the frequency (once a week or twice a month) of the calls to be made, length of each call (half an hour, 20 minutes), the travel time required and non-selling time (administrative work/ exhibitions, etc.).


Several factors affect the number of accounts/customers that can be called on in each geographical control unit. The most basic factor is the type of visit (selling a new business’s product, service call etc.). Travel time between accounts also affects the number of accounts that can be called on. Factors such as conditions of roads, the weather and density of clients will influence travel time.


The frequency that accounts are called on is influenced by several factors. Accounts are generally grouped into several categories according to sales potential. Group A accounts (large) are called on most frequently, group B accounts (medium) less frequently and group C accounts (small) the least of all. Other factors that influence the call frequency are the nature of the product (complex product or simple re-order) and the level of competition.


Non-selling activities include preparing for sales calls, as well as order processing and after-sales account servicing.


2.3 Determine the sales potential in each control unit


Having identified existing and potential buyers, the sales potential in each control unit is determined. The planner ascertains how many potential buyers – A, B and C type customers – there are in each control unit and the unit’s total market potential.


The planner then estimates the portion of the unit’s market potential that the business has an opportunity to obtain (the sales potential).


Market potentials are generally converted into sales potentials by analysing historical market shares within each control unit, and adjusting for changes in business and competitors’ selling strategies and practices. Having made these estimates, the planner ascertains those control units with sufficient sales potential to justify sales coverage.


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