Module 4 • Sales territories 2.4 Determine basic sales territories
Next, the sales manager combines the control units into sales territories. In this process, he also decides on the number of territories needed. The sales manager estimates the percentage of total sales potential that the average salesperson should achieve. Analysis of past sales experience helps in making this estimate, which, once made, is used to determine the number of territories. In effect, the sales manager estimates the sales productivity per unit and divides it into the total estimated sales potential, thus arriving at the number of sales units and territories required.
2.5 Assign salespeople to territories
Once the sales territories have been established, management can assign individual salespeople to each territory. Salespeople vary in experience, age, initiative, abilities and creativity. A reasonable workload for one salesperson may overload another and cause frustration. In addition, interactions of an individual salesperson with customers will be affected by environmental factors, such as customer characteristics, traditions, belief and political convictions. The result is that a salesperson may be outstanding in one territory and terrible in another, even though sales potential and workload for the two territories are the same.
In assigning salespeople to territories, the sales manager must first rank the salespeople according to relative ability. The sales manager will look at factors such as product and industry knowledge, persuasiveness and the salesperson’s ability. In order to judge a salesperson’s effectiveness within a territory, the sales manager must look at the salesperson’s physical, social and cultural characteristics and compare them to those of the territory. The goal of the sales manager in matching salespeople to territories in this manner is to maximise the territory’s sales potentials by making the salesperson comfortable with the territory, and the customer comfortable with the salesperson.
Problems in sales territory design Many problems will be encountered in sales territory design, particularly if there is an existing sales organisation used to servicing the market in any way it chose. The most obvious problem is resistance to change, for example a salesperson who is successful in one territory would not want to be moved to a new territory.
Usually, an uneven spread of customers exists in the market, which means that there is an imbalance in potential across geographical territories. Management should take this into consideration in terms of a physical adjustment to territory size or an adjustment in compensation.
Matching salespeople to territories from a personality point of view is another problem. Different sales territories have different types of customers/prospects and the sales manager will have to be careful to ensure that no mismatch occurs when the salesperson is assigned to cover a particular territory.
VIDEO: This video is an example of a software package (AlignMix) that businesses can use to set up sales territories. There are many such software packages available.
http://www.youtube.com/watch?v=Ho0cDmslUKs
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