Sales & Distribution Management

Chapter 12 : Time and Territory Management

+Time management and its importance

+Territory management and its importance

+Criteria for territory design

+Methods for designing territories

+Procedures for developing territories

+Operating the territory management system

Chapter Summary

Effective time management will significantly help a salesperson improve his performance. There has been a fundamental shift in organizations’ approach to time management with the advent of better technological options. Advancements in technology have simultaneously led to a significant increase in time pressure on the salesperson. However, technological advancements have also provided several techniques to help salespersons manage their time efficiently.

Efficient time management leads to better customer coverage, helps in reducing selling costs, improving customer service and helps in accurate evaluation of salespeople. A sales territory comprises a number of present and potential customers, located within a given geographical area and assigned to a salesperson, branch, or intermediary. Sales territories should be designed efficiently so that the potential of salespersons can be exploited to the maximum.

Sales territories are designed using the three methods – buildup method, breakdown method and incremental method. The buildup method consists of designing sales territories by assessing the attractiveness of current and prospective customers. In this method, current and prospective customers are identified and their sales requirements analyzed individually. Subsequently the salespersons are assigned territories on the basis of the sales volumes and the number of calls they are supposed to make to these accounts.

The breakdown method is the reverse of the buildup method and in this, the market potential for the product is identified and then the market share that the company is targeting assessed. Based on this, sales are forecast. This is followed by determining the average number of sales that each salesperson is required to make and the territories are then accordingly allocated to individual salespersons. In the incremental method, additional territories are created as long as the revenues generated from them exceed the cost of serving them.

Once the designing of territories is completed, salespersons are allocated to individual territories according to their capabilities. Routing and scheduling are two widely accepted techniques for territory management. Routing refers to the process of deciding the pattern of movement of a salesperson in his territory for making sales calls in a way that minimizes the total distance traveled, the travel expense and the travel time. Scheduling involves allocation of time to the various activities that a salesperson is involved in during a day, week and a month.

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