1. Territory Management Key to Productivity
Account Analysis and Time Allocation
Single Factor Model: ABC Account Classification
Portfolio Models
Account Opportunity
Competitive Position
Decision Models
Sales Funnel - complex selling; not straight rebuy
Unqualified Opportunity
Qualified Opportunity
Best Few Opportunities
What are weaknesses of each???

2. Territory Management Key to Productivity
Customer Break-even Analysis
Figure 5-2
What are appropriate strategies for each account?
Greater account penetration
Sell expanded product mix
Consolidate orders A
Service by phone
Concede to competition B C
Protect from competition

3. Territory Management Key to Productivity
Breakeven Sales Volume
(Cost per Call) x (Number of Calls to Close)
Sales Calls as a % of Sales

4. Territory Management Key to Productivity
Salesperson Cost per Call
Direct Selling Expense
Cost per Call =
Total Calls per Year
Total Calls per Year =
(Net Selling Days) x ( Avg Calls per day)

5. A Portfolio Model Competitive Position Strong Weak Core Accounts
Accounts are very
attractive.
Invest heavily in selling
resources.
Growth
Accounts
Accounts are potentially
attractive.
May want to invest
in heavily
High
Account Opportunity
Drag
Accounts
Accounts are
moderately attractive.
Invest to maintain
current position.
Problem
Accounts
Accounts are very
unattractive.
Minimal investment
of selling resources.
Low

6. The Sales Funnel Unqualified Qualified Best few 19 17 24 20 16 14 23
50% closure probability
75% closure probability
90% closure probability 21 13 15 23 22 18 24 20 19 17 16 14 9 12 10 11 8 7 5 6 3 1 2 4

7. Personal Time Management
Importance
High Low
Emergencies
Time
Wasters
High
Urgency
Personal
Growth
Recreation
Low

8. Territory Management Key to Productivity
Industry Breakeven
Business Services ,096.37
Chemicals ,474.67
Construction ,730.00
Electronics
Food Products ,580.00
Instruments ,629.13
Machinery ,580.77
Office Equipment
Printing/Publshing ,811.61
Rubber/Plastics ,662.14

9. Developing a list of Prospects
Personal Selling
Developing a list of Prospects
1. Direct Inquiry
Advertising
Direct Mail
Trade publications
Trade shows
2. Directories -- Thomas Register
3. Referrals
4. Cold canvassing

10. Territory Management Key to Productivity
Minimum Account Size Exercise: Problem 1
$ x 4
.10
= $1.38
Smallest Customer Orders
1 call per month $345.00
2 calls per month $690.00
3 calls per month $1,035.00
Opportunity Cost: Low Volume vs. High Volume Customer

11. Territory Management Key to Productivity
Time Allocation: Problem 2
Why not allocate calls strictly based on % of sales?
What additional information should you consider
in allocating time?

12. Territory Management Key to Productivity
Portfolio Analysis: Problem 3
Where do allocation problems seem to occur?
Why might this happen?
Salesperson allocating on basis of current competitive
position, not on basis of account opportunity
Too much time on low opportunity accounts
Best Target: high opportunity, weak competitive cell
High opportunity, strong comp may be vulnerable to comp.

13. Territory Management Key to Productivity
Portfolio Analysis: Problem 3
Possible more productive effort allocation strategy:
Assuming number of Accounts in each cell roughly equal:
High/Strong 36 Calls per year
High/Weak 24 Calls per year
Low/Strong 10 Calls per year
Low/Weak 4 Calls per year
Is the assumption realistic?

14. Developing a list of Prospects
Personal Selling
Developing a list of Prospects
1. Direct Inquiry
Advertising
Direct Mail
Trade publications
Trade shows
2. Directories -- Thomas Register
3. Referrals
4. Cold canvassing

15. Sample Prospect Profile - Characteristics
Personal Selling
Sample Prospect Profile - Characteristics
Multiple-practice physician office
Internal medicine, family practice
Surburban location
New practice -- less than 5 years
Good credit history
Currently purchases from a full-service distributor

16. Personal Selling Qualifying Prospects
1. Needs for your products/services
2. Authority to make purchase
3. Credit rating & ability to pay
4. Rating scale applied to characteristics
by each salesperson

17. Productivity Crisis Selected Industries: Nominal Annual Growth Real
Sales Per Salesperson
Overall
Average $879,321 $1,499, % -0.9%
Selected Industries:
Drugs/Medicine $ 445,900 $2,460, % 11.4%
Paper 1,392,500 6,250,
Services 158, ,
Chemicals 490,000 1,357,
Electronics 665,400 1,880,
Building Materials 1,650,400 1,681,
Glass Products 1,390, ,
Tools/Hardware 908,300 1,312,

18. MINIMUM ACCOUNTS SIZE EXERCISE
You are a rookie salesperson with Associated Medical Supplies, Inc., a
wholesaler of disposable medical supplies. As new salesperson you are finding it
difficult to convince accounts to change from their current suppliers. The doctors
with whom you are having the most success tend to be small, single practices
located in the rural areas. Competition for these accounts is not as intense,
perhaps because their purchases are fairly small. They usually place about $900
of business with you a month. Nevertheless, they seem to be most appreciative
of your coming each week to take inventory of their supplies and write an order.
Furthermore, it is better than no sales at all.
Lately your boss has been getting on you because productivity has not
increased as much as he had hoped for when placing you in the territory. In
particular, direct selling costs including compensation, are currently 15% of sales;
whereas the total company’s target is for direct sales costs to be 10% of net sales.
In light of this, you are wondering if spending time on small rural physicians is the
best way for you to manage your territory. You have calculated that your cost per
call is currently $34.50.
Should you be calling on these small physician practices?
What is the smallest size customer you should pursue in order to meet your
company’s selling cost objectives?
What might you wish to consider in better managing your territory?

19. ABC Account Classification
If equal calls per customer:
% of % of
ACCOUNT No. of Total Sales Total Total calls Sales ($)
CLASSI- Accts. Accts. (000) Sales Per Classif. Per Call
FICATION (1) (2) (3) (4) (5) (6)
A % $ % $8,667
B ,000 C
Totals % $1, % $2,000 (Avg)

20. TIME ALLOCATION
As a salesperson for Strength Footwear, Inc., you have been very successful.
Your commissions are well over $70,000 a year. Demand for your product line is very
strong, but so is the demand on your time. You work your territory 220 days a year and
can make 4 calls a day. The maximum number of times you need to see any account is
every other week, but you need to call on each account at least once a quarter. To help
you allocate your time according to sales results, you have gathered the following
information on customer sales:
Accounts Sales Last Year
Top 10 Accounts $150,000
Next 10 best accounts ,250
Next 10 best accounts ,500
Next 20 best accounts ,500
Next 20 best accounts ,000
Next 20 best accounts ,750
Last 20 accounts ,000
$370,000
Develop and justify a call schedule for allocating time across the 110 customers in your
territory.
What additional information should you consider in allocating your time?

21. TIME ALLOCATION ANALYSIS
Number Total Percent Percent Sales
of Sales of of per
Accounts Volume Sales Accounts Account
10 $150, % 9% $15,000
, ,625
, ,550
, ,875
, ,850 , ,
110 $370, $ 3,364
Total No. Percent Sales
Accounts Call Pattern of Calls of Calls Per Call
Top Every other week $576.92
Next Once a month
Next Once a month
Next About every 2 mos
Next About every 2 mos
Next Once a quarter
Last Once a quarter
$420.45

22. Competitive Position Strong Weak High Low Segment 1 Attractiveness:
Accounts are very attractive because they offer high opportunity and sales organization has strong competitive position.
Selling Effort Strategy:
Accounts should receive a heavy investment of sales resources to take advantage of opportunity and maintain/improve competitive position.
Segment 2
Attractiveness:
Accounts are potentially attractive due to high opportunity, buy sales organization currently has weak competitive position.
Selling Effort Strategy:
Additional analysis should be performed to identify account where sales organization’s competitive position can be strengthened. These accounts should receive heavy investment of sales resources, while other accounts receive minimal investment.
High
Segment 3
Attractiveness:
Accounts are moderately attractive due to sales organization’s strong competitive position. However, future opportunity is limited.
Selling Effort Strategy:
Accounts should receive a sales resource investment sufficient to maintain current competitive position.
Segment 4
Attractiveness:
Accounts are very unattractive: they offer low opportunity and sales organization has weak competitive position.
Selling Effort Strategy:
Accounts should receive minimal investments of sales resources. Less costly forms of marketing (for example, telephone sales calls, direct mail) should replace personal selling efforts on a selective basis, or the account coverage should be eliminated entirely.
Low

23. Competitive Positition
Strong
Segment 1
Attractiveness:
Accounts are very attractive because they offer high opportunity and sales organization has strong competitive position.
Selling Effort Strategy:
Accounts should receive a heavy investment of sales resources to take advantage of opportunity and maintain/improve competitive position.
High

24. Competitive Positition
Weak
Segment 2
Attractiveness:
Accounts are potentially attractive due to high opportunity, buy sales organization currently has weak competitive position.
Selling Effort Strategy:
Additional analysis should be performed to identify account where sales organization’s competitive position can be strengthened. These accounts should receive heavy investment of sales resources, while other accounts receive minimal investment.
High

25. Competitive Positition
Strong
Segment 3
Attractiveness:
Accounts are moderately attractive due to sales organization’s strong competitive position. However, future opportunity is limited.
Selling Effort Strategy:
Accounts should receive a sales resource investment sufficient to maintain current competitive position.
Low

26. Competitive Positition
Weak
Segment 4
Attractiveness:
Accounts are very unattractive: they offer low opportunity and sales organization has weak competitive position.
Selling Effort Strategy:
Accounts should receive minimal investments of sales resources. Less costly forms of marketing (for example, telephone sales calls, direct mail) should replace personal selling efforts on a selective basis, or the account coverage should be eliminated entirely.
Low

27. PORTFOLIO ANALYSIS
You are concerned about your productivity and have decided to analyze your
account allocation strategy. You sell outdoor sportswear to women’s retail clothing
stores. The sportswear segment of women’s clothing has been growing rapidly though
some retailers have been quicker than others to recognize and take advantage of the
opportunity. You have ocmpiled the following account information from this past year:
Account Competition Sales
Account Opportunity Position Calls Sales
Designer Depot High Strong 24 $60,000
Fashion Conspiracy High Strong 22 $57,000
Clothes Time High Weak 15 $29,500
Moda Fashion Low Weak 15 $20,000
Peachtree Low Weak 17 $21,000
Tomorrow Fashion High Weak 18 $36,000
Reprise Low Strong 24 $34,250
Plus Fashions Low Strong 22 $35,000
Casual Girls High Weak 10 $14,000
Another Season Low Strong 21 $37,000
Bandiera’s Low Weak 15 $20,000
Sports Locker High Strong 20 $53,000
Assume that these accounts are representative of all your accounts. Contruct a portfolio
model and assess your effort allocation.
Where do time allocation problems seem to occur? Why might this happen?
Develop a more productive effort allocation strategy, given the information available.

28. PORTFOLIO ANALYSIS Competitive Position Account Opportunity
Strong Weak
Calls Sales
DD $ 60,000
FC $ 57,000
SL $ 53,000
Total $170,000
Avg.: $ 56,667
Calls Sales
CT $ 29,500
TF $ 36,000
CG $ 14,000
Total $ 79,500
Avg.: $ 26,500
High
Low
Account
Opportunity
Calls Sales
R $ 34,250
PF $ 35,000
AS $ 37,000
Total $106,250
Avg.: $ 35,417
Calls Sales
MF $ 20,000
P $ 21,000
B $ 20,500
Total $ 61,500
Avg.: $ 20,500

29. Number of Sales Calls Response Function
Dollar
Sales per
Quarter
$20,000
$10,000
Number of
Sales Calls
Per Quarter

30. Territory Management Key to Productivity
Prospecting Model -- Selling Priorities
Sales Funnel
FIRST Close your “Best Few”
sales objectives
SECOND Prospect for “Unqualified”
objectives
THIRD Work the “Qualified” objectives

31. Territory Management Key to Productivity
Territory Coverage
Judgmental Routing -- Basic Rules
Route should be circular
Route should never cross itself
Same route should not be used to
go to and from a customer
Customers in neighboring areas
should be visited in sequence

32. Territory Management Key to Productivity
Paths for Productivity Improvement
% Rating
Rank Important*
1 New Technology 69%
2 Incentives for Strategic Accounts 69%
3 Incentives for Strategic Products 68%
4 Improve Motivation Programs 57%
5 Increase Incentives on Volume 56%
6 Use Alternative:Telemarketing 45%
*Based on salespeople from 192 companies
Source: Sales & Marketing Management, Jan. 90, p. 41

33. Selecting a Partial Route using the Largest-Angle Methody 1 2 6 3
Start 5 x 4
Step 1

34. Selecting a Partial Route using the Largest-Angle Method1 2 6 3 5 4
Step 2-3
Biggest angle 1-3-4, choose 4

35. Selecting a Partial Route using the Largest-Angle Method1 2 6 3 5 4
Step 4
Biggest angle 3-4-6, choose 6

36. Selecting a Partial Route using the Largest-Angle Method1 6 2 3 5 4
Step 5
Choose 1

37. Selecting a Partial Route using the Largest-Angle Method1 6 2 3 5 4
Step 6
Outer ring

38. Route Exercise A
You are a salesperson for a large consumer goods manufacturer. You call on a set of retailers on a regular basis to ensure proper distribution of your products and to sell merchandising ideas for moving more of your product lines. You are expected to make 8 calls a day on the purchasing managers of your accounts. Normal operating hours for these stores is from 10:00 a.m. to 6:00 p.m., though most purchasing managers will arrive earlier and generally leave between 4:30 and 5:00 p.m. . Like most salespeople you work out of your own home. Below is the geographic lay-out of the accounts you plan on seeing tomorrow. Design a sales route for seeing these 8 accounts using the largest angle method. A B C D E H
Home G G

39. Largest Angle Method
Preliminary Route A B C D E H F G
Home

40. Largest Angle Method
Final Solution A B C D E H G F
Home

41. Alternative Solution
Travel Time Minimized A B C D E H G F
Home

42. Territory Management Key to Productivity
Salespeople’s Time Wasters
1. Telephone interruptions
2. Drop-in visitors
3. Lack of self-discipline
4. Crises
5. Meetings
6. Lack of objectives, priorities & deadlines
7. Indecision and Procrastination
8. Attempting too much at once
9. Leaving tasks unfinished
10. Unclear communication

43. Territory Management Key to Productivity
Sales Management Guidelines for
Involvement in Territory Management
1. Be aware of your management style which
with you and your salespeople are
most comfortable and productive.
2. Consider experience & maturity of your
sales force in deciding management style
3. Cold calling & prospecting are special cases ---
give extra attention when these are part of sales job.

44. Territory Management Key to Productivity
Sales Concentration
% Total Sales
100 80 60 40 20
Top
Top
10%
Top
20%
Top
50%
Source: SMM, Jan. 90, p. 40

45. Sample Prospect Profile - Characteristics
Personal Selling
Sample Prospect Profile - Characteristics
Multiple-practice physician office
Internal medicine, family practice
Surburban location
New practice -- less than 5 years
Good credit history
Currently purchases from a full-service distributor

46. Table 5-1 Computing the Cost per Call for an Industrial Products Salesperson
Compensation
Salary, commisions, and bonus $60,000
Fringe benefits (hospital, life insurance, social security) $69,000
Direct Selling Expenses
Automobile
Lodging and meals
Entertainment
Communications
Samples, promotional material
Miscellaneous ,250
Total Direct Expenses $90,250
Calls Per Year
Total available days days
Less:
Vacation days
Holidays days
Sickness days
Meetings days
Training days days
Net Selling Days days
Average calls per day calls
Total Calls per Year (205 X 3) calls
Average Cost per Call ($90,250/615) $146.75

47. Table 5-2 Selected Statistics on Cost per Call and Number of Calls Needed to Close a Sale
Source: Dartnell Corporation, 25th Survey of Sales Force Compensation.

48. Customer Break-even Analysis
Average Sales Volume
Per Month
$9,784
$8,153 C
$6,522
$4,891
$3,261 A
$1,630 B
Number of Sales
Calls Per Month