Time, Territory, and Self-Management: Keys to

Success

Chapter15

15-2

Customers Form Sales Territories

A sales territory comprises a group of customers or a geographical area

assigned to a salesperson

15-3

Exhibit 15.1: Reasons Companies Develop and Use

Sales Territories

15-4

Elements of Time and Territory Management

Salesperson’s sales quota (goals) may involve:Sales volume quotasProfit quotasExpense quotasActivity quotasCustomer satisfaction scores

15-5

Elements of Time and Territory Management, cont…

Account analysis:The undifferentiated selling approach (Exhibit

15-3)The account segmentation approach (Exhibit

15-6)ELMS system80/20 principle

Multiple selling strategiesMultivariable account segmentation (Exhibit

15-7)

15-6

Exhibit 15.3: Undifferentiated Selling Approach

Slide 15-11

15-7

Exhibit 15.4: Account Segmentation Based on Yearly Sales

E.L.M.S.

15-8

Exhibit 15.6: Account Segmentation Approach

Slide 15-11

15-9

Exhibit 15.7: Multivariable Account Segmentation

Slide 15-11

15-10

Elements of Time and Territory Management, cont...

Territory-time allocationBasic factors to consider

Number of accounts in the territoryNumber of sales calls made on customersTime required for each sales callFrequency of customer sales callsTravel time around the territoryNonselling timeReturn on time invested

15-11

Elements of Time and Territory Management Cont…

Territory-time allocationSales response function

Invests sales time in direct proportion to the actual or potential sales that the account represents

The most productive number of calls is reached at the point at which additional calls do not increase sales

The relationship of sales volume to sales calls

15-12

Exhibit 15.8: Account Time Allocation by Salesperson

* every 3 months

15-13

Return on Time Invested Break-even analysis

Salesperson’s Fixed Costs/Gross Profit %Direct Costs = Salary – (Transportation +

Expenses)Gross Profit % = Gross Profit / SalesGross Profit = Sales – Cost of Goods Sold If salesperson sells X amount of merchandise,

it covers the direct costsSales territory is a cost and revenue

generating profit center

15-14

Return on Time Invested Break-even analysis

Per HourCost Per Hour/Gross Profit % Cost Per Hour = Direct costs/Yearly Hours

workedSalesperson must sell $$ per hour in

goods/services to break even