Sales Territory Design

Sales territory designing can be an extremely powerful sales force productivity tool.Sales Managers should evaluate, align, re-align, or optimize sales territory design , and communicate the results to sales people via easy to understand reports. This is critical to

• optimize sales force efficiency and selling time
• balance territory workloads and earnings potential
• improve sales force satisfaction and morale
• minimize travel time and costs, and improve customer coverage
• better manage resources and generate more revenue per coverage area

The process of Territory Design starts with need identification or opportunity analysis

Opportunity		Effectively manage and allocate limited sales staff Align coverage Balance workloads and expectations Meet projected needs Meet customer & prospect needs Expand service Target competitors
Process		Understand existing territories – analysis variables relationship such as, customers, prospects, product coverage and sales force location Understand sales force related variables – captive or independent, level, product mix, customer mix, involvement in process Build the in-house data file Determine alignment variables – coverage, number of customers, prospects, size, existing sales, potential Determine number of territories – ideal or budgeted Design and optimize territories Balance with secondary variables Update internal databases Support roll-out process
Tools		Performance Analysis Map Analysis Alignment List Development & Acquisition Model Requirements Channel Conflict Management Distributor Potential Studies

TOP down vs Bottom Up approach

There are two widely accepted methods of developing a sales hierarchy: bottom-up and top-down. These terms refer to the order used when building your sales structure. A bottom-up approach begins with the creation of the territories. When the territories are complete, they are grouped together to form districts. Then, when the districts are complete, they are grouped together to form regions.

The top down approach is simply the same process in reverse. First, regions are constructed. Next, districts are constructed within each of the regions. Finally, territories are constructed within each of the districts.

Both approaches offer advantages and disadvantages, but in most cases, your current situation will determine the approach that you take. If your district or region boundaries are fixed and not in need of change, you have to decide whether you want to build territories first and then group them together to form districts and then regions, or define your regions and districts first and then create your territories within the newly defined district boundaries. If you already have established territory, district and region boundaries, your task may be more of a fine-tuning than a realignment. On the other hand, if you need to change the total number of areas, regions, districts or territories, you may find it easier to start from scratch, using either approach.

Case studies : Focus on understanding concept of Territory realignment . Pl send in your request for a real life case study as a comment to this article

Reference Articles : Sales Territory Alignment