Reasons for Salespeople

Salespeople’s ability to manage their time and territory is essential for three reasons. Salespeople who are efficient time and effective territory managers (1) increase productivity, (2) improve customer relationships, and (3) enhance personal confidence. Let’s examine each result more closely.

Increase Productivity. The more effective and efficient salespeople are in managing their territory and time, the more productive they are in the job. Management designs territories so that salespeople must exert maximum effort to reach the territory’s full sales potential. If a salesperson is not efficient in managing time and effective in managing the customers in the territory, he or she will not hit the sales targets set by the company.

At the same time, salespeople have many duties to accomplish with relatively little face-to-face time with customers. Time management makes sure that every minute with customers is productive. This is especially true in territories that require a lot of travel, where salespeople must manage time and territory so they can focus on relationship building. Research suggests that acquisition and retention of customers are critical activities that require extra time investment as determined by the salesperson and not the organization. In all organizations salespeople are directed to do these activities but research indicates this needs to be salesperson driven rather than organizationally mandated further reinforcing the importance of effective time and territory management.³

Improve Customer Relationships. One of the most constructive tools salespeople use to build customer relationships is effectively managing customer time. Wasting the customer’s time never leads to a better relationship. When the salesperson is on time, deals with customer concerns, and makes maximum use of the customer’s time, the customer relationship often improves. Remember, customers don’t see the entire organization. They see the salesperson. When the salesperson is efficient and effective, it raises the customers’ opinion of the entire organization. Building successful customer relationships means the salesperson knows when to see customers and what to say (and not say) while with them. Time and territory management are critical to that process.

Enhance Personal Confidence. What makes people confident? The answer is certainly complex and varies by individual. However, research suggests that capable time and territory management skills go a long way toward improving salespeople’s confidence that they can get the job done. Having the time to prepare properly for each customer enhances the salesperson’s comfort level and confidence and reduces stress.

Reasons for Sales Managers

Good sales managers know that skillful time and territory management is essential to (1) ensure territory and customer coverage, (2) minimize sales expenses, (3) assess sales performance, and (4) align company policies with customer expectations. Creating relationships that both satisfy customers and motivate salespeople depends in large part on helping salespeople manage their time and territory.

Ensure Territory and Customer Coverage. The single most effective way to make sure the company has the right relationships with its customers is to create territories that define where and how customers will interact with the company. Clearly, not all customers will be treated the same; however, defining the customer relationship and creating territories (which we will discuss later in this chapter) is vital to ensure that all customers have a salesperson (or sales team) to build the relationship.

In today’s selling environment, territory and customer coverage is much more difficult and demanding. Unique customer relationships may require salespeople to move between established territories. Some argue that this makes territories less important, but in fact the opposite is true. Not all customers warrant special treatment. Territory management ensures the company aligns the sales force appropriately with various customers.

Minimize Sales Expenses. Running a sales force is expensive, and a territory structure helps manage sales expenses. Creating territories eliminates duplication and maximizes salespeople’s face-to-face customer time while minimizing nonselling time. Few management activities have greater potential to reduce sales expenses than designing, creating, and monitoring the performance of sales territories.

Assess Sales Performance. How well is a product selling in Kansas? Why hasn’t our best customer, Gracie Incorporated, been buying as much from us in the last six months? Why are sales so high in our upstate New York territory? Sales managers ask questions like these every day, and territory management is critical to getting answers. By investing in a territory management system, managers can evaluate individual territories, districts, regions, or even countries to identify problems before they get too big and opportunities in time to capitalize on them.

Align Company Policies with Customer Expectations. As we discussed in chapter 5, the ability to collect data by product, customer, and territory, analyze it, and make decisions based on it helps managers make better decisions about recruiting, training, compensation, and a host of other key management activities. In addition, specific customer feedback provides a consistent, organized mechanism for managers to hear the customers’ needs and align company strategy with those needs. For example, salespeople can be hired with explicit qualifications (experience, background) to fit into specific territories or certain salespeople can receive training based on territory analysis and need identification.

Efficient Time Management

Time—everyone seems to need more of it, but unfortunately there is only so much to go around. Given the demands on their time, salespeople must become efficient time managers if they wish to be successful. For years people have examined the backgrounds and characteristics of successful salespeople, and good time management is one strength they list consistently. To manage their time efficiently, salespeople must (1) identify their personal and professional priorities, and (2) develop a time management plan.

Identify Personal and Professional Priorities. What’s important to you? That is a critical question in salesperson self-management. People spend time doing what they want to do or they spend time on things they don’t want to do, which eventually makes them less productive, frustrated, and even unhappy. Does this mean that you will enjoy every minute of being a salesperson (or whatever career you choose)? Of course not. However, it does mean that successful salespeople are successful in part because selling is consistent with their life and career goals. The process becomes even more complex when you consider aligning personal, professional and team priorities.⁴ Exhibit 10.2 shows the relationship between your personal and professional (sales) priorities.

Choosing priorities falls into two broad categories: personal and professional. Salespeople must identify their goals for each of these priorities. First, they must make choices about their personal priorities in life and career. Life priorities deal with basic choices in life. For example, is your family important to you? Most people would say yes, but just how important has a big effect on the choices you make in a career. Salespeople travel a lot, and those with children may not want to be away from their family. Complicating the decision is that people often begin with one set of priorities but, as life changes (they get married or have a baby or get divorced), their priorities change. Life priorities need to be reevaluated every so often to make sure that career and professional priorities are consistent (refer to Exhibit 10.3 for a discussion on the importance of priorities).

Career priorities deal with what kind of sales career you want to have over time. Historically, there are two basic choices: (1) a sales career, leading to a position as a senior account or key account executive, or (2) sales management. But there are other concerns too. For example, do you want to work for the same company (which usually means moving to new locations over time)? Or is your home more important (which means you may change companies over time)?

Professional priorities concern the sales task at hand and fall into two areas. Account priorities relate to goals and objectives for individual customers, such as increased sales or greater customer satisfaction year over year. Often these are the primary measures of individual sales performance (which we talk about in chapter 13). Activity priorities include goals such as number of new accounts, number of sales calls per week or month, and sales-to-expense ratio. These objectives are often identified by management or by management working with the salesperson to set specific performance goals for a given period of time.

Develop a Time Management Plan. Once you have identified personal and professional priorities, the next step is to develop a time management plan. The basic steps in a time management plan are not difficult to understand. The problem for most people is implementing the steps and sticking with the plan over time. The real benefits of a time management plan come when you incorporate behavioral changes into your everyday thinking.⁵ A good time management plan has three basic elements:

1. Daily event schedule. What are you going to do today?
2. Weekly/monthly planning calendar. What are you going to do this week? This month?
3. Organization of critical information. How do you control the information you need to be a good time manager?

DAILY EVENT SCHEDULE. Creating a daily to-do list is a time management tool almost everyone has tried at least once. The process involves sitting down in the morning or the previous evening, thinking about the specific tasks you want to accomplish, and prioritizing them. There are variations on this process, but all time management counselors, such as Franklin Covey, advise taking control of events and prioritizing what you need to accomplish every day. It is important to write them down either on a piece of paper or in a cell phone because writing down the tasks affirms their importance. A schedule you keep in your head is too easily changed because often things that come up during the day seem to be more important at the time.

WEEKLY/MONTHLY PLANNING CALENDAR. Daily event schedules are important, but everyone (especially salespeople) must plan for longer periods of time. The list of demands on their time is endless and changes every day. Salespeople have to plan everything from customer meetings to sales training seminars. An event one year out has a different level of commitment from an event scheduled for tomorrow, and certainly salespeople need to be flexible enough to change their schedule as needed. However, a calendar of events and tasks is essential for medium- and long-term planning.

ORGANIZATION OF CRITICAL INFORMATION. Salespeople are required to keep a lot of information close at hand and accessible. In addition to their own schedules, they need customer contact information, key facts about their company’s products/services, customer order and transaction data, and current memos, emails, or other correspondence. The ability to organize and create a system for easy access is important to time management.

Even just 10 years ago the primary system for tracking, storing, and accessing information was a filing system with drawers full of folders. Now, of course, the primary way to access information is through computers. For salespeople, that usually means laptops. Smartphones have become so powerful and interface with laptops so easily they have become an extension of the computer. One caveat, however: The laptop or cell phone is only as good as the information in it. Salespeople must regularly update their systems to keep the information as current as possible.⁶

Effective Territory Management

Although management is responsible for designing effective territories, it is most often the salesperson’s task to map out a specific routing pattern and call schedule. For example, management may tell a salesperson that a certain group of customers need to be called on once a week, another group twice a month, and a third group once a month. It is the salesperson’s job to define a plan that will accomplish this customer call frequency. In addition, salespeople are constantly communicating to management changes in the customer relationship that can affect the company’s perception of the customer and ultimately the call frequency.

Effective territory management involves two steps: (1) develop a territory management plan and (2) provide territory feedback to management.

Develop a Territory Management Plan. The most basic component of a territory management plan is the routing schedule, the plan for reaching all customers in a given time period and territory. It is developed with management input, but ultimately it is the salesperson’s responsibility to maintain and adjust the schedule. There are three basic goals in developing an effective routing schedule:

1. Maximize face-to-face selling time with customers.
2. Minimize nonselling time.
3. Provide adequate territory coverage across all customers.

Historically, managers would sit down with salespeople and a map to determine the most effective routes. Now sophisticated programs do the work. Companies like TerrAlign provide comprehensive software packages that design territories and map out individual sales call patterns. (Check out its ads in Exhibit 10.4.) Many of these packages interface with CRM programs and individual personal management packages like Microsoft Outlook.⁷

The second component of a territory management plan is communication. Salespeople know that successful territory management involves using technology to maximize their effectiveness. Customers want answers to questions now and often will not wait until the next scheduled visit, so salespeople use email and wireless technologies to deal with customer and company issues quickly. But immediate communication does not preclude face-to-face customer time. Customer questions can be answered in an email or phone call, but sales presentations and relationship building require one-on-one time with the customer.

Provide Territory Feedback to Management. Managing a sales territory is not a static procedure. Managers develop territories based on the best available information at the time, but conditions change literally overnight. Customers, competitors, and the general environment are changing all the time. Salespeople bring in new customers, existing customers move to different suppliers, and many other events can change the dynamics of a territory.

It is imperative that salespeople provide feedback to management on what is happening in the sales territory. Management does receive a great deal of information in the sales analysis (coming up in the next section), but salespeople are working in the territory and often develop an understanding that extends beyond the numbers. Analyses of customer, product, or territory sales cannot convey nuances in the customer relationship. For example, management changes at a customer can signal potential changes in purchasing patterns. This information would be known to the salesperson but not necessarily show up in current sales numbers.

This kind of feedback is important for two reasons. First, management needs to know this information so it can be aware of any potential problems or opportunities before it is too late. Second, salespeople can benefit from a shared information community. Once a feedback system is created, salespeople in one territory can hear about insights (or problems) from other salespeople around the country. Such information sharing can be extremely helpful for salespeople in the field.

Design the Most Effective Sales Territories

Sales managers strive to make all sales territories roughly equal with respect to the amount of sales potential they contain and the amount of work it takes a salesperson to cover them effectively. When the sales potential is basically the same across all territories, it is easier to evaluate each salesperson’s performance and to compare salespeople.

Equal workloads also tend to improve sales force morale and diminish disputes between management and the sales force. Sales managers should also consider the impact of particular territory structures and call frequencies. It is difficult (if not impossible) to achieve a perfect balance with respect to all these factors.

Exhibit 10.5 Stages in Territory Design

Sales managers should do their best to ensure fairness and equity in territory design. Salespeople do not perform well when their managers fail to consider the long-term effects of poor territory design. While managers should design territories based on rules and company priorities, and not for specific salespeople, they should consider personal issues. As we discussed, people’s priorities change over time, affecting their relationship with customers and their territory. The five steps in territory design are illustrated in Exhibit 10.5.

Step 1: Select the Basic Control Unit. The first step is for the manager to identify what is called the basic control unit. This is the fundamental geographic area used to form sales territories (county or city, for example). As a general rule, small geographic control units are preferable to large ones because low-potential accounts may be hidden by their inclusion in areas with high potential. This makes it difficult to pinpoint the true market potential, which is a primary reason for forming geographically defined sales territories in the first place. Also, small control units make it easier to adjust sales territories when conditions warrant. It is much easier to reassign the accounts in a particular county from one salesperson to another, for example, than it is to reassign all the accounts in a state.

The size of the basic control unit depends on many factors. Small, growing companies with a national distribution can manage the entire country with a relatively small number of salespeople. Business-to-business companies generally have fewer customers who are often concentrated in a limited number of areas (the automobile industry around Detroit, technology companies in Silicon Valley and the northeastern United States), which makes delineating basic control units easier. Business-to-consumer companies face a more difficult challenge, as they need a large sales force to cover a very large market area like the United States.

Getting the size and configuration of the territory correct is difficult and requires constant monitoring. Too small and the company will not maximize the full potential of the sales force (and increase sales expenses). Too large (the more common dilemma) and the organization can create problems in customer coverage and salesperson performance. As salespeople are asked to spread themselves over more customers (or geography) they may not be able to satisfy the requirements of each customer. In addition, they may not be able to discern important from less critical customers because of territory call demands. Performance can suffer and customers become dissatisfied.

While there are a number of basic control units, such as states and trading areas, we will focus on those most commonly used, which include counties, cities or metropolitan statistical areas (MSAs), and zip code areas.

COUNTIES. Counties are probably the most widely used basic geographic control unit. They permit a more fine-tuned analysis of the market than do states, given that there are over 3,000 counties and only 50 states in the United States. One dramatic advantage of using counties as control units is the wealth of statistical data available by county. The County and City Data Book, published biennially by the Bureau of the Census, is a great source of information on such things as population, education, employment, income, housing, banking, manufacturing output, capital expenditures, retail and wholesale sales, and mineral and agricultural output.⁸ It is available at the Census Bureau website. Another advantage of counties is that their size permits easy reassignment from one sales territory to another. Thus, sales territories can be altered to reflect changing economic conditions without major upheaval in basic service.

The most serious drawback to using counties as basic control units is that frequently they are still too large, especially in metropolitan areas. Los Angeles County, Cook County (Chicago), Dade County (Miami), and Harris County (Houston), for example, may require several sales representatives and must be divided into even smaller basic control units.

METROPOLITAN STATISTICAL AREAS. Historically, when most of the market potential was within city boundaries, the city was a good basic control unit. But now that the surrounding area often contains more potential than the central city, companies employ broader classification systems to help them identify and organize their territories. Developed by the Census Bureau, the control unit is called an MSA (metropolitan statistical area). MSAs are integrated economic and social units with a large population nucleus. Any area that qualifies as an MSA and has a population of one million or more can be recognized as a CMSA (consolidated metropolitan statistical area). Exhibit 10.6 ranks the 10 largest population centers in the United States by size based on the most recent data (revised 2014 census).

The heavy concentration of population, income, and retail sales in MSAs explains why many firms are content to concentrate their field selling efforts in those areas. Such a strategy minimizes travel time and expense.

ZIP CODE AND OTHER AREAS. In really large metropolitan areas when the city or MSA boundaries are too large, companies use zip code areas as basic control units. The U.S. Postal Service has defined more than 36,000 five-digit zip code areas. An advantage of zip code areas is that they are likely to be relatively similar in age, income, education, and other socioeconomic data and to even display similar consumption patterns (unlike residents within an MSA).

Although the Census Bureau does not publish a lot of data by zip code area, an industry has developed to tabulate such data by arbitrary geographic boundaries. The geodemographers, as they are typically called, combine census data with their own survey data or data they gather from such administrative records as motor vehicle registrations or credit transactions to produce customized products for their clients.

Adapted from “Estimated Ten Largest CMSA/MSAs in Decreasing Order of Size,” U.S. Bureau of the Census website www.census.gov.

Typically geodemographers analyze census data to identify homogeneous groups that describe the American population. Nielsen Companies, one of the leaders in consumer segmentation and market research, uses over 500 variables in the PRIZM PREMIER life stage group system to identify 68 segments in the American marketplace. It then examines residential neighborhoods to determine which segments live in each neighborhood. Nielsen and its competitors will do customized analysis for whatever geographic boundaries a client specifies. Or a client can send a list of the zip code addresses for its customer database and the company will attach the cluster codes. These analyses are expensive but they give companies, especially B2C organizations, tremendous insight into specific market segments.⁹

Step 2: Estimate Market Potential. Step 2 in territory design involves estimating market potential by considering the likely demand from each customer and prospect in a basic control unit. This works much better for B2B products than for B2C goods because B2B customers are typically fewer in number and more easily identified. Furthermore, each typically buys much more product than a B2C buyer. This makes it worthwhile to identify at least the larger prospects by name, estimate the likely demand from each, and add up these estimates to produce an estimate for the territory as a whole.

In B2C markets, historical data and market research results are combined with feedback from salespeople to estimate market potential in a given territory. Companies seek precise figures, but market potential is just an estimate and subject to change for a variety of reasons.

Step 3: Perform Workload Analysis. The next step is to determine how much work is required to cover each territory. Ideally, managers like to form sales territories that are equal in both potential and workload. Although step 2 should produce territories roughly equal in potential, they will probably require a decidedly unequal amount of work to cover adequately. In this step, managers estimate the amount of work involved in covering each territory and try to match the sales potential with the workload of each salesperson.

Account Analysis. Typically, the workload analysis considers each customer in the territory, emphasizing the larger ones. The analysis is often conducted in two stages. First, the manager does an account analysis to estimate the sales potential (the share of total market potential a company expects to achieve) for each customer and prospect in the territory. Then the sales potential estimate is used to decide how often each account should be called on and for how long. The manager determines total effort required to cover the territory by considering the:

• • Number of accounts.
• • Number of calls to be made on each account.
• • Duration of each call.
• • Estimated amount of nonselling and travel time.

CRITERIA FOR CLASSIFYING ACCOUNTS. Sales potential is only one of several criteria for determining an account’s attractiveness to the firm. In addition, the factors that affect the productivity of an individual sales call are likely to change from firm to firm. Factors likely to affect the productivity of the sales call include:

• • Competitive pressures. How many competitors are actively targeting the account?
• • Prestige. Is the account a market leader, or does it influence other companies in the industry?
• • Size. How big is the account?
• • Number and level of buying influences. How many individuals are responsible for buying decisions inside the account?¹⁰

DETERMINING ACCOUNT CALL RATES. Once the specific factors affecting the productivity of a sales call have been isolated, they can be treated in various ways. Customer accounts can be divided along two dimensions that reflect (1) the customer’s sales potential, and (2) the company’s ability to capitalize on that potential (competitive advantage or disadvantage). Each account is then placed in the account planning guide matrix in Exhibit 10.7. The guide uses account potential and the firm’s competitive account advantage (disadvantage) to classify accounts into four cells that require different call frequencies. The heaviest account call rates in the sample matrix depicted in Exhibit 10.7 would be on accounts in cells 1, 2, and possibly 3, depending on the firm’s ability to overcome its competitive disadvantages. The lowest planned call rates would be on accounts in cell 4.

DETERMINING CALL FREQUENCIES ACCOUNT BY ACCOUNT. Accounts do not have to be divided into classes and call frequencies set at the same level for all accounts in the class. Instead, the firm might want to determine the workload in each tentative territory on an individual account basis. One popular approach is to estimate the likely sales to be realized from each account as a function of the number of calls on that account. There are many methods for doing this. In one common approach, someone in the sales organization (typically the salesperson serving the account but sometimes the sales manager) estimates the sales-per-sales-call function to determine the optimal number of calls to make on each account. Much of this work is now done by sophisticated programs that optimize call frequencies and even design sales territories (refer to our earlier discussion on TerrAlign). CRM systems like those from Oracle provide a wealth of opportunity for data collection toward estimating future sales based on calls on particular customers.

DETERMINE TOTAL WORKLOAD. When the account analysis is complete, a workload analysis can be performed for each territory. To determine the total amount of face-to-face contact (direct selling time), multiply the call frequency of each type of account by the number of such accounts. Combine the amount of direct selling time with estimates of the nonselling and travel time required to determine the total amount of work involved in covering that territory.

Step 4: Define Sales Territories. Step 4 in territory planning defines the boundaries of the sales territories. While attempting to balance potentials and workloads across territories, the analyst must keep in mind that the sales volume potential per account changes over time. It is also likely to vary with the number of calls made. Computer call allocation models such as TerrAlign consider this. However, many sales managers rely on personal intuition or historical data, which do not take workload changes into account.

Exhibit 10.7 Account Planning Guide Matrix

Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 12th ed., (London: Routledge, 2016).

Clearly there is a relationship between account attractiveness and account effort. Account attractiveness affects how hard the account should be worked. At the same time, the number and length of calls affect the sales likely to be realized from the account. Yet these relationships are not directly recognized in many managerial decisions used to determine territory workloads. The firm needs a mechanism for balancing potentials and workloads when adjusting the initial territories if it is not using a computer model. Critical customer relationships will certainly affect account attractiveness and may necessitate adjustments to the overall territory configuration.

Step 5: Assign Salespeople to Territories. After territory boundaries are established, the analyst determines which salesperson to assign to which territory. In the past, these assignments ignored differences in abilities among salespeople and in the effectiveness of different salespeople with different customers. At this stage in territory planning, the analyst should consider such differences and attempt to assign each salesperson to the territory where he or she can contribute the most to the company’s success.

Unfortunately, the ideal match cannot always be accomplished. Changing territory assignments can upset salespeople. It would be too disruptive to an established sales force with established sales territories to change practically all account coverage. If the firm is operating without assigned sales territories, then the realignment might be closer to the ideal. However, a firm with established territories typically must be content to change assignments incrementally and on a more limited basis.

The assignment of salespeople to sales territories also incorporates personal considerations. The firm may not want to change call assignments for particular accounts because of the potential for lost business. It may not want to reduce sales force size even if the analysis suggests it should because of morale problems associated with downsizing. Even increasing sales force size can be disruptive. More salespeople means more sales territories, which means redrawing existing boundaries, changing quotas, and disrupting potential for incentive pay. In sum, sales managers want to consider the people involved when they redraw territory boundaries and minimize disruptions to existing personal relationships between salespeople and customers.

Measure Sales Territory Performance

Once the territories have been developed and the salespeople assigned to them, it is important for the manager to monitor how well sales are doing. This is different from evaluating a salesperson’s individual performance (which we will examine in chapter 13). Here we are looking at how well the product, customer, or territory itself is doing relative to its potential. The process may be a relatively simple one of comparing company sales in two time periods or it may involve detailed comparisons of all sales (or sales-related) data among themselves, with external data, and with like figures for earlier time periods.

The major advantage of even the most elementary sales analysis is the ability to identify those products, customers, or territories in which the firm’s sales are concentrated. A heavy concentration is very common. Often 80 percent of the customers or products account for only 20 percent of total sales. Conversely, and more significantly, the remaining 20 percent of the customers or products account for 80 percent of the total sales volume. This is often called the 80:20 rule, or the concentration ratio.¹¹

The same phenomenon applies to territories. A few of the company’s territories often account for most of its sales. The 80:20 rule describes the general situation (although, of course, the exact concentration ratio varies).

Managers who wish to undertake a sales analysis must decide the (1) sources of information and (2) types of information aggregation they wish to focus on in the analysis. Exhibit 10.8 provides an overview of the nature of these decisions.

Sources of Information for Sales Analysis. A key decision for sales managers is what sources of information to use in the analysis. The firm first must determine the types of comparisons that it wants to make to determine how well customers, products, and territories are doing. A comparison with sales in other territories will require less analysis than a comparison against market potential or quota or against the average sales in the territory for the last five years.

The firm also needs to decide the extent to which preparing the sales report should be integrated with preparing other types of reports. These may include inventory or production reports or sales reports for other company units such as other divisions.

The document with the most information is usually the sales invoice. From this, the following information can usually be extracted:

• • Customer name and location.
• • Product(s) or service(s) sold.
• • Volume and dollar amount of the transaction.
• • Salesperson (or agent) responsible for the sale.
• • End use of product sold.
• • Location of customer facility where product is to be shipped and/or used.
• • Customer’s industry, class of trade, and/or distribution channel.
• • Terms of sale and applicable discount.
• • Freight paid and/or to be collected.
• • Shipment point for the order.
• • Transportation used in shipment.¹²

Other documents provide more specialized output. Some of the more important of these are listed in Exhibit 10.9. As you have learned, CRM systems facilitate the capturing of customer information, which can be analyzed and applied to particular sales analysis questions.

Software that links processes such as bid estimation, order entry, shipping, billing systems, and other work processes is called an enterprise resources planning (ERP) system. Boeing uses an ERP system to price out airplanes.¹³ Each airline and private customer fits out each jet differently, so the salesperson’s proposal has to account for each different item in order to derive a price. Also, commission has to be paid on the sale, parts have to be ordered for manufacturing, delivery has to be scheduled. The ERP helps manage all of these functions. As with CRM, the information generated through enterprise software is an invaluable resource in sales analysis. Firms like Oracle and IBM market ERP systems that are integrated throughout the companies and cost millions of dollars to install and maintain.

Types of Information Aggregation for Sales Analysis. The second major decision managers must make when designing a sales analysis is what they want to study (products, customers, territories). The most common and instructive procedure is to assemble and tabulate sales by some appropriate groupings, such as these:

• • Salesperson territories divided by state, county, MSA, or zip code.
• • Customer or customer size.
• • Product or package size.
• • Size of order.

Exhibit 10.9 Sources of Information for Sales Analysis

Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 12th ed., (London: Routledge, 2016).

The kind of information a company uses depends on things like its size, diversity of product line, geographic extent of sales area, number of markets, and customers it serves. Different people in the organization may want different analyses. Product managers will focus on territory-by-territory sales of their products. On the other hand, sales managers will likely be much more interested in territory by salesperson or customer analyses and only secondarily interested in the territory sales broken out by product. Global Connection summarizes sales analysis reports for a major B2C food products company.

Summary

One of the most important activities for both salespeople and sales managers is the efficient and effective management of time and territory. Salespeople who are good time and territory managers can increase productivity, improve customer relationships, and enhance their confidence. Sales managers also benefit by ensuring territory and customer coverage, minimizing sales expenses, assessing the sales performance of customers and products, and aligning company policies with customer expectations.