Relationship selling through service mkt 173 chap 14

Time, Territory, and SelfManagement: Keys to Success

McGraw-Hill/Irwin

Copyright © 2007 by The McGraw-Hill Companies, Inc. All

Chapter

14


Main Topics
 The Tree of Business Life: Time
 Customers Form Sales Territories
 Elements of Time and Territory Management

14-2

Chapter

14


The Tree of Business Life: Time

True

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h ic

al

ce
rvi
Se

T
T T
T T TT
T T T T
Builds

I

 View your territory as a business
 Treat customers differently




Relationships

T

Guided by The Golden
Rule:
Rule

C



depending on their needs
Value the customer’s time
Realize that how you spend your
time determines your life
Use your life to serve others and
enjoy a wonderful, fulfilling life
Seek, knock, ask, serve, and see
that ethical service build true
relationships


Customers Form Sales Territories

Customers Form Sales Territories


Sales Territory

Comprises a group of
customers or a geographical
area assigned to a salesperson
+ potential customers


Customers Form Sales Territories
 Why establish sales territories?
 To obtain thorough coverage of the market
 To establish each salesperson’s responsibilities
 To evaluate performance

 To improve customer relations
 To reduce sales expense
 To allow better matching of salesperson to customer’s needs
 To benefit both salespeople and the company – reach company’s sales objectives


Why Sales Territories May Not Be
Developed
 Salespeople may be more motivated if not



restricted by a particular territory.
The company may be too small to be
concerned with segmenting the market
into sales areas.
Not enough time or knowledge


Exhibit 14-2: Elements of Time and
Territory Management for the Salesperson
Salesperson’s
Salesperson’s territory’s
territory’s
sales
sales quota
quota


Salesperson’s Sales Quota

 The salesperson’s manager typically
establishes the total sales quota.
 Proper territory management by the
salesperson is an important factor in
reaching the sales quota.


Exhibit 14-2: Elements of Time and Territory
Management for the Salesperson, cont…
Salesperson’s
Salesperson’s territory’s
territory’s
sales
sales quota
quota

Account
Account analysis
analysis


Account Analysis
 The undifferentiated selling approach
(Exhibit 14-3)
 The account segmentation approach
(Exhibit 14-6)
 ELMS system
 80/20 principle
 Multiple selling strategies
 Multivariable account segmentation

(Exhibit 14-7)


Account Segmentation
1. Key Account
a. Buys over $200,000 annually
b. Loss would substantially affect profitability
2. Unprofitable Account
a. Buys less than $1,000 annually
b. Little potential to increase purchases
3. Regular Account
a. All other customers


Exhibit 14-3: Undifferentiated Selling
Approach

Slide 15-11


Exhibit 14-4: Account Segmentation Based
on Yearly Sales


Exhibit 14-5: Basic Segmentation of
Accounts


Exhibit 14-6: Account Segmentation
Approach

Slide 15-11


Exhibit 14-7: Multivariable Account
Segmentation

Slide 15-11


Exhibit 14-2: Elements of Time and Territory
Management for the Salesperson, cont…
Salesperson’s
Salesperson’s territory’s
territory’s
sales
sales quota
quota

Account
Account analysis
analysis

Set
Set account
account objectives
objectives
and
and sales
sales quotas

quotas


Develop Account Objectives and Sales
Quotas
 Sales volume quotas
 Profit quotas
 Expense quotas
 Activity quotas
 Customer satisfaction scores


Exhibit 14-2: Elements of Time and Territory
Management for the Salesperson, cont…
Salesperson’s
Salesperson’s territory’s
territory’s
sales
sales quota
quota

Account
Account analysis
analysis

Set
Set account
account objectives
objectives
and

and sales
sales quotas
quotas

Territory-time
Territory-time allocation
allocation


Territory-Time Allocation
 Seven basic factors to consider:
1.
2.
3.
4.
5.
6.
7.

Number of accounts in the territory
Number of sales calls made on customers
Time required for each sales call
Frequency of customer sales calls
Travel time around the territory
Non-selling time
Return on time invested


Territory-time allocation, cont...
 Sales response function:

 The salesperson 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 is
the sales response function of the customer to the
salesperson’s calls.


Exhibit 14-8: Account Time Allocation by
Salesperson

* every 3 months


Return on Time Invested
 Time is a scarce resource
 Break-even analysis to analyze costs:
 Breakeven Point ($)
= Salesperson’s fixed costs / Percentage of
gross profit


Return on Time Invested
 The management of time
 Plan by the day, week, and month
 Qualify the prospect
 Use waiting time

 Have a productive lunchtime
 Records and reports