Territory Management

Allocating Field Territories: Why and How?

Allocating Field Territories: Why and How?

field territory managementHere’s what you don’t want: unnecessary travel costs, concentrated efforts in areas with low returns, or a lack of attention on your highest revenue-generating clients. Andris Zoltners of Northwestern’s Kellogg School of Management estimated that sales-productivity costs including territory re-alignment in America totaled $500 billion per year. Such costs caused by inefficient practices can be avoided with the right tools and methods for executing successful territory management and allocation.

The most useful tool of all? Data.

When your sales begin to expand and your field representative count grows past 10 or 20, it’s time to collect and evaluate client data to efficiently allocate sales territories. Such territories can no longer be simply defined by number of customers in a given geographic area. In fact, the most important metrics to measure according to Inc contributor, Tim Donnelly, are revenue and cost of maintaining client relationships. The costs can be measured by average interaction time which includes travel time, face-to-face time, phone call minutes, etc. By measuring these two metrics against each other, you can see each client’s cost to revenue ratio and prioritize them based on profitability for your company. You may even decide to drop clients if the costs for one client consistently exceeds the revenue you generate from them.

Pooling and crunching numbers from so many sources using pen and paper is highly conducive to error and tends to be inefficient. Instead, companies can now turn to technologies like field activity management software to compile and analyze the data. When data collection and analysis goes from taking hours of mental labor with high human error rates to taking seconds with little to no error, it becomes clear that such technology is worth every penny.


Once equipped with the right technology to prioritize your clients, you can strategically define and allocate certain territories to your field representatives. But your work doesn’t end there. Review and evaluation of territories is key. Perfecting territory management is not something that happens overnight. It takes a lot of patience and diligent observation of the ever-evolving market. Realigning territories should happen when necessary and logical, but should not happen more than once per year. Client retention is largely based on each client’s relationship with your company, and you can’t expect a relationship to grow when the face of the company is constantly changing for the client. Switching up territories too often can undermine the hard work of your field representatives as well, making them feel discouraged and less motivated. Additionally, territories should not be redefined based on the quality of a sales representative, but rather better sales representatives should be assigned to territories with high-priority clients; although these problems can be avoided by having a consistent, well-thought out hiring process.
Phil Brennan, president of Analytics in Focus, says “You have to monitor it but if you continually tweak [territory alignment] you are shooting yourself in the foot."  Once you become savvy at detecting and forecasting trends, you may not have to realign more than once in a three to five year time period.

By utilizing field activity management software to identify what each client means to you and proceeding to group clients into territories, your field productivity will grow, and both client and representative satisfaction will increase. To learn more about territory management, check out our free Territory Management Template Toolkit below.

 

 

Download the 2024 Outlook Report

As the retail landscape continues to evolve, it’s more important than ever to stay on top of the latest trends and challenges. Download our report today to see how more than 160+ CG executives and field leaders are strategizing for 2024.

Aya Tsuruta

Aya Tsuruta is a Content Marketing Journalist at Repsly where she covers sales and marketing content through a creative lens. In addition to writing for Repsly, she is a frequent contributor to the music blog, Indie Music Filter, and BC magazine, the Gavel.

Latest Posts

3 Min Read
Thriving in Retail: Tools for Success in the Home Improvement Market

Merchandising

Thriving in Retail: Tools for Success in the Home Improvement Market

Sara Bullock

Home improvement is one of the most highly competitive markets and any brand that has made its way into retailer giants such as Lowe’s and Home Depot knows that becoming a star in these stores is no..

3 Min Read
AI and Retail Execution: Highlights from Repsly’s Image Recognition Roundtable

CPG Tools & Tech

AI and Retail Execution: Highlights from Repsly’s Image Recognition Roundtable

Sara Bullock

This May, CPG and Retail Service leaders from around the world convened at the top of Boston’s Prudential Tower to discuss all things Image Recognition (IR) at our “Elevate Your Vision” roundtable.It..

4 Min Read
Webinar Recap: Yielding Higher ROI on Retail Execution in 2024

CPG Tools & Tech

Webinar Recap: Yielding Higher ROI on Retail Execution in 2024

Sara Bullock

2024 brings with it a breath of fresh air for CPG and Retail Service organizations. As inflation settles down and retail sales start to climb back up, CPG leaders are feeling much more confident than..