TTG, Incorporated: Professional Territory Design Software Since 1988

Computerized Territory Design Improves Business

By David Pinals, TTG, Inc. 

Sales territory design and management is one of the most critical, but least automated aspects of the corporate sales organization. While companies have readily adopted computer-based systems for sales call reporting and lead tracking, they've been slow to apply the latest technology to sales force deployment

Today, software systems are available to help companies:

• Perform "what-if" planning
• Identify untapped areas of opportunity
• Match territory opportunity to sales rep experience
• Determine the impact of either downsizing or expanding an existing sales force
• Optimize sales rep travel time to increase selling time
• Monitor sales force performance
• Evaluate sales rep placement

One system providing these and other benefits is a new, highly sophisticated sales territory design and management system called AlignStar. This system was developed and is supported by experts in sales force deployment at TTG, Inc.

Specialized Systems Application

What follows is an actual example of a mid-size U.S. manufacturer that used AlignStar to handle the growth of its sales operation. For the purposes of this article, the manufacturing company will be referred to as POWER Corp., a pseudonym. Several years ago, POWER Corp. was experiencing rapid sales growth thanks to the success of newly introduced products and the revival of some older lines. It needed to find a way to better manage its sales force, which was adding several reps each year. In the past, when the firm experienced slow but steady growth, it relied on the gut instincts of field managers and reps to carve up the sales "pie". The company would simply place a rep in the next major metropolitan area that seemed to carry enough potential. Initially, this seemed to work well. But rapid growth and geographic expansion began to overwhelm sales planners. According to POWER Corp.'s sales director, "We had to find a way to step back and take a broader view. When you're investing nearly $100,000 to develop each new territory, you have to be sure you're going to get the largest return on your investment."

The manual procedures POWER Corp. used to manage territories became too cumbersome and time-consuming to continue. The firm's district managers spent up to a week making territory adjustments. And even then, they weren't sure they were making equitable territory assignments.
The company wanted to centralize and standardize its territory management process. It needed to ensure its sales reps were matched with territories which offered comparable potential. POWER Corp. wanted to find ways to increase productivity and efficiency without further increasing the size of its sales force.

Realignment

POWER Corp.'s sales director knew there was a better way to manage his sales territories. He knew he would eventually realign his entire sales force, but before doing so, he needed to know more, a lot more. POWER Corp. decided to bring in a sales territory design and management system, along with a consulting team from TTG to assist with analysis and realignment services.

TTG proposed a three-stage program:

Stage 1 - Identify the critical data to properly evaluate existing sales territories.

Stage 2 - Evaluate existing sales territories to identify new opportunities.

Stage 3 - Realign sales territories to obtain optimal coverage, minimal travel and a balanced distribution of sales opportunity.

Although many companies do not use a consistent set of geographic units to define sales territories, POWER Corp. had been using 5 digit ZIP Codes. A plus, since it was relatively easy to load this information into a computer database. This information was critical to complete Stage 2 an analysis of POWER Corporations current sales territories. AlignStar easily linked to an Excel spreadsheet of the existing territory definitions. Sales data, "targeted" prospect counts and the existing territory assignments were loaded in the system.  

After reviewing POWER Corp.'s data, analysts turned up some startling findings. At POWER Corp., as at many companies, territories were assigned based on sequentially numbered ZIP codes. But sequential numbering didn't always guarantee adjoining geography. This proved especially true in major cities where ZIP codes were so dense they were difficult to find on a conventional map. The inherent difficulty in managing an assignment of over 40,000 ZIP codes surfaced as overlapping territories and thousands of "missing" ZIP codes. As if this weren't enough, some extreme travel inefficiencies also turned up. For instance, several reps lived an inordinate distance from their target prospects. Typically, this resulted in un-serviced accounts. In addition to these geographic shortcomings, inequities in sales rep workloads and sales potential were uncovered. Many territories were found to have 25, 50, even 100 percent more target prospects than territories covered by similarly qualified reps. The pre-realignment analysis found POWER Corp. calling on only 35 percent of its target prospects. The worst part was that higher territory potential didn't always coincide with greater sales activity. POWER Corp. was missing out. 

Treatment Begins

POWER Corp.'s first step was to make the territories contiguous. ZIP code islands assigned to one rep but embedded in adjacent territories were reassigned. Territories were then adjusted based on the location of sales representatives' homes, major highways and target prospects, all of which could be viewed simultaneously using the AlignStar software. Easy access to all areas of a territory was an important factor in the POWER Corp. realignment since it reduced overall travel time leaving more time for prospects. The new system allowed POWER Corp.'s sales planners to use a variety of criteria to balance the new territories. One of the critical factors used to increase sales effectiveness and improve distribution was to assign a value to prospects based on their estimated sales potential. For example, those prospects considered to be important were weighted as two calls, while those not targeted were weighted as one-third of a call. A first cut at the nationwide realignment was carried out by TTG working with senior management. 

During the second phase of the realignment, regional and district sales managers worked with the consultants to fine tune the proposed deployment plan. This field input was essential to make sure local market conditions were factored into the process. Long-standing relationships between particular prospects and their reps, for instance, were maintained whenever possible. It also ensured their acceptance of the new plan. The input sessions showed field managers an objective realignment and proved their vital role in the process. The degree of sales manager involvement determines, to a great extent, how a realignment will be received by the field sales force. District managers transmit their opinions about the fairness of realignments to the reps they manage. There has to be give and take. If you can show you're responsive to sales peoples' needs in the field, then you stand an excellent chance of success.

Once the realignment was completed, color-coded maps of sales territories showing highway systems and prospect concentrations by ZIP code were created and distributed.

Continuous Refinement Is Easy

Since the realignment, POWER Corp. has become completely self-sufficient with the AlignStar software. The company uses the system regularly to monitor sales performance and fine tune territory assignments as market conditions and sales force size changes. The system's "what-if" capability has proven to be one the most important features for POWER Corp. It gives them the luxury to experiment and arrive at the best plan. Countless hours have been saved by eliminating much of the mail between district managers and the home office. Where it once took a week of more to realign a single district,  
POWER Corp. can now complete several districts a day.

POWER Corp. has achieved numerous benefits from its realignment, including:

• More face-to-face time with customers and prospects
• A five to seven fold reduction in time spent on territory management.
• Improved market coverage.
• More travel efficient and more equitable sales territories.
• Improved sales force morale.
• A 5% increase in total sales revenue

POWER Corp. has extended its use of the system for market research, competitive intelligence and sales analysis. In some regions, the firm is using the system to track advertising effectiveness by comparing sales results to advertising activity. While different companies have unique ways in which they address the issue of sales force deployment, there's little question that a specialized sales territory design and management system like AlignStar can improve the way most can handle this vital task. The use of the system usually is an eye-opening experience.

David Pinals is the President and CEO of TTG, Inc. in David Pinals is the President of TTG, Inc. in Burlington, MA. He is the founder of TTG and the creator several territory design software applications including Territory Planner, STARmanager, ASTRO, Territory Mapper and most recently, AlignStar. Mr. Pinals holds a graduate degree in Applied Geography and has assisted businesses in solving sales force deployment problems since 1982. TTG provides solutions for their clients that include both software and consulting services. David Pinals may be reached at TTG, Inc. by calling (781) 272-8900 or via the contact form.

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