Sales Management

- balancing workload between the representatives

- sharing the selling opportunities between the representatives

- minimizing travel time

- minimizing the disruption to existing rep-customer relationship

1) Select sales coverage units (e.g. 4-digit zip-codes)

2) Decide on alignment objectives (workloadbalance etc.)

3) Choose starting points (e.g. starting with country and cut it into pieces)

4) Combine SCUs adjacent to starting points 

5) Make final adjustments --> Revise territory boundaries to balance workload and potential 

6) Assign salespeople to new territories

- Equal income opportunities for all salespersons

- Equal workload for all salespersons

- Minimization of travel times

- Allowance for simple performance evaluation of salespersons

Design of sales territories with equal sales potential and/or equal workload with at the same time lowest possible travel times 

1) Minimization of balancing criterion (e.g. workload, weighted distances to ensure compact territories)

2) Balanced territories within lower and upper bounds with respect to the k-th balancing criterion

3) The r-th SCU can be assignes to the j-th territory only if it is asjacent to a different SCU already assigned to the territory

4) A SCU can only be assignes to a territory at once

5) each SCU can only be assigned to one territory, but an not be assigne  to more than one at the same time 

- equal sales potential does not create equal income opportunities

- equal number of calls do not imply equal workload due to unequal travel times

- aside of that: equal income opportunities can also be achieved by individual sales quotas per salesperson

- workload is a result of the optimal calling policy --> calling policy depends on the results of optimal sales territory design

- balancing approaches do not provide results for:

- the necessity of territory changes

- the consequences of different salesperson's locations and different salesforce sizes 

1. Estimate the sales territory response function 

--> Provides sales volume as a function of calling-time on a territory level

2. Solve the allocation problem 

--> Provides the allocation of working-time of a salerperson across her/his SCUs

3. Solve the assignment problem

--> Provides the assignment of SCUs to sales territories with predetermined salesperson locations

- Balancing approaches often fail to establish sales territories with equal income opportunities and fair treatment of salespersons

- in contrast to the balancing approach, COSTA searches for the alignment that maximizes profit contribution

COSTA enables the comparison of the profitability of new territory designs with the already existing one

COSTA permits an assessment of the profit contribution impact of

- modified base locations of salespeople and

- different sales force sizes

COSTA is able to build territories that are usually not comparable in terms of income opportunities in the case of equal commission rates 

- How often should an account be called upon? (Calling frequency)

- How long should one call last and how long should the interval be between calls? (Timing)

- In which sequence should the various calls to accounts be scheduled? (Routing)

- The salesperson is responsible for an ever changing set of customers. Calls are made on request on short-term notice. 

- The salesperson serves as a fixed set of accounts according to fixed calling intervals. 

-->  A planning tool is only valuable for the second problem of planning routes for a prespecified set of calls to be made. 

1) Divide your territory into sections of equal size. It should be feasible to call on the resp. acccounts during a round trip (one day for each section)

2) Determine the optimal sequence of calls per tour 

1) Calculation of pairwise distances between accounts an between accounts and the salesperson's location according to routing software or based on coordinate

2) transformation of distances into travel time and costs

3) setting up constraints:

- maximum number of calls per trip

- maximum working time per trip

- time intervals in which a call is only feasible

4 )determination of a tour plan which minimizes either distances, travel times or travel costs. Methods are often based on the savings mehod 

- improving poor starting solution by combining two separate tours to just one tour

- this is worthwhile if it result in a saving of distance, travel time or cost

eij = dsi + dsj - dij > 0

dij: distance between the i-th and the j-th account 

dsj : distance between the salesperson's location and the j-th account

eij: savings as realized by merging two tours by connecting the i-th and the j-th account

This can be repeated as long as the total working time is not exceeded 

Channel Support

Relationship Selling

Promotional Activities and Sales Service

Entertaining

Prospecting

Travel 

Training and Recruiting

Product Support

Office Management

Educational Activities

Delivery

Computer Activities

- Theoretical background: experiments with animals at the end of 19th century

- assumption: stimuli used by salesperson lead to predictable customer reactions

- Salesperson has to know a repertoire of stimuli

- Stimuli: words, phrases, actions and pictures

- Exemplary application: Get several "Yes"-answers to get customer's compliance/approval

- Salesperson has control with 80-90% of particpation

- only at beginning and end of sales presentation, customer gives answers to pre-specified questions

- use of "canned" presentation to demonstrate product features

- not responsive to cusomer needs

- ask for order at end of sales call

Pro
- easy to understand and apply

- using audio-visual components possible

- gives security to inexperienced people

- lowest cost (recruiting and training)

Con

- not responsive to customer interruptions and requests

- experienced buyers prefer to play an active role int he sales interaction

- presented product details might be irrelevant from customer's perspective; converseley relevant info may be missing

- inexperienced low-qualified salespeople

- uncritical customers

- customers wanting functional products at moderate price

- straightforward, low-complexity buying decisions

- severy time constraints

- B2C rather than B2B

- Examples: telesales, door-to-door selling of customer goods, vacuum cleaners, etc. 

- Assumption: almost identical sales process for all customers, comprising different mental stages ("Mental Stages Selling")

- Seller leads customer through these stages by means of certain stimuli

- pre-structured presentation follows a general schedule similar to formula

- first and most commonly used formula: AIDA model

- Salesperson has control over large part of presentation (60-70% of talking time)

- focus on offering presented

- salesperson dominated beginning of presentation

- subsequently customer gets opportunity to raise questions and comments

- salesperson regains control towards end of presentation to get customer to sign contract

Pro: 

- little demands on salesperson

- gives security to inexperienced salespeople

- stronger customer involvement through anticipated questions and objections

- guarantees structured transmission of all information content relevant for the seller

Cons:

- higher demands on the salesperson compared to stimulus-response selling

- customer interruptions complicate determination of the right stage (mental stage) and disturb the pre-planned selling process

- stages frequently run through in different orders, in parallel or forward- and backward-jumping

- assumes that most buyers think alike 

- presentation not adapted to customer needs

- Re-buy situations --> sales without initual need assessment

- consumer goods

- customer-initiated selling situations --> attention and interest presumably given

- non-complex selling situations

- B2C (and B2B)

- Example: retail sales

- Process of supporting customers in achieving their strategic goals

- seller and buyer engage in a partnership --> disclosure, confirmation and joing achievement of strategic goals 

- Strategic Orchestrator

- Business Consultant

- Long-term Ally

- mobilize and coordinate information, resources and activities

- select team members, team coordination and representation with customer