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Retail Audit Software: Key Steps to Set Up Sales Territories

Developing balanced sales territories provides an efficient environment for your field reps and allows using your sales force in the most efficient manner. Poor territory management causes such problems as dissipated resources, higher costs, territory overlap, and conflicts inside the field team that negatively impacts company’s goals achievement and result in decrease in customer loyalty and low sales.

Deciding how to manage your sales territories is much more than drawing lines on the map or distributing the existing clients between your field reps. We offer you the following step-by-step guide to align territories in a way that makes sense.

1. Review current retail conditions.
The content of this stage may vary and depends on the type of business. For the new companies it is preliminary planning to identify the conditions that will help to further set up sales territories (including study of potential clients and evaluation of the resources needed to reach them, competitor analysis, and etc.).

For the existing companies this stage involves analyzing previous results of sales teams performance and all the information about customers (location, order history, time spent by field reps at stores and on the phone with customers).

2. Set up quantitative goals and think moves to define targets. For example the goal is to boost revenue by 20 percent per year and the targets may include increasing the sales turnover, reach out to potential clients, stimulating dormant customers, obtaining new customers from your competitors, improving customer loyalty and etc.

3. Choose the method of territory division. You can learn about territory division methods from our previous article. The historic method based on prior experiences and results when field team manager estimates either sales or penetration from the previous period. The most common way of territory planning is to divide your territories by area code. This way allows a field team manager to clearly define the spheres of responsibility for each field rep. The most sophisticated way of territory management is to divide territories by categorizing customers.

4. Categorize customers if necessary. There are many criteria to categorize customers:  by sales space, size of retailer, store attendance, merchandise turnover, by the same products or similar needs. The more complicated way to categorize customers involves the use of two or more criteria simultaneously. For example you can set up customers categories based on the order amounts they generate and the time spent servicing them.

5. Assign field reps to the customers. After your customers are placed into certain categories you can start to distribute territories between your field reps. The main goal of territory planning is to maximize the time spent with customers and to minimize the time spent traveling between customers' locations and visiting low-return customers. Designed territories should also have equal potential for new customers. Consider your reps previous experience and personal connections to get the territories that provide best opportunities for each field team member. Keep in mind that implementing a retail audit software solution allows companies to sort and filter clients by location, properties, and names, to easily organize field rep assignments and redistribute customers in-bulk at a click of a button. 

6. Schedule retail visits. This stage also includes setting up tasks and optimizing field reps routes to make sure you use their time in the most efficient manner. Make decisions that are relevant to established territories. If you see that a certain territory has more points of sale than others assign it to the most efficient field rep. The high-return customers should be assigned of the field reps that have the highest order amounts or to those who have strong personal connections with the indicated customers. Field reps that have an opportunity to move fast for long distances should get customers in rural areas. 

Using a retail audit software solution for scheduling allows defining field reps responsibilities and avoiding territory overlap and conflicts between field reps. You can easily schedule visits in bulk for any period of time and optimize field reps routes automatically.

7. Monitor field teams performance. At this stage you see all the shortcomings of the territory distribution. Retail audit software implementation provides real-time data workflow to identify situations that require your immediate attention and make some operational changes.

8. Evaluate field teams performance to review territories.  Perform regular maintenance on the territories to make sure they are functioning properly. If you see that a field rep isn’t cutting a territory you can either give him a smaller territory or assign this territory to a better rep. Developing balanced territories make sure you do not revise your territories too often – customers always react negatively on field reps turnover. Today the option of in-house establishing of the sales territories is more affordable than ever: you can get your territory management solution completely free to see for yourself how it works.


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