In the organization of the sales operation, once the necessary selling functions have been determined, the basic building block is the salesman`s territory. Defining the salesman`s territory comes down to matching the salesman`s available time with the average work load per account and the average travel time required between account calls.
The size of territory can vary tremendously, depending on the type of functions to be performed and the locations of customers. In selling expensive industrial equipment or materials a salesman may spend several days in one customer`s plant. A combination soft-drink salesman-deliveryman, on the other hand, may be able to make sixty or more store calls per day.
In certain types of industrial selling one salesman may call on a variety of industrial companies. It may be practical to assign him to a territory with fairly limited boundaries, such as one city or several countries. But where salesmen for the company`s products specialize by industry, territories may cover wide geographical areas.
Many sales managers who have gone through the steps of re-examining their sales organization have been surprised to find that the salesmen`s duties, as the managers describe them, are impossible to fill because of the territory to be covered. I know of actual territory layout studies where companies found that it would take from two to three times as many salesmen and territories as the company had currently if each salesman were to perform all the functions expected of him for all the accounts in his territory.
Because a major increase in number of territories and salesmen would not be economical – at least immediately – such studies have usually resulted in a more realistic redefinition of the salesmans job. This re-definition has usually meant that salesmen would concrentrate on accounts with major potential or would call only on accounts located in major areas of geographical concentration in order to reduce travel time. Smaller or outlying accounts, in such situations, were then handled either by infrequent salesman concact or by assignment to distributors or manufacturer`s agents.
These same studies usually revealed, also, that more volume could be obtained through adding additional sales territories. The new plans called for adding salesmen gradually so that new sales volume could be developed without a sharp increase in sales costs.
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