GfK GeoMarketing
Sales territory planning - a recurrent theme
The external sales force is the most expensive contingency of a sales division: each customer visit costs a company an average of between 120 and 800 euros; a single sales force member thus carries an annual price tag of 100,000 euros. These costs highlight the importance of taking a targeted, cost-benefit approach to the utilization of company expenditures. By regularly performing sales territory optimizations, businesses can ensure that nothing goes to waste, particularly with regard to sales force assignments. These optimizations serve to elevate the cost-effectiveness of the regions in question while improving profit margins and employee motivation. The upshot: A geomarketing approach actualizes potential, increases turnover and decreases costs.
A success story: Vichy's geomarketing-approach to sales territory planning
Since 2003, Vichy has been using DISTRICT, GfK GeoMarketing's geomarketing software solution for sales territory planning. Vichy's controlling team prepares the company data, after which a GfK GeoMarketing consultant performs a comprehensive sales territory planning analysis using DISTRICT.
A consultant's expertise significantly contributes to the sales territory optimization process, explains Stefan Mohrlang, a sales controller at Vichy: "A regularly performed sales network optimization makes sense both from the standpoint of the market as well as the company," he explains. "The challenge consists in keeping personnel informed with regard to emerging developments in our markets, while, at the same time, communicating a clear vision concerning the future direction of the company. Geomarketing has been pivotal in helping us accomplish this goal."
Sound sales and service territory planning involves taking multiple factors into account simultaneously, including the current state and projected growth of the market(s) in question, existing client-customer relationships, sales territory size, market potential, travel requirements for external sales team members, number and type of customers, transport networks and natural barriers such as mountains and rivers.
"After obtaining a comprehensive overview of our markets, we used DISTRICT and digital maps to illustrate and analyze the structure of our sales territory network as it existed at the time," says Mohrlang, describing the next phase of Vichy's sales restructuring. "We then defined the criteria that were relevant to our purposes. Finally, after producing some concrete restructuring suggestions using the software, we discussed the results with our external sales team, making sure that any proposed changes took their on-the-ground experience and insights into account."
Geomarketing creates transparency and highlights courses of action for sales force optimization
Regular sales structure reviews are an essential business practice and should ideally be done from time to time in the presence of an unbiased external consultant in order to ensure objectivity. It's not helpful simply to give the sales team members a top-level directive that they should shorten their driving distance or meetings with customers.
Geomarketing offers a transparent and trustworthy solution to this situation, providing well-grounded suggestions for changes in a visually compelling fashion. Moreover, a geomarketing approach incorporates the experience of all sections of a business as well as the expertise of consultants. The result: a selection of realistic, thoroughly researched suggestions for optimization that are much more likely to win the support and confidence of employees. Geomarketing facilitates concrete, straightforward proposals for how to hone in on the most promising regions of your market or reduce the travelling done by the external sales team.
"After the proposed changes have been discussed, a GfK GeoMarketing sales territory planning consultant manually fine-tunes the changes using DISTRICT," says Stefan Mohrlang, continuing his explanation of Vichy's restructuring process. "The fact that the results of changes made in DISTRICT can be seen immediately makes it an irreplaceable tool for restructuring."
Finally, the results of the restructuring are detailed in reports and illustrated on maps, both of which are passed on to all employees so that everyone is fully informed. "I was particularly impressed by the quality and straightforwardness of the results. Everything was very clear despite the complexity of the task," Mohrlang comments. "Geomarketing carried out with the help of DISTRICT and an experienced consultant is an immensely important component of Vichy's sales territory planning and optimization process."