When creating territories for your salesforce, first step is to understand where the business is located geographically. Each territory has to pay its own freight, and ultimately be profitable. Market research should reveal where the potential lies. Depending on various aspects such as volume, access, customer segmentation, and more - this will determine which targets to select. Always remember that a territory should consist of where the business is, not necessarily where your sales rep(s) happen to reside.
Note: Data used for this example is fictional.
A common method for creating a territory is through what is known as a zip-to-territory alignment. This can be achieved only through the use of mapping software, such as mapline or espatial. Although the rule of thumb for a territory's size is an 80-mile radius from its epicenter, geography plays an important role. Geographies that are more densely populated such as New York and Los Angeles tend to have territories with smaller boundaries than those located in other parts of the country. Other terrain factors such as rivers, mountains, roads, etc. that affect driving accessibility should also be considered.
Reach (contacting a customer at least once) and Frequency (number of times the same customer is contacted) remain key essentials in spreading your business message and ensure success. A sales representative can make only a certain number of calls each day, so make them count.
The grid below is a simple workload outline for a pharmaceuticals rep. On average, an FTE makes eight (8) calls per day. This equates to approximately 2,088 calls within a year. Because not every customer requires the same frequency as others to move the business, we've assigned an Olympic medal (the value) to serve as a guide for the rep. Of course, there are varying metrics that vary into the medal classification such as: volume, access to the office, influence of managed care plans, etc.
As the grid suggests, a manageable number of targets for a pharma rep is somewhere in the 150 range. Just point your reps in the right direction and let them do what they love to do.. Sell!