Introduction
Manufacturers Insurance Group (MIG) is an insurance company
which provides insurance policies of manufacturing companies. They have
normally policies for employees like worker's medical cost injuring on the job,
employee sick leave coverage, and dozens of policies for manufacturers. The
operation area is 15 Midwestern States and later expanded to five more States.
Here five states represent territory graphical control units. In some cases,
States have been divided into two or three more territories to balance the
sales potential using account analysis and workload analysis. Ashley Roberts is
a sales manager in MIG and it's her job to analyze the information available of
the States and assign territories to the salespeople accordingly. The case talks
about the importance of distributing bigger territories to smaller territories
which helps to reduce traveling time and selling cost with improved outreach
and communication. The sales manager has to smartly use the statistics
available from any forms and create a proper plan and manage workload to
achieve a particular goal.
Discussion
1. MIG uses states as the geographic control unit. What are
the advantages of using states? Disadvantages?
The advantage of using states as the geographic control unit
is reduced time to travel and selling cost, improved territory coverage and
improved communication. The current and prospective customers in a particular
state can be identified, easily segmented, and covered. The responsibility of
each salesperson can be easily assigned which helps in the evaluation of their
performance. The relationship between salesperson and customer will improve
since the salespersons will look for specific areas only and can spend more
time which helps them to understand each other. The sales expenses will get
reduced due to less traveling or an overnight stay, and overlap of assigning
two salesmen for the same area. Due to the availability of data publicly, MIG
got information about potential customers in specific states like name, address,
officers, and a number of employees. These data helped the MIG to identify
which state owns a number of customers available for the insurance in the
manufacturing field.
The disadvantages of using states as the geographic control
unit are due to a large number of data accessible in public, it will take a long
time to collect and verify the information. The workload in the larger state
will be higher and also the claim rate will be higher. The time taken to get
the information from these large accounts will take a longer time and in
maintaining them. The number of salespeople to be hired will increase since
they are distributed in different regions in the US. Also, there might be a lack
of specialized salesperson available for large distribution.
2. What goal should Ashley Roberts have for determining
territories in the new five-state markets?
Ashley should create smaller control units to pinpoint the
location of sales potential, and assigning smaller areas help to make
adjustments easily. The control units have access to the census data and other
market information. Cost effective and customer oriented efficient Salesforce
should be developed. She should focus on increasing the performance of the
employees by creating well-designed sales territories. Choosing the right
salesperson for the right areas with responsible characteristics is needed.
Account analysis of the data that she had got from Statistical Data should be
verified with the data in the Yellow Page, this will help to determine
customers and potential prospects, and can determine sales potential.
Workload analysis should be developed by setting up sales
territories. Right people should be assigned so that the sales manager could
rate the performance level.
3. How would you assign territories if you were Ashley
Roberts?
If I were Ashley Roberts then I will assign territories by
first designing cost-effective, and efficient territories. In cost-effective
territories, overall selling cost can be minimized since travel cost and
lodging cost will be reduced and with the design of efficient territories,
salespeople can strengthen the relationship with the customers. All the
salespeople are not equal in abilities and experience. I would assign
salespeople to specific geographic location according to the customers'
characteristics so that the performance increases. For new salespeople, I will
send him/her with an experienced employee so that the particular salesperson is
groomed accordingly. Increasing efficiency of a salesperson will help to
achieve goals of management.
4. Since the data in Statistical Abstract are based on a
report that is a few years old, what other more recent sources could Roberts
use to ensure her decisions are current?
Ashley should go for political units. Political units include
"states, countries, zip code areas, cities, Metropolitan statistical
areas, trading areas, major accounts". These units consist of the latest
census data and other market information. The information she had from
Statistical Abstract need to be verified, she has to assign a large number of
salespersons to check the validity of the data. The data can be validated using
Yellow Pages by comparing Statistical Abstract data with the data in Yellow
pages. Though this will be a lengthy process for the first time in the future,
this information will be helpful in the future if it is stored in some
database. With the introduction to the technologies, the internet could be an important
source of information. She can buy information from the data provider company, and
also can watch the sales pattern of the competitors.
Conclusion
Sales territory management is one of the key factors to
achieve sales by lowering the selling expenses, time to travel, realizing the
potential location and customers, and growing relationship with customers.
Since the salespeople do not have to travel, they can spend more time with the
customers, and it will help to create a strong connection with existing and
potential customers. The sales manager should be smart to extract and analyze the
potential data of the customers and plan the sale accordingly. This will also
help to assign, and organize the workload of salespeople more effectively and
efficiently. Overall, territory management increases productivity, reduces
expenses, analyze the potential market and customers, and measure salesperson
performance.
References
Unknown. Sales & Distribution Management – Territory.
Retrieved May 4, 2019, from
Lowry, Josh. (2014). A Case for Sales Territories. Retrieved
May 4, 2019, from
MakingTheNumber. (2011, Nov 17). What are the top seven (7)
sales analysis sources of B2B lists. Retrieved May 4, 2919, from
