Balanced sales territories are key to serve customers adequately and to generate fair and achievable interaction plans for the individual sales representatives in their territories. These well-designed territories are essential to ensure sales force motivation and high levels of productivity.
In order to determine the amount of territories that are in balance versus out of balance it is recommendable to build an alignment index. The latter allows to weight different parameters like e.g. workloads which is the number of planned customer interactions and market potentials i.e. the sales in values of your promoted products plus the competitor products for the latest available Moving Annual Total.
Some of you might yet not have built an alignment index which is the reason why I have put an illustrative calculation in an Excel sheet on my website which you can download. Please click on this link to get it for free.
Once the alignment indices are calculated for all your territories you can plot them in a bar chart in descending order. Afterwards the alignment corridor needs to be defined which is the acceptable deviation from the optimum of 1.000 index points. Often a range of plus minus 150 index points or plus/minus 15% is considered to be acceptable.
The following illustrative example shows alignment indices for ten territories:
As we can observe in this illustrative example all territories are falling into the alignment corridor which means that no territory realignment is needed. Often the picture in reality is a different one though which means that further action should be taken to bring the territories outside of the corridor back into balance. This is done by reassigning certain geographical areas or bricks between territories ideally using a professional territory alignment tool that allows to take geographical specifics into account. Building this territory balance analysis chart is relatively straightforward and represents an important Sales Force Effectiveness (SFE) health check which should be conducted on a regular basis. If you do not have the time though to conduct this quick SFE health check by yourself my offer to you now is to do this for you free of charge! If you are interested that I produce the alignment chart for you then please drop an email at support@xeleratio.com and I will be happy to prepare it for you. For those of you who will do this SFE health check by themselves I would be interested if at the end you could share with me the percentage of territories identified as outside of alignment corridor and if you are planning to realign territories in the near future. And should you need support in taking further action in this matter I would of course also be happy to support you with a powerful alignment tool.
How to build an #alignmentindex in order to check if your sales territories are still balanced or if #territoryrealigment is needed. #SFE #SFEHealthcheck #CommercialExcellence
Xeleratio Consulting Ltd.
We help Life Sciences executives improve sales performance with innovative best-in-class Business Excellence tools and methodologies . Expertise in Business Excellence has been gained with over 12 years of working in different global and regional roles in the Life Sciences industry.
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