trakki
Sales territory planning: grading your customers
By Manuel Ober · · 4 min read
The calculation that comes before everything else
A territory of 300 customers who all want to be seen every four weeks is 3,900 visits a year. A field sales rep manages six on a good day, so 1,200 across 200 working days. The territory is three times too big, and that is before the first week has been planned.
This is why territory planning does not start with the map, it starts with a sum: how many visits does the territory promise, and how many does the year allow? Anyone who skips that promises call cycles they cannot keep, and finds out at the end of the quarter.
Step 1: Grade the customers
Three classes are enough. More makes the grading finer, not better.
- A customers. The ones who carry the revenue, or are going to. Usually ten to fifteen per cent of the list.
- B customers. Solid, regular, without anything depending on them. The biggest block.
- C customers. Small, rare, or still unclear. New customers belong here at first, until they show what they will become.
When you take over a territory you inherit your predecessor's grading. It is a starting point, not the truth. After six months it looks different.
Step 2: One call cycle per class
The call cycle is the interval you want between two visits. A common ladder: A every 30 days, B every 60, C every 120. With 45 A, 150 B and 105 C customers that gives:
| Class | Customers | Call cycle | Visits a year |
|---|---|---|---|
| A | 45 | every 30 days | 540 |
| B | 150 | every 60 days | 900 |
| C | 105 | every 120 days | 315 |
| Total | 300 | 1,755 |
1,755 visits against 1,200 possible: still too many. Now you stretch, and you stretch at the bottom. C to 180 days (210 visits) and B to 75 days (730) gives 1,480. Stretch B once more to 90 days: 1,360. That is tight but workable, with the phone calls that do not need a visit.
The rule behind it: you stretch the C customers, then the B customers. Saving on the A customers means saving on the revenue.
Step 3: Bring in the locations
Only now does the map come in. The customer list with class and call cycle on a map shows three things a list never shows: where the clusters are, where the outliers are that cost kilometres and return little, and which C customers sit so far out that a visit every 180 days is still half a day gone.
For customers like that it is worth setting the cycle by location rather than by class. Whoever sits next to an A customer gets visited along the way. Whoever sits alone at the edge gets phone calls and one visit a year. How to get the list onto a map is in the guide Getting your customer list from Excel onto a map.
From the territory to the weeks
With class, cycle and location in place, the week is no longer an art. Who is due is settled; where the due ones are is shown by the map; the days follow from the clusters. The method for that is in the guide Route planning in field sales: plan your week in ten minutes, and for large territories with a night away in the guide Overnight or drive home.
After six months: adjust
A territory plan is wrong after six months, and that is fine. Two customers have grown and belong in A, three A customers have a new contact person and order less, a cluster in the north has turned out to be a drive for nothing. Go through the classes once every six months and you have a territory that fits you, instead of one your predecessor left behind.
How trakki does it
In trakki every customer carries a category and a call cycle, and the due date works itself out. The map shows the classes as colours and the due date as a state, and the week comes out of the due customers in one area. What the calculation above does by hand is on the map in trakki every day. Trying it costs nothing, to the home page.
Frequently asked questions
How many customers are too many for one rep?
The calculation decides that, not the number. 300 customers on a sensible cycle can be done; 150 customers who all want to be seen every two weeks cannot. Anyone promising more than 1,300 visits a year has a problem, no matter how many customers sit behind it.
Should I visit new customers more often than existing ones?
At the start yes, on a short cycle, until it is clear what they will become. After three visits they get a class like everyone else. Keep new customers on a two-week cycle permanently and after a year there is no time left for the A customers.
What do I do about customers who would be closer in a colleague's territory?
Raise it. Territory borders drawn along postcodes know nothing about rivers and motorways. A customer your colleague can reach in twenty minutes and you in seventy is a swap that helps both of you. The map makes the argument visible.