An effective sales territory management plan helps retailers improve the performance of their sales teams, increase customer coverage, and boost sales.
On the other hand, a lack of a sufficiently robust territory business plan can reduce consistency and lead to poor customer satisfaction. For example, if goods are routinely out of stock in one location, it could reflect poorly on the entire brand, resulting in losing customers to competitors.
What is sales territory management?
Sales territory management revolves around groups of customers in a given geographic area, over which individual sales teams have responsibility. In CPG retail, these territories might be defined by factors such as sales potential, average incomes, and other localised variables. A territory management plan must be balanced, but it must also take into account the differences in each area. After all, it often doesn’t make sense to maintain identical inventories in every area, since demand can vary considerably from one store to the next.
#1. Start with a SWOT analysis
A SWOT analysis identifies the strengths, weaknesses, opportunities and threats facing your sales teams. In doing so, it determines the various internal and external factors that influence your sales performance. This creates a robust foundation for optimising your sales processes, including retail territory management. You should have a separate SWOT analysis for each store.
· Strengths: What does the team do best? These are its competitive differentiators.
· Weaknesses: What does the team lack, in terms of skills and other resources?
· Opportunities: Are there any unique opportunities, such as untapped local markets?
· Threats: Are there any threats, such as new competitors or regulatory standards?
Addressing these questions on a per-location basis will help you develop a stronger plan that aligns with the unique conditions of each region.
#2. Set sales goals and targets
To build a successful sales territory management plan, you need to determine your priorities and set realistic goals based on the insights garnered from your SWOT analysis. For example, if you want your teams to meet specific quotas, then you need to think about how you’re going to capitalise on the opportunities needed to achieve those goals. In another example, if a new competitor has opened up shop near a particular outlet, how will you maintain your competitive differentiator? By clearly determining what you want to achieve, you’ll be able to optimise your product inventory and give your regional sales teams clear objectives to work towards.
#3. Optimise your inventories
With your sales goals and targets in mind, it’s time to optimise your product inventories and planograms. These two things must always align, and they must be kept under regular review to ensure goals and targets remain relevant and attainable. It’s also important to consider seasonal trends, so sales schedules should define seasons for specific territories, at least if they’re dispersed across a very wide area. While consistency is important, especially for shoppers who routinely visit multiple outlets, it’s also important that what’s actually on your store shelves caters to local demand. This is even more important for international supermarket chains, in which local markets can vary significantly.
#4. Review and track results
Retail, especially in the case of CPGs, is constantly changing to the point it’s difficult to forecast sales and trends far ahead. Regularly reviewing, testing, and optimising your plan empowers continuous improvement, which helps reduce waste and keep the store shelves full with the items customers actually want to buy. Always look out for sales trends in each territory and keep an eye out for any unique supply or logistical challenges. Retail customer relationship management (CRM) software, combined with business intelligence, can help you put the plan into action and keep up with demand.
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