Product Support Sales Territories - Aftermarket
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Product Support Sales Territories

Written By: Ron Slee

Article Date: 04-02-2007
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.


How should you set up and manage your territories?

I have just completed a Product Support Marketing class in which we established territories and set up compensation programs for parts and service sales for a group of dealers. It was very revealing for them - and for me. Here's what we did - and what you should do if you haven't already:

Create an Excel spreadsheet of your parts and service customers that includes purchases and services purchases for 2005 and 2006. Then insert three columns in the file: One will be for the parts segment, one for the service segment and one for the parts and service segment.

There are some mundane steps in here, but please humor me and go through the entire exercise.

  • Get the total number of parts and service customers.
  • Sort the file in descending parts sequence.
  • Put a "0" in the parts segment column for the first 10 percent of the customers.
  • Put a "1" in the parts segment for the next 15 percent of the customers.
  •  Put a "2" in the parts segment for the next 25 percent of the customers.
  •  Put a "3" in the parts segment for the last 50 percent of the customers.
  • Sort the file in descending service sequence.
  • Put a "0" in the parts segment column for the first 10 percent of the customers.
  • Put a "1" in the parts segment for the next 15 percent of the customers.
  • Put a "2" in the parts segment for the next 25 percent of the customers.
  • Put a "3" in the parts segment for the last 50 percent of the customers.
  • Then add the parts segment and the service segment together and put the result in the third column.
  • Now sort the file in descending sequence of the combined segment.
  • Anything that has a segment code of "5" or less should be covered by a parts and service salesman.
The number of customers you have in these parts and service segments determines how many parts and service sales reps you should have in the field. This isn't opinion or feeling; it's marketing pure and simple.

These groups of your customers are the top 25 percent of the parts customers in purchases and the top 25 percent of your service customers in their purchases. These two segments codes were combined into one market segmentation code for simplification.

So how many customers did this exercise turn up for you? How many product support sales reps should you have in the field? How many do you have in the field? Are the number that you should have and the number that you do have the same?

Take the names of the customers identified and divide them into territories with 100 to 150 customers. The number might even be lower than 100 depending on the number of machines each of these customers has. If you don't have accurate machine populations, start with the territories as outlined above and require each sales rep to bring in a complete and accurate machine population listing for each of the customer in their territories.

That's it. It's a straight-forward approach to a controversial subject: How many parts and service sales reps should you have in the field?

Now you need to establish sales objectives for each of these customers and a coverage model that determines the number of calls each should get each year. Then develop the sales tools for each of the parts and services you are selling to your customers.

How many of your parts and service sales reps have been to a sales class? How many of you have computer sales presentations, handouts, or testimonials your sales reps can use? I thought so - we'll discuss that next month.



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Article Categories:  Product Support  »  Sales