Map It Up
Mapping software helps sales managers navigate the road to balanced territories.
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Picture this. Your company announces a new compensation plan. The incentive: Reps who exceed territory goals can earn a 50 percent bonus. The result: A fired-up sales force that sells more, right?

Not if the territories are unbalanced, it's not. If one territory has more accounts, more prospects or just more lucrative accounts than another, reps in that territory will have more earning potential than their colleagues. Most sales managers would agree that's a recipe for disaster. Disgruntled reps in less fortunate territories will lose motivation and may even leave the company. It's easy to lose sales because of mismanaged and unbalanced territories.

The solution, sales pros say, is to carry out periodic realignments that attempt to balance the potential of each territory, resulting in equal opportunity for all. But, typically, this annual or even quarterly task is mostly a matter of guesswork. Sales managers take their spreadsheets listing reps and accounts, Rand McNally maps and colored markers into a conference room and vow not to come out until they've made a color-coded map showing all the territories. Balancing workloads and sales potential is haphazard and often unsuccessful.

Take Pennsylvania's state lottery for example. Territory management was in disarray when Automated Wagering International, an Atlanta company that supplies technology and services to state lotteries, won the contract to manage its marketing. The state hires 67 sales reps to visit retail shops that sell lottery tickets and make sure the stores are selling and promoting according to state guidelines.

"When we took over the account, some reps serviced as few as 60 accounts while others serviced as many as 160," says Doug Walters, marketing information services manager for Automated Wagering. According to Walters, some reps were driving through other reps' territories to get to the areas they serviced. Up to three or four reps were sharing the same ZIP codes. Several reps were visiting the same small town.

If this scenario sounds familiar, you'll be glad to hear there's a better way. Business- mapping programs fitted out with territory- optimization algorithms can automatically create balanced territories based on any variables you select-workload, drive time, market potential and more. The programs can then print out maps showing all the variables color-coded. Even better: Because of the power of today's PCs, these programs can run on your desktop and are easy enough for a non-technical person to master. Powerful programs will even offer you a range of options from which to choose. What used to take days, now takes only a few minutes.

For the Pennsylvania lottery account, Automated Wagering used a mapping application called TerrEyes from Conclusive strategies in Wimberley, Texas. Walters loaded data on rep and customer locations into the program, chose some parameters for balancing the territories-such as the number of accounts he wanted each rep to service, the maximum drive time to each account and the amount of time a rep should spend at an account. TerrEyes then came up with balanced territories. Using territory mapping, Walters was able to optimize workloads by as much as 50 percent.

"Before we took over, the reps were servicing accounts based on the `buddy system,'" says Walters. "Each rep kept all the accounts he obtained. Now, reps call on the accounts that are closest to where they live."

"Skunk Works"
Mapping technology is not new. The Geographic Information Systems (GIS) industry has been around for decades. Companies like Troy, N.Y.-based MapInfo and Redlands, Calif.-based ESRI originally designed their sophisticated software for such functions as helping utility companies map cable or oil and gas lines.

"Mapping technology in the old days functioned on the `skunk works' model," says Frederick Limp, director of the Center for Advanced Spatial Technologies at the University of Arkansas. "A bunch of guys did mapping with a bank of computers behind a glass wall. The department was often isolated from the rest of the company."

According to Limp, mapping is coming out from behind the glass wall. PCs have gotten more powerful, and mapping applications have gotten easier to use, so nonprofessionals are using them more and more for business analysis. "Within a few years, mapping will become part of companies' mainstream information systems," predicts Limp. "Optimizing territories will be as easy and commonplace as doing the payroll."

Do You Need It?
Territory mapping systems can benefit any size company, but if you have 50 or more reps, and if you have several sales territories, the software's value will start to surface. Territory mapping software is particularly useful for companies that are experiencing a large amount of change in their customer base or large sales force turnover. Has your company recently merged with another corporation? Territory mapping software can help you successfully join the two sales forces. Did you just release a new product? The software can help you decide where and how to deploy your reps.

Consultant Larry Daniel, who developed TerrEyes, doesn't recommend realigning sales territories any more than necessary, though. "Many companies review their territories once a year," he says. "Doing it any more frequently would disrupt the reps' working lives too much." Most territory mapping software vendors also offer to perform territory mapping as a service. At $3,000 to $5,000 per project, outsourcing your mapping needs could be less expensive than buying the software yourself. On the other hand, if you are in an industry such as pharmaceuticals, where quarterly territory realignments are common, buying the software may seem like a good idea.

Circon Corporation, a Santa Barbara, Calif., medical equipment manufacturer, bought Woburn, Mass.-based TTG's stARmanager to help pinpoint market potential for its products. Magee Shoaf, Circon's sales and marketing analyst, looks at the company's territories on a quarterly basis to determine if Circon's 122 salespeople are adequately covering the areas with the most market potential. To do a territory analysis, Shoaf loads sales figures and five-digit ZIP codes into stARmanager. She also loads data detailing which products shipped into which ZIP code and where sales reps and customers, like hospitals, are located. StARmanager does the analysis and Shoaf can then look at territories on a dot-density map. She assigns a value for each dot-for example, a dot equals $10,000 in sales-and then plots the dots on a map with squares representing sales rep locations.

"If the dots are dense in an area where there are no squares, I know there is a coverage problem," she says. The program also takes into consideration drive time to keep the territories compact. Shoaf says the mapping software saves her a lot of time. The alternatives would be to pay a consultant thousands of dollars per project or to do it herself manually. StARmanager "does everything except make my coffee," she jokes.

Mapping How-to
No matter what territory mapping package you choose, there are four common steps that most programs guide you through to create fair sales territories.

First, you have to load data into the mapping application. The data can be information you already have in the company's internal databases, such as a list of reps and where they live and a list of current accounts, with their locations and sales amount. Data can come from external sources as well, including information specific to your industry such as demographic data that helps you gauge each geographic area's business potential. This data will need to be geo-coded, which means assigning a latitude and longitude to each address. Some software has geo-coding built in; in other cases, you may have to buy geo-coding capabilities separately.

Once the raw data is in, you'll have to choose balancing attributes, or parameters. For example, you could stipulate that each rep should have 25 accounts, or should not travel more than 50 miles. You can specify how many territories you want, and maybe put more reps in the regions that your data indicates have more market potential. You could take into account how much each rep was costing you and assign the more expensive reps to accounts with more potential. You can also put restrictions on the model, giving a new rep 80 percent of the workload you would give your most experienced reps. Wizards generally guide you through this stage.

The third step is data analysis. The mapping programs process the information and then come back with a map that shows where the dividing lines of your territories should be to create equal sales opportunities for your hard-working reps. "The program does all the work for you," says Robert Reading, of Andover, Mass.-based Tactician, another territory mapping vendor. "It comes up with something no human could."

Larry Daniel, who has 15 years of experience as a consultant in the field, says that before automatic optimization programs, he used to slave all day to create balanced territories for companies with 35 reps and 800 accounts. "Working with spreadsheets, it is hard to get all the variables to balance at the same time," he says. "It's like that arcade game where you have to hit animals on the head with a hammer when they pop out of a hole. I'd beat one variable down, but another would pop up just as quickly." With today's tools, the job takes two minutes.

"Because it takes so little time to come up with balanced territories, I often say to myself, `Let's do it again,'" says Daniel. "I can come up with 10 to 20 permutations and I'm much more confident with the results."

Looking at the several solutions the software offers, you can then fine-tune the territories, moving accounts manually, finding the accounts you don't want to break away from a certain rep who has a long-standing relationship with them. "We anchor some accounts with a certain rep," says Daniel. "You usually don't want to throw all of them into the bag." Most mapping packages also let you produce graphs and tables that give you feedback on how well the territories are optimized.

Finally, there's presentation. Printing out maps once the alignment is finished allows you to visualize the territories more easily. You can export the maps to presentation software or save them in a database. You'll need to prepare copies of the territory maps for the sales force and sales management. Look for a map batch-printing feature in the software so that you can conveniently print each territory automatically.

And maybe soon you won't have to print out the maps or send the data on disks out to the field. Tactician will soon be coming out with a Web-based offering, TerrScape.com, which will let companies disseminate the new territory maps over the Internet to sales managers in the field. "The Internet solves the data, training and distribution challenges our customers were facing," says Reading. "Field staff will no longer have to come to headquarters to find out about new territory alignments. They will be able to view and fine-tune the territories through a browser, anytime they want."

What's the ROI? "Getting a return on this investment takes finesse," says Automated Wagering's Walters. But, reminds Jim Brown of Reston, Va.-based Metron, another territory mapping player, putting an additional rep in the field costs, on average, $100,000. "Avoiding being wrong by just one rep pays for the software. The payback for a quick, accurate optimization more than compensates for the cost of the software."

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