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1 Optimize Your Territories - Increase Sales by 15% Grow Sales Through Territory Optimization KEY BENEFITS Better customer coverage and customer service lead to increased productivity and revenue Call prioritization by account potential increases sales Shorter travel times and associated travel expenses reduce costs Equitable distribution of accounts and a level playing field for achievement improve morale, performance and sales person tenure The ability to identify and address new opportunities faster than competition provides competitive advantage AlignOps Territory Manager takes Territory Optimization beyond simple visualization and map rendering. The ability of AlignOps to process extremely large volumes of territory, opportunity and customer related data from your existing systems, and to publish balanced, efficient territories and actionable information to the field through a web-enabled user interface is invaluable to every player in sales and marketing. With AlignOps, the organization can move from onerous annual territory realignments to a continuous, agile territory optimization cycle that is responsive to the changing needs of the business. Territory Optimization AlignOps provides the industry s leading solution for territory optimization - one specifically designed to support and facilitate both the PROCESS as well as the organizational WORKFLOW required for effective optimization. AlignOps territory optimization solution automatically creates lowest cost, high performance territory alignments based on factors such as workload and travel time. The AlignOps approach delivers balanced, compact, contiguous and efficient territories that help account executives drive less and spend more face to face time with customers and prospects. The creation of the geocentric business intelligence so vital to both day to day activities and strategic initiatives is heavily dependent upon AlignOps ability to quickly process very large volumes of data. AlignOps territory optimization solution gives sales organizations the information needed to determine which customers and accounts to focus on, and how much time and effort to spend on each. w w w. A l i g n O p s. c o m f o r m o r e i n f o r m a t i o n o r c a l l : Territory map with Account Executive assignments
2 The Nine Steps of Territory Optimization AlignOps recommends that a territory optimization initiative take the following logical and sequential steps: 1. Determine Market Potential and Market Share 2. Prepare historical sales data 3. Plot and locate all geo-centric data 4. Create initial territory maps 5. Create Territory Optimization 6. Align the Optimized Territories 7. Disburse to field; gain acceptance and approval 8. Use maps and data for day to day call planning and account focus 9. Continuously monitor and collect data for ongoing optimization and information updates The following is a description of each step in the process. 1. Determine Market Potential and/or Market Share There are many sources of data for market potential and/or market share analysis. Thematic mapping will quickly show where market potential is, where markets are over-saturated and/or where there is little or no market. Understanding the lay of the land is the first step in creating geo-centric business intelligence.
3 2. Prepare Historical Sales Data Gathering and consolidating sales data by account, territory and account executive is an important and revealing step in the optimization process. During this step, organizations quickly gain an understanding of relative sales volumes and thus the importance of each account. Data cleansing may be a necessary precursor to this step. At this step in the process a ranking of accounts helps sales management allocate revenue according to the 80/20 rule, that is: 80% of business is generally found to come from 20% of the customer base. Analyzing sources of revenue according to the 80/20 rule helps management determine if the right accounts are generating the bulk of revenues, or conversely that certain accounts with great potential need more focus to move them into the top 20% of revenue generators. Mapping is not required for this analysis and many companies find this to be a very useful exercise. Sales management can use this data to drive the subsequent optimization process, and demonstrate to account executives that they need to spend time with customers that are generating revenue, and with potential customers that can generate revenue. Sharing this data with the account executives involves them in the optimization process and prepares them for upcoming change. It prepares the account executives to embrace change and understand that increasing sales will increase variable compensation. All will see that the objective of the optimization exercise is not to take away accounts, but rather to distribute opportunity such that account executives are spending less time on the road, and more time in front of customers. This step begins the process of positive, proactive behavior modification. Enlightened account executives will appreciate the data and will adjust their sales efforts. Later on in the process, seeing the location of key accounts will help reps plan calling efforts. Create data-based maps with up to 1000 layers of information NOTE: Optimizations generated using existing sales volumes (only) will not be as effective as optimizations that take into consideration the confluence of sales potential and existing sales volumes. Sales territories are often created using sales history alone thus weighting efforts toward historical results as opposed to marketplace potential. A weighted optimization can provide a formula that will solve this issue with a balancing variable that allows potential to influence the optimization and reward new business efforts. Companies that use this approach can achieve a 15% increase in sales.
4 3. Plot and locate all geo-centric data At this step we introduce point data. This is data that has a geographic reference point that can be pinpointed on a map. The Territory Optimizer has a geo-coding capability that can plot point data on a map. Point data types required for Territory Optimization may be addresses and/or locations of: Account Executives, sales offices, distributors, customers, competitors, projects, stores, etc. Many times, a plotted map, layered upon a thematic representation of sales potential, will provide a geographic Aha. For example: sales offices located too closely together, distribution centers too far from customers, or a competitor being geographically closer to key customers or prospects. Thematic map with rep location and territory boundaries
5 4. Create Initial Territory Maps Steps one through three are the Lay of the Land steps necessary to begin the optimization process. The final step in lay of the land process generates the geo-graphic boundaries of existing territories. At this point you will quickly see if territories are compact and contiguous, you will also see if they are balanced with respect to opportunity. Note the Alignment Chart at the bottom. It immediately gives us a sense for territory balance. Your sales territories should look like this: NOT like this: Map with unassigned zip codes- therefore no sales coverage
6 Aligning territories can yield a 2-15% increase in sales efficiency and a proportionate increase in sales. Many companies use the results to help sell the new optimization process and gain buy-in from the organization. It is easy to show account executives and sales managers value by graphically illustrating territory inefficiencies (i.e. non-continuous, non-contiguous, overlapping, unbalanced, etc.). It is also likely the organization will see unassigned point or polygon zip codes as the Post Office adds new zip codes on an ongoing basis. Steps one through four provide insight into the lay of the land. The visual representation gives a good baseline of what is, and lays the groundwork for the process of what can be. However, while plotting initial territories gives insight to holes in coverage, it does not benefit from new layers of geographic information such as highways and road networks, geographical points of interest, and obstacles such as lakes and rivers. Imagine a rep driving 30 miles to cross a river and then driving 30 minutes down the river to call on a customer that as the bird flies was just 200 yards away. Only through consideration of this overlying data can true optimization be performed. Lay of the land example with account locations, road network and other geographic references
7 5. Optimize Territories As stated in the previous section, a simple territory alignment does not take into account road network and other topographical information on territory efficiency. Giving account executives the right boundaries, an understanding of customer and prospect locations, and the ability to efficiently group sales calls results in reduced drive times and the ability to make that one extra call a day. Sales naturally increase as a result. Yet even with the above, the true value of territory optimization hasn t been realized. The true value of optimization lies in creating compact and contiguous territories with equal potential or workload that results in all reps delivering equal or optimal results! There are a myriad of benefits that derive from a full Territory optimization. Shown here: Territories Before Optimization Avg. Deviation: 40.7% Avg. Distance: miles Shown here: Territories After Optimization Avg. Deviation: 1.3% (97% improvement) Avg. Distance: 46.3 miles (67% improvement) The power of what-if analysis and the use of data to build balanced territories gives analysts the ability to create and present multiple scenarios to management. The ability to share maps and data becomes an important part of the process. While optimization will generate optimized territories (and can include variables, weightings, floating, parent/child relationships etc) the process needs to be balanced by practical considerations such as accounts with long term relationships and contractual obligations. These considerations can be input as boundary conditions prior to executing the optimization. Input from field management will be an important part of an optimization. Easy access to visualizations and data allows field managers to revise based upon practical considerations.
8 6. Fine Tune (Align) the Optimized Territories The Territory Optimizer s algorithm yields territories that are balanced, compact, contiguous and drive time efficient. However, optimization is a mathematical process and there are practical considerations the process cannot take into account; considerations such as account disruption and account ownership (e.g. contractually assigned distributorships). In these cases, management decisions serve as input (i.e. boundary conditions) prior to the optimization process. AlignOps ability to take the optimization process online through a powerful web interface suitable for all audiences gives the broader organization including field sales management the opportunity to fine tune optimization results to minimize undesirable disruption and to positively affect behavior. This field input also gives sales management visual power of persuasion and the ability to sell the results of the optimization process down the reporting chain. Account Executives and other field players come to see the optimization and alignment process as one that increases their efficiency and earning power. Initial territory optimization results with edit control panel to allow for fine tuning
9 7. Disburse to field and gain acceptance and approval Selling the results of Territory Optimization is an important part of the process. A new set of maps and data that help account executives become more efficient has to be sold down the chain. Once field managers and field reps understand that optimization provides tools to positively affect earnings, buy-in from the sales organization is swift. Maps and data are disbursed to field management and account executives
10 8. Use maps and data for day to day call planning and account focus Mapping is becoming ubiquitous. Applications including call routing are familiar to all sales reps. Each sales rep s territory is presented along with important location (i.e. customer, project, store, etc.) information.. Map of hospitals with thematic ranking by size and account information Routing map with planned calls
11 9. Continuously monitor and begin data collection for next optimization Companies that successfully employ Territory Optimization look forward to the next optimization. Fast moving companies in fast moving industries often change territories after quarterly results. AlignOps Territory Optimization solution gives sales operations and sales management the tools to make the next optimization an opportunity to increase sales, rather than a dreaded clerical task.. The ability to manage data by sales territory allows for use of territory-based data to be used in portals and dashboards The change in focus from simple rendering on a map to sales performance management effectively changes the lay of the land. Sales management that effectively leverages the territory optimization process will soon begin to see increases in field sales efficiency. Accounts that needed more attention will begin to generate more sales. Reps focusing on the 80/20 rule will soon realize they have too many accounts and will focus on their top 20%, asking management to re-assign accounts that are too far away. Adding new reps now becomes a welcome event, rather than a perceived loss. NOTE: Integrating a Territory Optimization solution to CRM and Incentive Compensation packages makes it easy to reassign accounts. In the past companies were less likely to optimize because it took too long and there was little backend system support. AlignOps integration capabilities take away that hurdle and allow for more frequent optimization exercises. AlignOps Territory Manager Online gives sales management easy access to maps and the associated data contributing to more efficient and effective optimization processes.
12 About AlignOps For over 20 years, the AlignOps team has been a premier provider of Optimization Solutions and Services. With employees across the globe, we combine business understanding and technology expertise with worldwide delivery. AlignOps provides a range of high quality consulting and software solutions to Fortune 1000 companies and other large organizations. We deliver our solutions through teams of professionals offering the industry experience, project management skills and technical expertise to identify and effectively address a particular client's needs in relation to its business objectives. Please contact us at: AlignOps LLC 1 Branch Street, Suite 204 Methuen, MA Phone: Fax: Territory.Performance@AlignOps.com.
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