Veteran consultant shares data-driven methodology for sales departments
Dr. Jim Weber, veteran consultant in the farm and construction equipment industry, identifies territory assignment as a core tactical activity that increases wholegood sales. Rather than treating sales territories as geographical boundaries or a route for sales reps to drive around, Weber presents a mathematical approach to defining, segmenting and staffing territories based on market data, customer value and call capacity math.
“I don’t care if the territories are geographical. I don’t care how they are,” he says. “But we have to assign the territory. We have to have territories for these individuals.”
By replacing guesswork with real data, dealership leaders can transform sales reps from passive into proactive people who manage their assigned market potential.
The Trade Area Formula
The foundation of Weber’s territory model is built on calculating the market size within a dealership’s geographical boundaries. The manager must compute the geometric trade area, which is dictated by neighboring competitive locations.
Using a real-world scenario from a New Holland location in Wooster, Ohio, Weber demonstrates the trade area calculation step-by-step.
Before the calculation begins, Weber sees how far neighboring same-brand dealerships are from the location. In this scenario, the closest New Holland dealerships are 30 miles east, 25 miles west, 40 miles southwest, 35 miles southeast and 30 miles northwest. This totals 5 competing locations. Furthermore, it was assumed that 85% of the area is farmland, and the average size of farms in Wooster is 250 acres.
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