Derby
Management
Sales Force Size and Territory Alignment
Process
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1 CONSULTANTS
CONSULTANTS
Project Approach - Sales Force Size and
Structure
Sales Force Size and Structure
Sales
Immersion Geograph
Customer Base-case Response
and ic Sizing
Segmenta Coverage Estimatio
Database Optimizat
tion and Assumptio n and
Developme ion &
Valuation ns Sizing
nt Structure
Analysis
Understand Sales potential / Allocation of Links sales force
Incorporates
selling process market Effort investment to geography
Activities concentration Segments - resulting sales
Segments reach and and customer
frequency Calculate optimal location into
Workload drivers
$ Activities
sales force size sales force
Products
Product and size decision
market demand A&P
Total
Sales territory size
data constraints
Customers
Physician Forecasts travel costs
Sales force data segments
Market share
10 10 9
REN END REN Total
Volume Md Effort
Customer needs Specialty Contribution
Other
Competition
ART Centers
Key assumptions
Risk analysis Reps
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Alignment Objectives
A good realignment can accomplish the following...
•Better coverage of
Workload customers and
Balance prospects
•Higher customer
satisfaction
Potential •Fairer evaluation of
Balance salespeople Higher
•Improved morale
Sales
•More face-to-face
and
Travel
Efficiency selling time Profits
•Reduced costs
•Acceptance by
salespeople
Minimized •Acceptance by
Disruption customers
•Lower transition
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ZS Territory Alignment Methodology
Develop criteria that will be used to design territories and
Alignment Strategy measure workload and potential balance
Definition Develop and refine the national database used to align
territories
Identify geographic concentrations of workload and
Region and Territory potential as targets for new territories and areas of lower
concentrations as potential consolidations
Locations
Design regions to span of control guidelines
Incorporate local market knowledge into the
Refinement and territory design
DM Rollout
Obtain organizational buy-in to the new territory
alignment
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Effort Allocation to Segments
Step 1: Understanding current Step 2: Adjust raw effort allocations Step 3: By segment and decile,
effort based on call file to reflect call plan format refine visits / year based on input
from Sales team
Call file used to Reach is adjusted by
estimate reach and segment to capture the
frequency by segment highest value customrs
and decile
Effort to segments is
Frequency is adjusted to based on reach and
Calls translated into reflect a call plan format. frequency assumptions
hours based on Maximum frequency was set
estimated hours/”visit” at 45 visits/year and
minimum at 9 visits/year
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What is a Visit?
From the call file, Using interview One “call” in the call file is
determine average # feedback, split the “call actually a series of calls. To
of “calls” per day time” between direct prevent confusion, we refer
(outliers are removed) customers and to this as a VISIT.
“additional” targets
Interview data revealed that
there are 4 “additional” targets to
every RE. These are other
influencers.
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Visits & Calls per Day
Working days/year 204.0
Hours/day 8.0
Working hours/year 1,632.0
% Time Spent with Customers 70%
Hours with customers 1,142
Hours/Visit (includes travel time, wait time) 2.5
Visits/year 457.0
Visits/day 2.2
Total Calls/visit 5.0
Calls/day (total people seen) 11.2
Calls/year 2,284.8
Data collected from interviews, Sales team input and the call
file
Visits per day and calls per day are based on an average
territory and will vary based on territory geography and the
number of targets
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Sales force Sizing Analysis Feeds Territory
Alignment
Physician valuation and coverage strategy drives
territory balance criteria:
Assign
Assign Sales Assignment
customer
customer Target
Target
Sales
response Assignmentof of
value response physicians to
valuebased
based effort
effortper
per relationship physicians to
on account relationship territories
territoriesto
on account-- estimated to
concentrati coverage estimated balance total
balance total
concentrati coverage from
on fromeffort
effort workload
onof
of strategy
strategy allocations workload
potential allocations
potential
Deployment
Sizing analysis
Analysis
Goal:
Goal: Balance
Balancetotal
totalpotential
potentialadjusted
adjusted“workload”
“workload”across
acrossterritories
territoriestotoallow
allow
for
foroptimal
optimalcoverage
coverageof
oftarget
targetcustomers
customers. .
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Sizing Analysis - Sales Response
Marginal Revenue and LTDC - Primary 2000
$90
$80
$70
$60
$ (in MM)
$50 Revenue
$40 Cumul LTDC
$30
25% ROI @ 48 Terrs 0% ROI @ 54 Terrs * Revenue is 3-year
$20 discounted revenue
$10
$-
- 20 40 60 80 100
# Terrs
# Terrs Cumulative LTDC Incremental ROI Incremental Revenue
20 $ 40.32 387% $ 437,720
30 $ 45.70 171% $ 233,064
40 $ 48.39 105% $ 174,150
49.5 $ 49.47 17% $ 92,500
54 $ 49.52 1% $ 77,330
60 $ 49.43 -11% $ 63,895
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Territory Design Criteria
Potential-adjusted Workload
Target frequency of visits per year per customer
Potential
Non-retail sales
Territory Design Constraints
Span of control
Geographic contiguity
Disruption of current alignment
State border and MSA integrity
Workload
Workloadand
andpotential
potentialvariables
variablesare
arecombined
combinedinto
intoan
anINDEX,
INDEX,used
usedtoto
measure
measureoverall
overallterritory
territorybalance.
balance.
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Alignment Index
An index combines multiple criteria into a single measure to express
sales representative coverage needs.
The criteria for alignment are:
Target workload (# of visits) @ 90% weight
Non-retail sales @ 10% weight
— Serono Alignment Index Example—
Workload (Visits) Non-Retail Sales Index Points FTEs
Average Territory 476 55000
Territory A 430 75000
Terr A vs Avg terr 0.90 1.36
Weight 90% 10% 949 0.95
An average territory
Calculation: [(.90 *=90%)
1.0 +rep equivalents
(1.36 or =1,000 index
* 10%) * 1,000] 949 points
A “balanced” territory should be between 800 - 1,200 index points
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11 CONSULTANTS
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Territory Design Objectives
Balance workload and potential (target 800 - 1200 index
points)
Larger geographies require more travel time and can have lower
index value
Minimize Travel
More face-to-face selling time
Reduced costs
Minimize Disruption
Lower transition costs
Field acceptance
Incorporate sales force input
Regional Sales Director knowledge
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Current Alignment*
Index: 8,868 Northeast (10.5)
Mid -West (10)
Adds: 0 Deletes: 0 Index: 11,507
Adds: 1 (NY) Deletes: 0
Mid Atlantic (11)
Index: 10,156
West (8.5)
Adds: 0 Deletes: 1
Index: 8,382 (VA/NC)
Adds: 0 Deletes: 0
South (9)
Index: 8,716
* # of territories in ( ) Adds: 0 Deletes: 1 (Texas)
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Define Current Alignment Distribution
Current Alignment Territory Balance
2,000
1,800
1,600
Index Points
1,400
1,200
1,000
800
600
400
0 10 20 30 40 50
Territory
• 29 territories (60%) “out-of-range”*. 11 high and 18 low (excluding part-time)
* A target territory is between 800 - 1,200 index points
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2000 Region Re-Alignment*
Northeast (9 / -1.5)
Index: 10,060
Mid -West (10 / 0)
West (9.5 / 1)
Index: 9,958
Index: 9,373
Mid Atlantic (9.5/-1.5)
Index: 9,333
South (10.5 / 1.5)
Index: 10,276
* # of territories in ( ). First number is span of control,
second number is span change from Current alignment
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2000 Re-Alignment Distribution
2000 Territory Balance
1,600
1,400
Index Points
1,200
1,000
800
600
0 10 20 30 40 50
Territory
• 7 territories (14.5%) “out-of-range”*. 6 high and 1 low (excluding part-time territories)
* A target territory is between 800 - 1,200 index points.
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Disruption Report
Current Alignment New 2000 Alignment
Disruption was measured by matching the geography covered to it’s current rep and comparing that to the new rep
The geography was “disrupted” if the new rep in the geography was different from the current rep in the geography
Only the alignment induced geographic changes are considered in the disruption calculation (i.e. a rep change due to the
course of regular business was excluded from this analysis)
Non-retail sales were excluded form the total index points to calculate disruption (see next slide)
Total Disruption = 23.5%
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