Field Manager’s Guide 12/25/09

Chapter 12
How To Organize a Sales TerritoryOrganizing Sales Territories

Although selecting and targeting physicians effectively is a key to good sales within a
territory, a medical representative’s sales are also affected by how well he or she is able
to cover the areaterritory.

Well-structured territories and well-planned itineraries help your representatives

increase their productivity. Even if every visit results in sales in a poorly organized
territory, think of how much better a Rep representative could do if detailing calls were
organized efficiently. The benefits are:
• A well-planned schedule permits a representative Rep to cover the potentially high
prescribers better.
• The promotional costs and travel costs related to selling are reduced because the
schedule is more efficient.
• When follow-up visits are needed, an organized plan helps the representative Rep
avoid duplication of efforts.
• The morale and team spirit of the medical representatives are improved when the
sales potential and workload are balanced among territories.

Managers will also find that well-defined and organized territories make it easier to
evaluate a representative’s performance.

Structuring Territories
Ideally, territories should be divided according to their sales potential and problem
areas. You want to make sure that each Repevery one in your team has similar
opportunities for sales as well as problems.

It’s not easy to say that one territory has a high sales potential and another does not.

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You should consider the following characteristics carefully when comparing territories:
• The number of doctors.
• The prescribing potential of the doctors.
• The number of hospitals and their sizes.
• The number and importance of pharmacies and wholesalers.
• Traveling distances and travel time in rural areas.
• The amount of time a representative Rep would have to spend away from home.
• The amount of travel and other expenses you expect from the area.

You may have other points to add to this list, such as postal costs or factors affecting
communications. Of course, not all territories can be identical. One of the most basic
problems is the difference between urban and rural territories. One way around this
problem is to divide the urban and rural areas between two representatives so each has
a similar amount of traveling time and a similar number of doctors to visit in cities and
small towns.

In some cases, it may be necessary to discontinue visits to small towns that are too
remote and have too few doctors to make regular visits worthwhile. Special mailings or
telemarketing programs may be considered for reaching doctors in these remote or
difficult areas. Remember that small towns can grow into cities. A good network of
contacts established through these economical methods often pays off in long-term
sales.

Assigning Territories
No matter what you do, there are bound to be differences in territories. You should
carefully consider these differences and try to match your representatives with the
territories to make the best use of their skills and experience. Make your territory
assignments on the basis of:
• Capacity—The most capable representatives should be assigned to either the most

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important or the most difficult territories.

• Merit—Generally, the most desirable territories should be assigned to the most
deserving performers.
• Personality—In most cases, urban territories should be assigned to representatives
who feel happier in the city and identify better with city doctors, and rural territories
should be assigned to representatives who prefer the less-developed areas and
work better with country doctors.
• Residence—Whenever possible, territories should be assigned near a
representative’s home to reduce travel time and expenses.

Of course, you may not be able to satisfy all of these conditions in every territory. In
some cases, you may decide to assign an experienced medical representative to a
difficult territory or one far from home because his or her capabilities are required
elsewhere. In such cases, you should explain to the representative why this assignment
was made.

When To Change Territories

You should keep a representative in one territory long enough to establish good working
relations with the local doctors and make good use of these relations. However, medical
representatives may get stale if they remain in their territories too long. If a
representative experiences a loss in productivity or becomes ineffective, consider
changing his or her territory.

By rotating the representatives, the exposure to new territories obliges them to stay alert
and renew contacts. On the negative side, a change of territory could mean that the
representative will have to start all over again, getting to know each doctor, establishing
relationships with all clients in the new territory. The actual frequency of rotation is best
determined after considering the representative’s performance and any special factors
that affect the territory. You may find it more convenient logical to rotate representatives

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among territories at preset times and only in those territories where you feel your
current representatives are not exploiting the full potential of their territories. As a
general rule of thumb, assign champion representatives for champion (or highest
potential) territories!.

Shaping Territories
The shape of the territory should not be overlooked because it affects communications,
efficiency, and productivity of the entire sales team. As shown in the figures below,
territories can be arranged in a circular pattern around the Field Manager’s central
office, or as a wedge pattern that centers on the Field Manager’s office.

[FIGURE OF CIRCULAR PATTERN] [FIGURE OF WEDGE PATTERN]

Circular Pattern Wedge Pattern
Figure 1 Circular and Wedge Patterns for Territories

The Circular Pattern—In the circular pattern, each medical representative lives roughly
in the center of his or her territory and the Field Manager’s office is in the center of the
entire area.

Advantages of the circular pattern:

• The planning of sales calls is simplified.
• Travel time is minimized and the representatives can usually return to their own
homes in the evening.

Disadvantages of the circular pattern:

• Communications and meetings may be more difficult because only one of the
representatives lives near the Field Manager’s office.
• It is difficult to provide all of the representatives with a fair balance of urban and rural

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areas within their territories.

Because of these characteristics, the circular pattern is usually more appropriate when
all of the representative’s territories fall within a large urban area or cover a mostly rural
area.

The Wedge Pattern—In the wedge pattern, the Field Manager and representatives all
live close to each other in the center of the pattern.

Advantages of the wedge pattern:

• Communications, meetings, and performance follow-ups are simplified.
• The territories can be divided more fairly, providing each representative with a
balance of urban and rural areas to cover.

Disadvantages of the wedge pattern:

• The distances to the outer boundaries of the territories are greater, which requires
more travel time and overnight stays in hotels.
• The planning of itineraries for detailing calls may be more complicated because of
the distances involved.

If the distances and travel times are not too difficult, the wedge pattern is generally
better than the circular pattern because it makes communications and close contact of
the sales team easier. The wedge pattern is also very effective if it is centered in a
metropolitan area surrounded by rural areas, which provides a more equal balance of
territories for all representatives.

It is possible that neither of these territory designs are appropriate for your
representatives or their territories, so you may have to modify these basic patterns. As a
rule, you should try to maximize communications, minimize travel time, and keep a fair

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balance between territories.

To keep the territories efficient and productive, they should be reviewed and—if
necessary—revised on a regular basis. Changes in the community’s economic make-
up, the number of doctors and patients. the doctors’ prescribing potential, and
transportation routes should not be ignored because they affect the representative’s
overall performance.

You should also encourage your representatives to be actively involved in the revision
of their territories in order to take advantage of their knowledge and experience. When
representatives participate in the modification of their own territories, they are less likely
to resist change and will be more motivated to work their modified territories with greater
enthusiasm.

Planning Itineraries
Each medical representative has the responsibility to know his or her territory
thoroughly. This involves knowing:
• The location of all doctors, hospitals, pharmacies, and wholesalers.
• The relative importance of all clients, i.e., How many Aas, As and Bs
• The best routes to take.
• What sequence to follow in the coverage of target clients.

By developing carefully planned itineraries, detailing visits can be scheduled along the
most efficient routes within the territory to minimize the expense and time spent
traveling.

In rural areas, itineraries should be planned with the following points in mind:
• Arrive in each town so there is time to see all of the doctors and clients on the call
sheet.

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• When possible, travel should be arranged during nonproductive hours.

• Choose the most effective route to each town and minimize travel time.

The frequency of each trip should be determined according to its level of importance.
For example, if most of the doctors on a particular trip have low prescription potential,
then the trip should probably be scheduled only once every two cycles.

In urban areas, physical distances are less of a problem than traffic and parking
difficulties. Itineraries should be planned to:
• Visit doctors in the same neighborhood or suburban area.
• When possible, visit groups of doctors on foot to reduce time spent in traffic and
parking problems.
• Schedule visits for the days and times when the doctors usually receive medical
representatives.

Comparing Territories and Uncovering New Business Potential

In the previous chapter, we presented a checklist for the selection and targeting of
doctors. The results of that grading scale can be used in the following checklist to
analyze the territories within regional sales areas. By comparing the monthly sales,
prescription potentials of the doctors visited, number of visits, travel and waiting times,
and other travel-related factors, you can evaluate the productivity and potential of each
territory. and work with the representatives in planning new itineraries and any needed
modifications of their territories. You also need to work with your representative to get a
“real feel” of the territory’s potential. You need to find out how many doctors have
actually been classified. It may happen that there are indeed more important important
doctors in the territory but for some reason, they have not been included in the list. In
your visits to pharmacies, try to find out which are the leading competitive products in
the therapeutic segments that interest you. And then ask who are the doctors
prescribing the leading product. You may be surprised to find out that many of these

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are not included in your medical representative’s list!

Figure 2 Monthly Territory Comparison Checklist

Doctors/Cycle Visits/Day* Waiting/ Travel/ Distance/ Nights Degree of

Day Day Cycle Away Difficulty†
Territory Monthl A B C D Total H P D Total
y
Quota
#1 90 60 18 12 180 1 1 7 9 1.0 hr l.75 hr 240 km 1 2
#2 150 85 15 10 260 2 2 9 13 0.75 hr l.25 hr 220 km 0 1
#3 54 26 38 22 140 1 1 5 7 l.5 hr 3.25 hr 675 km 3 3
#4 40 42 30 28 140 1 2 4 7 2.5 hr 4.O hr 92O km 9 4
Note to Bill,
Please add 2 more columns here to indicate that the minimum of representatives that a
FM supervises should be no less than 6. Otherwise, it becomes too top heavy!
H =Hospitals, P = Pharmacies, D = Doctors.
1 =Easy, many good contacts with relatively little travel or waiting.
2 =Moderately difficult, with good contacts hut some travel and waiting.
3 =Difficult, mixed prescription potential and more travel and waiting.
4 =Very difficult, with poor prescription potential, few contacts, and/or extensive travel,
waiting, and overnight stays.
[END]