SFA BASICS
How to increase sales territory coverage within the same budget?
How to increase sales territory coverage by trade representatives and merchandisers within the same budget?
Traditionally routes for the field force is prepared manually, which takes 30% of supervisors' or territory managers' time. Resulted routes are not that efficient as they could be as a lot of parameters are not taken into account and therefore field force resources are not used optimally. Let's take a deep dive into how to increase productivity of personnel and increase trade points coverage area.
Traditionally routes for the field force is prepared manually, which takes 30% of supervisors' or territory managers' time. Resulted routes are not that efficient as they could be as a lot of parameters are not taken into account and therefore field force resources are not used optimally. Let's take a deep dive into how to increase productivity of personnel and increase trade points coverage area.
How to increase sales territory coverage by trade representatives and merchandisers within the same budget?
Traditionally routes for the field force is prepared manually, which takes 30% of supervisors' or territory managers' time. Resulted routes are not that efficient as they could be as a lot of parameters are not taken into account and therefore field force resources are not used optimally. Let's take a deep dive into how to increase productivity of personnel and increase trade points coverage area.
What does routing mean in work of trade agents and what are its goals?
Routing – is the compilation of the route of a field employee for high-quality coverage of the territory.
Routing efficiency affects the number of outlets visited, the breadth of coverage, and financial costs.
Routing key goals:
Main goal of routing:
When we reach desired Travel time we can also:
Traditionally routes for the field force is prepared manually, which takes 30% of supervisors' or territory managers' time. Resulted routes are not that efficient as they could be as a lot of parameters are not taken into account and therefore field force resources are not used optimally. Let's take a deep dive into how to increase productivity of personnel and increase trade points coverage area.
What does routing mean in work of trade agents and what are its goals?
Routing – is the compilation of the route of a field employee for high-quality coverage of the territory.
Routing efficiency affects the number of outlets visited, the breadth of coverage, and financial costs.
Routing key goals:
Main goal of routing:
- Reduce travel time between route points and increase working time in store. E.g. before routing travel time was 26% and it was lowered to only 18% after optimizations.
When we reach desired Travel time we can also:
- Increase outlet coverage. For example, earlier with Travel time of 26% we worked in 2300 outlets, and when travel time was reduced to 18% we could also add another 120 points of sale.
- Increase the frequency and time of visits, improve service. The time that used to be travel time before can be invested directly in more time within the outlet, such as spending an extra 10 minutes expanding the brand's share of the shelf, or visiting the outlet more frequently.
- Reduce the budget for merchandising or sales agents. By optimizing travel time, you can keep the same number of outlets in service as before, but at the same time reduce the number of FTE (full time employee), and hence the salary and other social contributions.
How is trading team routing implemented now?
Approximately 70% of companies that have merchandisers, sales representatives and other field agents create routes manually using Google Maps and other similar services. This approach has a number of disadvantages:
Approximately 70% of companies that have merchandisers, sales representatives and other field agents create routes manually using Google Maps and other similar services. This approach has a number of disadvantages:
- Lack of professional routing tools. When a specialist uses a Google map, he manually draws points, approximately measures the distance between them and tries to tie up the nearest ones together. At the same time, there is no way to correctly measure the distance, quickly switch between modes of transportation - walking, public transport or car, to see complex crossings and traffic restrictions.
- Lack of a holistic view of all territories. When a supervisor makes a route for his own team only, he does not take into account the routes of his colleague's team, they do not see if their territories intersect.
- There is no interest in increasing efficiency and saving the budget. Few supervisors want to make a route with a large number of points for the same salary or reduce the number of merchandisers under his supervision. The supervisor hardly thinks like a business owner.
- Supervisors and managers are busy with operations support processes instead of solving basic and strategic tasks. The main task of the supervisor is to manage the team and sales, work "in the fields", but he has to spend up to 30% of his working time per month on routing.
- There are no tools to measure effectiveness. Managers cannot understand whether the workload is evenly distributed, whether the number of merchandisers is optimal, whether it is possible to reduce the travel time, and what time will be optimal.
- You have to hire a team of highly specialized experts with the necessary experience.
- Uneven workload of routing engineers. Global routing most often occurs twice a year, the rest of the time only slight changes are needed, so people workload occurs in waves. For example, before the start of the summer season, in April, a beer manufacturer needs to reroute the entire country so that in May merchandisers start working on the new routes. To build such routes quickly, you need a staff of about 15 engineers. In April, the load will be full, but then until September, when rerouting is required again, only slight changes will be enough, and the load will decrease by about 70%. But experts will still have to be kept in the state.
- The cost of purchasing professional software, which will require serious investments, the work of lawyers, buyers, IT specialists, will increase the load on the server infrastructure and its cost, and so on.
Key Performance Indicators of Sales Agent Routes
Travel time and Service time - the ratio of travel time between outlets to the time actually spent working at the outlet with the shelf or the store manager.
The number of sales agents and the number of outlets - shows the load on the sales staff. When looking at the whole territory, you can see points that are nearby and should bring additional sales when covered.
Coverage (%) is the ratio of covered outlets to the total customer base in both outlets amount and sales amount. In this case, it all depends on resources (number of FTEs), but routing allows you to use saved every minute and turn it into a visit to a new outlet.
Travel time and Service time - the ratio of travel time between outlets to the time actually spent working at the outlet with the shelf or the store manager.
- Good values are 10% of travel time and 90% of service time.
The number of sales agents and the number of outlets - shows the load on the sales staff. When looking at the whole territory, you can see points that are nearby and should bring additional sales when covered.
- For example, this ratio for merchandisers is on average 10 stores per person.
Coverage (%) is the ratio of covered outlets to the total customer base in both outlets amount and sales amount. In this case, it all depends on resources (number of FTEs), but routing allows you to use saved every minute and turn it into a visit to a new outlet.
Routing as a service
Taking into account the shortcomings indicated above (link), we at Key2Work launched a routing service 3 years ago. It has 5 main steps:
1. Briefing - identification of current problems with routes, collection of feedback from the management team, as well as the definition of routing goals.
2. Current routes audit:
Taking into account the shortcomings indicated above (link), we at Key2Work launched a routing service 3 years ago. It has 5 main steps:
1. Briefing - identification of current problems with routes, collection of feedback from the management team, as well as the definition of routing goals.
2. Current routes audit:
- Ratio of indicators Travel time / Service time
- Ratio of indicators of the number of routes and retail outlets / number of merchandisers (Full time employee)
- Automatic allocation to plots and territories
- Search for issues on the route: railroad tracks, bridges, roads or lack of passage
- Check the availability of public transport
- Check the route by a routing engineer for load within each working day and building the most efficient sequence from the first to the last outlet
- Reduce labor costs and compensation for traveling by private car or public transport
- Leveling the load on the route to 100%
Case 1.
Goal: Reduce travel time between trade points and reduce the number of merchandisers
Client: Large manufacturer of household chemicals
Goal: Reduce merchandisers travel time between trade points.
Before: Trade point coverage was 3000 points and 80 routes. Travel time was 26%.
After: After Key2Work created new routes travel time was decreased to 18%, route amount to 72.5 but the amount of trade points remained the same.
Result: Every month the manufacturer saves 9.5% of his personnel budget due to routing.
Goal: Reduce travel time between trade points and reduce the number of merchandisers
Client: Large manufacturer of household chemicals
Goal: Reduce merchandisers travel time between trade points.
Before: Trade point coverage was 3000 points and 80 routes. Travel time was 26%.
After: After Key2Work created new routes travel time was decreased to 18%, route amount to 72.5 but the amount of trade points remained the same.
Result: Every month the manufacturer saves 9.5% of his personnel budget due to routing.
Case 2
Goal: Increase sales points coverage on the territory
Client: Manufacturer of hygiene products
Before: 3500 trade points that were serviced by 96 employees, travel time was 25%.
After: As a result travel time decreased to 19%, amount of employees remained the same.
Result: Coverage increased by 420 trade points, 12%.
Goal: Increase sales points coverage on the territory
Client: Manufacturer of hygiene products
Before: 3500 trade points that were serviced by 96 employees, travel time was 25%.
After: As a result travel time decreased to 19%, amount of employees remained the same.
Result: Coverage increased by 420 trade points, 12%.
Case 3:
Goal: Increase frequency and visit time, increase service in the trade point.
Client: Major confectionary manufacturer
Before: Before trade agents visited some trade points 5 times a week and others 2 or 3 times a week, Travel time was 13%.
After: travel time decreased by 7% , and visit amount increased by 17%. Trade points that used to be visited 2 times started to be visited 3 times, and those that've been visited 3 times a week started to be visited 5 times a week. Saved budget was reinvested into the frequency of trade point visits.
Result: Increased quality of work in trade point
Goal: Increase frequency and visit time, increase service in the trade point.
Client: Major confectionary manufacturer
Before: Before trade agents visited some trade points 5 times a week and others 2 or 3 times a week, Travel time was 13%.
After: travel time decreased by 7% , and visit amount increased by 17%. Trade points that used to be visited 2 times started to be visited 3 times, and those that've been visited 3 times a week started to be visited 5 times a week. Saved budget was reinvested into the frequency of trade point visits.
Result: Increased quality of work in trade point
Let it start...
