The 2004 ISMS Practice Prize Winner—Sales Territory Design: Thirty Years of Modeling and Implementation

Abstract

S ales territory alignment is the assignment of accounts and their associated selling activities to salespeople and teams. Models, systems, processes, and wisdom have evolved over 1,500 project implementations for 500 companies with 500,000 sales territories.Optimization models have evolved over time to explicitly consider travel time along road networks and customer disruption. Personal computers with continually increasing speeds and storage capabilities, the Internet, and mapping databases have enabled the development of systems that communicate alignments visually to sales managers. Because of their combinatorial complexity, multiple conflicting objectives, and personnel aspects that touch everyone in the salesforce, the alignment models were unable to completely solve the sales territory alignment issues faced by companies. Consequently, processes that add local managerial knowledge were used to communicate and enhance model-derived solutions, while achieving very high implementation rates.The territory alignment team gains knowledge with every sales territory alignment. Alignment insights get codified. Alignment experts improve every model-derived solution. This wisdom becomes part of subsequent alignments and triggers further innovation. Over time, the role of processes and wisdom becomes larger than the role of the models and systems.

The curvilinear and conditional effects of product line breadth on salesperson performance, role stress, and job satisfaction

“…Most of the current literature related to sales force and product decisions involves new product issues rather than product line breadth (e.g., Ahearne et al 2010;Atuahene-Gima 1997;Hultink and Atuahene-Gima 2000;Parthasarathy and Sohi 1997;Wieseke et al 2008). Further, literature related to sales force organization has focused primarily on structuring the sales force (Rangaswamy et al 1990), optimizing territory structure and alignment (see Zoltners and Sinha 2005 for a review), allocating sales effort (Davis and Farley 1971;Lodish 1980;Montgomery et al 1971), sharing the sales force among multiple product divisions (Sohi et al 1996), and designing compensation plans for multiproduct sales forces (Mantrala et al 1994).…”

Editorial: Errors in the Variables, Unobserved Heterogeneity, and Other Ways of Hiding Statistical Error

“…There are some theories that predict causal relationships. For example, Zoltners and Sinha (2005) argue that poor territory alignment causes undesirable variation in incentive payouts, making compensation plans appear wrong. Dubé and Manchanda (2005) argue that lower media availability in smaller markets causes more competitive advertising (share stealing) than in larger markets where high media availability causes complementarity (category advertising).…”

A novel model for arc territory design: promoting Eulerian districts

“…It should be noted that node-and edge-base districting models have different mathematical structure and therefore algorithms and methods developed for nodebased districting models are not quite applicable to edge-based models. For excellent surveys on node-based districting the reader is referred to the works of Kalcsics et al [10], Zoltners and Sinha [23], Duque et al [6], and Ricca et al [19]. Here, we highlight the most relevant work on edge/arc-based districting models.…”