Sales Force Size and Territory Alignment Process

1
Derby Management

• Sales Force Size and Territory Alignment Process

2
Project Approach - Sales Force Size and Structure

• Sales Force Size and Structure

Immersion and Database Development
Sales Response Estimation and Sizing Analysis
Customer Segmentation and Valuation
Base-case Coverage Assumptions
Geographic Sizing Optimization Structure

• Sales potential / market concentration
• Physician segments
• Volume
• Specialty
• Other
• ART Centers

• Allocation of Effort
• Segments - reach and frequency
• Activities
• Products
• AP
• Forecasts
• Market share

• Understand selling process
• Activities
• Segments
• Workload drivers
• Product and market demand data
• Sales force data
• Customer needs
• Competition
• Key assumptions

• Links sales force investment to resulting sales
• Calculate optimal sales force size
• Risk analysis

• Incorporates geography and customer location into
  sales force size decision
• territory size constraints
• travel costs

Customers
3
Alignment Objectives
A good realignment can accomplish the following...

• Better coverage of customers and prospects
• Higher customer satisfaction

Workload Balance

• Higher Sales and Profits

• Fairer evaluation of salespeople
• Improved morale

Potential Balance

• More face-to-face selling time
• Reduced costs

Travel Efficiency

• Acceptance by salespeople
• Acceptance by customers
• Lower transition costs

Minimized Disruption
4
ZS Territory Alignment Methodology

• Develop criteria that will be used to design
  territories and measure workload and potential
  balance
• Develop and refine the national database used to
  align territories

Alignment Strategy Definition

• Identify geographic concentrations of workload
  and potential as targets for new territories and
  areas of lower concentrations as potential
  consolidations
• Design regions to span of control guidelines

Region and Territory Locations
Refinement and DM Rollout

• Incorporate local market knowledge into the
  territory design
• Obtain organizational buy-in to the new territory
  alignment

5
Effort Allocation to Segments
Step 1 Understanding current effort based on
call file
Step 3 By segment and decile, refine visits /
year based on input from Sales team
Step 2 Adjust raw effort allocations to reflect
call plan format
Call file used to estimate reach and frequency by
segment and decile
6
What is a Visit?
7
Visits Calls per Day

• 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

8
Sales force Sizing Analysis Feeds Territory
Alignment

• Physician valuation and coverage strategy drives
  territory balance criteria

Assignment of physicians to territories to
balance total workload
Assign customer value based on concentration of
potential
Target effort per account - coverage strategy
Sales response relationship estimated from effort
allocations
Sizing analysis
Deployment Analysis
Goal Balance total potential adjusted
workload across territories to allow for
optimal coverage of target customers .
9
Sizing Analysis - Sales Response
Revenue is 3-year discounted revenue
25 ROI _at_ 48 Terrs
0 ROI _at_ 54 Terrs
10
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 and potential variables are combined
into an INDEX, used to measure overall territory
balance.
11
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) _at_ 90 weight
• Non-retail sales _at_ 10 weight
• An average territory 1.0 rep equivalents or
  1,000 index points
• A balanced territory should be between 800 -
  1,200 index points

Serono Alignment Index Example
12
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

13
Current Alignment
Northeast (10.5)
Index 8,868 Adds 0 Deletes 0
Mid -West (10)
Index 11,507 Adds 1 (NY) Deletes 0
Mid Atlantic (11)
Index 10,156 Adds 0 Deletes 1
(VA/NC)
West (8.5)
Index 8,382 Adds 0 Deletes 0
South (9)
Index 8,716 Adds 0 Deletes 1 (Texas)
of territories in ( )
14
Define Current Alignment Distribution

• 29 territories (60) out-of-range. 11 high
  and 18 low (excluding part-time)
• A target territory is between 800 - 1,200
  index points

15
2000 Region Re-Alignment
Northeast (9 / -1.5) Index 10,060
Mid -West (10 / 0) Index 9,958
West (9.5 / 1) 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
16
2000 Re-Alignment Distribution
2000 Territory Balance
1,600
1,400
1,200
Index Points
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.

17
Disruption Report

• Disruption was measured by matching the geography
  covered to its 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