Route Visit Planning By Laurus Nobilis At Isnare.com Ezine Articles

The sales department has specific tasks to obtain in the market. Sales need to visit customers periodically, check the credit, generate order, follow up the deliveries of products, present the new product or promotion, merchandise products, negotiate a new position, handle a different complaints, etc. So many things in the same retail outlet. Now, imagine replication of all this in a large number of outlets.

The total universe of outlets that are target of some company, as well as the number of salesmen and sales managers, can be different from one company to another, depending on the industry branch. Also it can depend on company's strategy in the market. Still, every company in any industry branch will try to cover as much outlets with as less as possible employees.

It is very simple to explain this intention. More outlets you cover directly through your sales representatives, more sales you can expect. Although you can access the retail outlets indirectly, through wholesalers, still it is better to have direct contact to the market.

While the company is trying to cover as much customers as possible, it is also trying to engage optimal number of field representatives. Optimal means minimum required to achieve desired result.

We see that the point is to find the balanced approach between cost of employment, training and support to the number of sales representatives from one side and achievement of budgeted sales volume on the other side. This is a typical problem of the FMCG companies that sell a huge volume of a broad portfolio, which sells fast, through branched network of retailers, that are more or less dense distributed, throughout the geographical market area.

In such a situation it is important to have a proper sales route planning for the sales representatives. This is done through several steps:

1.) Assessing the market universe is the step of collecting data of all retail outlets in the given market. This survey involves basic data gathering, estimate of sales and potential, size of outlet, visit frequency of shoppers, etc.

2.) Once you have data of your sales universe, you classify outlets in ABC categories.

A – Large outlets with big volume and potential, positioned in urban areas. The number of these outlets is usually relatively small

B – Medium size and sales outlets, urban areas with potential of growth. Number of B outlets will be moderate

C – Small outlets, still worthwhile visiting. Probably there will be many outlets in this category

There will be some outlets that you might want to miss from your route planning. It is very difficult to cover all outlets in the market. In some branches, where there is the small number of outlets it may be possible. But for a FMCG company with thousands of outlets, it is more realistic to skip the lowest level of outlets from the route planning.

3.) Next step is setting of visit frequency for the outlet categories. Here you apply the Pareto principle. Since the most of company's sales comes from the relatively small number of outlets, they deserve the highest visit frequency. Therefore, model of visit frequency may look like:

A outlets – Weekly visits ( or even several times per week )

B outlets – Once in 2 weeks

C outlets – Once per month

4.) After classification of outlets and setting of visit frequency, it is necessary to calculate the average time spent in outlet for normal activity. On top of this you calculate other time, e.g. driving time, etc. Finally you have the number of people that you require for the best outlet universe coverage. Of course, this may be expensive, in case those sales representatives cannot directly justify their number and density in the market, through the increase of sales.

Therefore, you should start with minimal number of sales people. If their contribution to the business is justified, then the number of sales representatives can be increased gradually. It is the best to re-asses and plan sales force layout during the Annual Business Planning.

ABC Route Planning needs to be conducted gradually. Expansion of sales force should come in phases. Within each phase it is necessary to acquire incremental in sales, profit and market share, in order to justify the next step.

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