Optimizing Territory Management

One of the biggest challenges that service managers face is that of territory management. This task is challenging because there is no standard pattern that will fit every dealer. The service manager has to balance a variety of factors to achieve optimum results.

Territory Management is a Necessity

In discussing this concept with dealers, most find that while they have territories, they need to improve their results. For the dealers thinking they don’t need to develop territories, I would recommend reconsidering that position. If you don’t, you will never achieve the optimum results you could with properly designed territories.

I have heard service managers express concern with technicians developing a strong relationship with a customer and the potential risk that a technician will take customers with them when they leave. I will counter that a good technician-client relationship helps cement the client to the dealership. If properly nourished, the technician-client relationship can lead to additional sales opportunities.

I remember having a discussion with a field supervisor at the time about the need for proper territory management. He explained that in his days as a technician, he would see technicians heading the opposite direction of the road he was traveling. Because of a first available dispatch philosophy, the technicians spent most of their day staring out the windshield instead of fixing the customers’ equipment.

When I owned a dealership in El Paso, TX with two technicians, each one had a territory. Size doesn’t matter when it comes to managing territories. Having them assigned to territories still reduced the technician’s travel time significantly and improved our response time.

Goals of Territory Management

The goal is to apply available resources in the most cost effective manner while achieving optimum customer satisfaction. This may sound complicated, but we are going to break it down to identify more clearly how you can do that.

The available resources include your technicians, your parts, and your vehicles or mileage. Optimizing one of these often times will have a negative impact on one or more of the others.

For example, if a technician’s territory has multiple vendors and models, the choice becomes to increase car stock or expect higher Hold for Parts (HP) calls. Restricting a technician’s territory to a single model would decrease car stock, but probably increase travel time.

Our goal then is to balance all of these factors in a way that generates the best outcome. We will look at how you might approach this.

Organizational Options

We are going to look at some of the ways that you can organize technicians, looking for the effect each will have on your department. Each of the options has both positive and negative effects depending on your territory.

We will also keep in mind that each territory has to be created in a way that acknowledges the technician’s limitation on how many copiers he can support, how much car stock his vehicle can hold and how much training you are willing to provide.

By manufacturer

For dealerships with a reasonably compact geographic area, this is probably the first choice. By dividing the technical staff into teams that support one product line, training is simplified since they only need to train on a single product line. This allows them to develop more expertise and become more efficient.

By segment

For this to be truly effective, the territory needs to be compact geographically. If the territory is compact enough, you may be able to arrange the territory by both manufacturer and by segment. This allows the most effective use of parts and training. This method will also generate the highest possible proficiency in the technicians since they work on fewer models.

For dealers where it is not possible to align the territories based on model and segment, aligning them based on segment is another choice. One good example is separating out production print into a separate territory. In most cases, the clients will have certain common workflows, similar expectations and similar issues. While increasing the car stock and training requirements, the technician’s skill set may improve, or at least be maintained because he spends his day in the production environment.

By geography

One of the most common ways for dealers to organize territories is by geography. This is especially necessary where a dealership has territories that include significant rural areas. In many cases this may be the only option for some areas. This method though requires the most training and the most car stock items, while reducing the travel time component.

For most dealerships, a combination of all of these options will be required to achieve the optimum results.

Tools to Help

There are several options when it comes to tools for arranging territories. The simplest is your existing service software and Excel. If you can extract the following information for each client and import it into Excel, you can then use the features of Excel to sort and group the equipment:

With the data loaded, you can start to use the sort and filter tools to try and find a logical method to group your equipment. If you divide the number of copies per month under contract by the number of technicians, that gives you the average monthly volume per technician. Using that number you could sort your machines by manufacturer, then by zip. Using that data, it becomes easy to group zip codes together to make territories with the approximate average monthly volume per tech in each territory. By changing your sort method, you base your territories on the criteria that are important to you.

BEI Services also has a territory mapping tool, and it provides a much more automated process. Some of the other consultants in our industry provide similar services.

What’s Next

Once you have a tentative territory map with technicians assigned to their prospective territory, the next step is to review their car stock to make sure it matches the equipment in their assigned territory. It may be helpful to go back to the spreadsheet and look at the monthly click volume by model in each territory to determine the initial car stock levels for their parts.

If you divide the monthly volume by model in a territory by the average yield of the parts in the car stock, you will have a good initial starting point. As you monitor the parts causing an HP call you can then adjust the value up or down.

With this tentative territory map you can also review each technician’s training to make sure that it matches the assigned models.

An Ongoing Process

Once you have completed the initial territory assignments, you will want to periodically review and adjust the territories based on the team’s performance. You may find that some technicians have more machines than they can effectively support and others have spare capacity. I would recommend that this be done semi-annually at least, so that you can make changes as the equipment population changes.

Ken Edmonds
About the Author
KEN EDMONDS is the owner and founder of 22nd Century Management, which helps managers in the service industries learn the skills they need to successfully lead their teams, exceed expectations and provide outstanding customer service. An Air Force veteran whose background includes owning a copier dealership and working as a service manager for other companies, Edmonds also spent 18 years working for manufacturers as a district service manager. He’s helped dozens of service managers incorporate cornerstone methods to enhance their success.