This session on ‘Measuring Territory Performance’ will focus on evaluating and improving the performance
of sales territories. You will learn:
1. How to measure your territory performance, using the following metrics:
a. Inputs
b. Outputs
c. Outcomes
2. The input, output and outcome metrics used by B2B organisations
3. How to improve your territory performance
Having learnt how to create sales territories, the next logical step is to monitor territory performance. This is
where performance metrics come into play. You should primarily look at three categories of metrics to
measure a territory’s performance, which are as follows:
1. Inputs
Inputs refer to the resources devoted by a firm in generating sales.
2. Outputs
Outputs refer to the immediate results observed from feeding in the inputs.
3. Outcomes
Outcomes refer to the final value or impact of the inputs fed.
Some commonly-used input metrics are depicted in the image below.
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Output metrics are intermediate parameters that help firms assess territory performance. Some
commonly-used output metrics include:
The inputs and outputs, together, result in the final business outcomes or the selling and distribution
outcomes that all your efforts should result in. Some commonly-used metrics for analysing territory
outcomes are depicted in the image below.
Accurately identifying and measuring these parameters can help a firm identify its territory’s pain points and
focus its sales efforts accordingly.
Even in B2B settings, territory creation is done using the same parameters: geography, business potential
and span of control. However, the input, output and outcome metrics used by B2B businesses can differ
slightly from those used in B2C. You understood this using the example of Vodafone Enterprise.
The underlying objective of any organisation is to generate revenue by selling its product and services to
targeted customers. To do so, the input metrics used by Vodafone Enterprise are as follows:
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To understand the output metrics used by Vodafone Enterprise, you first understood what a sales funnel is,
as depicted in the image below.
All leads captured in the sales funnel are tagged as warm, hot or matured, depending on the current status
of the lead. A robust sales funnel is a key prerequisite for the effective functioning of a sales team in the
B2B domain.
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The output metrics used by Vodafone Enterprise are as follows:
The outcome metrics used by Vodafone Enterprise are as follows:
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After analysing your territory performance, identifying the potential areas of business growth and achieving
better sales is a crucial part of managing a territory. A firm can optimise its territory performance either by
improving sales from the existing outlets or by increasing the number of outlets it is present in.
To decide which way to go, a firm can use territory performance metrics such as weighted distribution and
outlet share.
Outlet share is the ratio of a firm’s sales to the total category sales from the outlets in which it is present. It
indicates how well a firm’s products are doing compared to those of its competitors. It can be calculated by
dividing the market share by the weighted distribution.
● Outlet share = Brand’s sales / Total category sales from the outlets in which the brand is present.
● Weighted distribution = Total category sales from the outlets in which the brand is present / Total
category sales in the territory.
● Market share = Brand’s sales / Total category sales in the territory.
● Therefore, Outlet share = Market share / Weighted distribution
The table in the following image can be used to identify which path to take in an attempt to increase sales.
The actions to take to increase sales and market share using either of the strategies is depicted in the
image below:
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By using the analysis, you will be able to identify the areas to focus on to achieve higher revenue and
market share. By implementing the actions recommended, you will be able to carry out your plan.
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