Some of the most important and underappreciated people in the industry are the manufacturer territory managers (TMs). These individuals are charged with staying on top of their product offerings and programs, supporting their dealers, and growing territory sales. Because of the emphasis on products and programs, training on how to manage a territory is often given short shrift. Here are three simple, yet powerful tools any TM can use to manage a territory.
Territory Matrix
A territory matrix is based on the portfolio matrix, or growth share matrix, developed by two of the principals of the Boston Consulting Group in the 1970s. It is a useful tool for TMs to balance their dealer bases to ensure they are growing today and in the future.
A territory matrix assesses dealers based on the TM’s brand’s share of their business and the dealer’s growth potential. Dealers with high growth potential who are giving most of their business to the TM are “stars.” They merit a lot of attention because they are the future of the territory.
If the TM has less than half of the dealer’s business, but the dealer is high growth, he is a “question mark.” He’s growing, but he’s growing with other brands. Ideally, the TM will be able to capture a greater share of the question mark’s business and turn him into a star.
When the dealer doesn’t have a lot of growth potential but gives the TM most of his business, the dealer is a “cash cow.” Milk the cash cows. They provide a foundation for a TM’s quota, and while they were likely stars in the past, they’re never going to do more than they are today. Keep them happy to keep buying but do not invest in building them like you would a star or a question mark.
Finally, if a dealer is not going to grow and is giving most of his business to other brands, the dealer is a “dog.” Do not waste time on the dogs. They may be great guys, but they’re going nowhere.
A TM can assess his dealer base. He should be trying to find question marks he can turn into stars. Otherwise, sooner or later, they will become dogs. Eventually, the stars will become cash cows. Most of his time should be spent with stars, followed by question marks, then cash cows.
SWOT Analysis
A SWOT analysis consists of internal strengths and weaknesses as well as external opportunities and threats. This is an assessment that should be done by the dealer with the TM. It’s especially useful to conduct with stars and question marks because it helps identify where the dealer sees shortcomings the TM can help address using the resources made available to him.
In the late third quarter or early fourth quarter, a TM should schedule time with his more important dealers to sit down off-site, away from distractions, and lay out a SWOT analysis. This also gives the TM an opportunity to point out what he sees about the dealer’s operational strengths and weaknesses to point out where the dealer needs to focus. This might be an excellent time to talk about hiring a service manager or even a general manager.
The TM should also make sure the dealer is aware of impending opportunities and threats he will be facing in the near future. These might range from consumer credit to refrigerant changes to competition from private equity. What does the dealer need to worry about, and what can he take advantage of?
New Products/New Markets
When looking at where the dealer expects to grow in the following year, the TM can help with a new products/new markets matrix. A dealer might expect some organic growth based on the economy and the area’s installation history, which dictates what will be replaced in the coming year. This will give a dealer a base of business. To grow, he must add products or services, or he must expand into other markets, geographically or horizontally.
A dealer might add IAQ products that were available in the past but not necessarily pushed. This adds a certain amount of sales. He might also expand into a nearby town, giving him more opportunity. Or he might decide to add light commercial to his residential business.
Working through this grid helps the TM identify where he can support growth with his dealers. It also implies a commitment from the dealer that the TM can bring up through the year to keep the dealer moving forward.
You might wonder why a TM should put forth this kind of effort. Mike Murphy, the former publisher ofThe NEWSworked for years as a TM in the industry. He said, “When I was a territory manager, I didn’t sell equipment; I sold myself. I sold my ability to help my dealers achieve greater prosperity. Once they bought that, they bought everything else I offered.”
