“Sales Territory Design: 30 Years of Modeling and Implementation” by Prof. Andris Zoltners, Professor of Marketing at the Kellogg School of Management at Northwestern University, and Dr. Prabhakant Sinha, who founded ZS Associates with Prof. Zoltners, was chosen to receive the INFORMS Society for Marketing Science Practice Prize.
Sales territory alignment is the assignment of accounts and selling activities to salespeople and teams. The paper traces the evolution of models and processes over a 30-year period during which ZS Associates, the authors’ Illinois-based firm, implemented the alignment approaches in over 1,500 projects for over 500 companies in 39 countries and designed an estimated 500,000 sales territories. Those implementations have led to revenue increases of 2% to 7% for these companies or over $5 billion in total. The increase in effective selling time with their approach has a capacity equivalent to 12,500 added salespeople.
Technology has enabled the models to get closer to sales managers, and the authors used an effective implementation processes that enhances the model-based answer and generates sales manager buy-in at the same time.
The sales territory alignment decision touches everyone in a sales force. Incorporating local knowledge into the alignment answer is a key to its success. The authors developed a process that first creates a model-based answer, then integrates field manager input in a structured way by having the manager work one-on-one with an alignment expert and the model. This process led to a 100% implementation rate for the models. The alignments are good for both the business and the salespeople, the authors say.
“This paper is a great example of how operations research and marketing science techniques, when used by those who recognize their tremendous potential, provide enormous benefit to a most basic marketing element – the sales team,” said Prof. Prof. Gary L. Lilien of Pennsylvania State University. Prof. Lilien is chairman of the INFORMS Prize Committee and a Past President of the professional association.
The INFORMS Society for Marketing Science Practice Prize, instituted in 2003, is awarded for outstanding implementation of marketing science concepts and methods. The methodology must be sound and appropriate to the problem and organization. The work should have a significant, verifiable, and quantitative impact on the performance of the client organization.
The other finalists in the competition were “Attribute Drivers: A Dynamic Factor Analytic SKU Choice Model” by Ashish Sinha, J. Jeffrey Inman, and Yantao Wang; “CHAN4CAST: A Multi-Channel Multi-Region Forecasting Model and Decision Support System for Consumer Package Goods” by Brian Ratchford, Suresh Divakar, and Venky Shankar; and “Modeling the Effects of Direct Television Advertising” by Rajesh Chandy, Deborah MacInnis, Gerard J. Tellis, and Pattana Thaivanich.
The announcement was made on June 25th at the annual INFORMS Marketing Science Conference, which took place at Erasmus University in Rotterdam.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. The INFORMS website is www.informs.org. More information about operations research is at www.scienceofbetter.org.