SALES QUOTA

Presented by Gaurav Dikshit (10022 ) Y2

Introduction:A Sales Quota is the sales goal set for a product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating sales effort.

Characteristics: These are set for specific time period can be of various types They serve as the standards They can be set for different products, salesman, different territories It is a motivational tool It requires study of market tools

Importance:Motivate sales people Quota helps management by exception It gives direction to sales peoples efforts and resources for specific needs It serves as a control

Principles of Quota Setting: SMART Quota should be specific, measurable, attainable, realistic and time specific.

 SELLING BY OBJECTIVES Organization of Sales Job

Territory Mangement Account Management Call Management Self Management

Defining annual objectives

Regular / Recurring objectives problem solving objectives Creative objectivess

Procedure for setting Quota: Schedule Planning : orientation briefings,

filling up of individual sales goal setting forms Conferencing with each sales person : basically to help out the sales person to plan, predict and course-correct properly Composite quota statement : usually a written guide for performance, goals and responsibilities

Types of Sales Quota:Different organizations use different types of sales quotas depending on: - design of the organization - level of competition in the industry - nature of business

types:
Sales volume Quotas: Can be set in the following areas Product Line
Product Range Sales Divisions Sales Territories Sales Districts Branch Offices Sales Forces (individuals)

Sales Budget Quotas:

Set by the organization by various units to control expenses, gross margins and net profits

Main aim is to make clear to sales people that they are a responsibility centre Expense quota is to limit expenses in line with sales volume and control the cost of acquiring customers

Profit quota enables sales people to generate profitable sales.

Sales Activity Quota:

Salesman are involved in sales and non-sales

Sales activities could include lead generation, prospecting, imparting information, developing new business, etc.

The quota is fixed on the activities a salesman has to perform Most widely used in insurance sales and pharmaceuticals sales
It helps sales people focus equally on the non-sales activities.

Combination Quota:
Many organizations use a combination of the sales volume quota and the activity quota Combination quota is used to control the sales force on both sales and non-sales activities Too many factors can be a demotivating factor for sales people hence sales managers must constantly brief them and exercise effective control over them

Methods of Setting Quota: Based on Sales Potential Based on Forecast Based on Past Sales Based on Executive Judgement Based on Sales Persons Judgement Based on Compensation

Problems in Setting Sales Quota: Quota setting is a complex phenomena which many a times the salesperson does not understand

Quota setting has no relevance in sellers market, where the demand for products is higher than the supply
Quotas are not accurate and based on estimates which are based on certain assumptions

Thank You