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Transcript of 5 Sales Quota Unit - 5
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Sales Quota
Subject Instructor:
Prof. (Dr.) Ashish Chandra
Professor
MarketingAsia-Pacific Institute of Management
Subject: Sales and DistributionManagement
Courses: I.B. and
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Objectives of the Session
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WHAT IS A QUOTA?
A quota refers to an expected performance
objective.
Quotas are tactical in nature and thus derived
from the sales forces strategic objectives.
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WHY ARE QUOTAS IMPORTANT ?
Quotas provide performance targets.
Quotas provide standards.
Quotas provide control.
Quotas provide change of direction.
Quotas are motivational.
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TYPES OF QUOTAS
Sales volume quotas.
Breakdown total sales volume.
Profit quotas.
Expense quotas.
Activity quotas.
Quota combinations.
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Sales volume quotas includes amount
of money or product units for a specificperiod of time.
Sales volume quotas
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Product lines.
Individual established and new products.
Geographic areas based on how the salesorganization is designed, which wouldinclude:
Sales division.
Sales regions.
Sales districts.
Individual sales territories.
Breakdown total salesvolume
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There are two types of profit quotas:
Gross margin quota determined by
subtracting cost of goods sold from salesvolume.
Net profit quota determined by subtractingcost of goods sold and salespeoples direct
selling expense from sales volume.
Profit quotas
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Expense Quotas are aimed at controlling costs
of sales units. Often expenses are related to
sales volume or to the compensation plan.
Expense quotas
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Activity quotas are set objectives for job-related
duties useful toward reaching salespeoples
performance targets.
Activity quotas
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Quota Combination means
combining of two or more quota
methods.
Quota Combinations
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METHODS FOR SETTINGSALES QUOTAS
Quotas based on forecasts and potentials.
Quotas based on forecasts only.
Quotas based on past experience.
Quotas based on executive judgments.
Quotas salespeople set.
Quotas related to compensation.
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LEVELS OF ORGANIZATIONAL SALES PLANNING
LEVEL PURPOSE: WHAT ISPLANNED
WHO (USUALLY) ISINVOLVED
1. Marketing Organizational goals(increase in market share orpenetration, increase incustomers, increase in salesdollars and units sold)
Upper managementand sales andmarketing executives
2. Regionalplan
Priorities (which regions,markets, and products toemphasize)
Regional and districtsales managers(which input fromsales reps)
3. Districtplan
Dollar allotment (forpromotion, advertising, new
employees, sales incentives,and so on)
District managers andsales representatives
4. Territorialplan
Goals for number of newcustomers and for increasedbusiness with old customersin each region and territory
Sales representatives
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SELLING BY OBJECTIVESSETS FUTURE TARGETS
Two basic steps to implementing sales strategies:
Step 1: Organize the jobs.
Step 2: Define annual objectives in
important areas.
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FOUR MAJOR AREAS TO ESTABLISHOBJECTIVES WITH EACH SALESPERSON
Step 1: Organizing the Job
Step 2: Defining Annual Objectives
SALESMANAGEMENT
Salesperson
Account Management Call Management Self-ManagementTerritorial Management
1. Regular
2. Problem Solving3. Innovative
Portfolio ofAccounts
Potentials
Coverage
Records
Order Size
Penetration
Reports
CustomerSatisfaction
Preparation Selling Technique
Training
Communication
Buyer Behavior
Impact
Handling Resistance
Appearance Manner
Communication
Skills
Abilities
Attitudes
Selling Abilities
Limits Potential Business
Size
Customer Base
Prospects
Leads
Market Share
Growth
Trade Relations Dealer Relations
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Treating the territory as a business.
Managing each account.
Managing each call.
Managing oneself.
SELLING BY OBJECTIVES
SETS FUTURE TARGETS
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1. Build the stars.
2. Harvest the cash cows.
3. Fix the problems.
4. Divest the dogs.
Tactical Plan for
Managing Accounts
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Is the sales rep properly armed with information,leads, and materials before the call occurs?
Is the sales rep applying the major principles of
selling technique during the presentation? Or is thesales rep inventing his or her own and perhaps
making every mistake every salesperson in history
has made?
Has the salesperson planned some coherent attack
for the sales presentation, and is it working well?
Questions about the Content of Calls
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Does the sales rep have enough training incommunication, in meeting sales resistance, in
understanding buyer behavior, in improving call
impact, in gaining greater account penetration, in
follow-through methods to do the job?
Does the sales rep have enough knowledge of the
product and its applications, service and system
backup, and technical problems to handle the
toughest calling situation?
Questions about the Content of Calls
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Since selling involves making contact with strangers,
dress, style, conduct, and personal decorum are part of thesalespersons tool kit.
Communication skills, memory, logical speaking habits,and writing competence are vested in the person.
Attitudes and outlook toward the job, the product, thecompany, and the customers all have an important bearing
in the results to be achieved.
The knowledge of selling techniques, what the variouskinds are and how and when to use them, are personallyvested in the sales rep and can be produced and polished bytraining.
SELF-MANAGEMENT IN SELLING
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BASIC LEVELS OF
INDIVIDUAL OBJECTIVES
1. Regular, ongoing, and recurring objectives.
2. Problem-solving objectives.
3. Innovative or creative objectives.
The highest level of excellence is reserved
for people who are attaining all three.
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THE PROCEDURES FOR SETTING
OBJECTIVES AND QUOTAS WITH
SALESPEOPLE
Prepare the Procedure.
Schedule conferences with each salesperson.
Prepare a written summary of goals agreedupon.
Optional group meeting to share objectives.
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Name
For Year
List Your Responsibility Area
Results Expected
PessimisticOutput
1.2.
3.4.5.6.7.8.9.
10.11.12.Other
$ Volume/month$ Expense/month
Gross margin/month
OptimisticRealistic Results
Instruction: List the regular, ongoing, recurring objectives. Cover the ten major respon-sibilities of your job next year to manage territory, accounts, calls, and yourself.
SELLING BY OBJECTIVES FORM
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AGOOD OBJECTIVE AND
QUOTA PLAN IS SMART
Specific
Measurable
Attainable
Realistic
Time specific
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Test 1: Does this quota state exactlywhat the intended result is?
Test 2: Does this quota specify whenthe intended result is to beaccomplished?
Test 3: Can the intended result be
measured?
A simple three-way test to judge how
well quotas and objectives are written
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SELLING-BY-OBJECTIVES
MANAGEMENT
Selling by Objectives (SBO) is the process
whereby the manager and salesperson jointly
identify common goals, define major areas
of responsibility, and agree on the results
expected.
SETTING OBJECTIVES AND QUOTAS IS A TWO WAY
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SETTING OBJECTIVES AND QUOTAS IS A TWO-WAY
PROCESS BETWEEN MANAGER AND
SALESPERSON
Mutually SetObjectives and
Quotas
Measure
Performance
Evaluate
Performance
Reward
or Penalty
Publicize
Performance
Results
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Thank YouAll!