Sales Quota Chapter-8

8/12/2019 Sales Quota Chapter-8

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Oxford University Press 2012. All rights reserved.

Chapter 8

Management of SalesQuota


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Sales quota

a quota is an expected performance objective

It is a sales assignments or goal to be achieved in a specific period

of time

it is routinely assigned to the sales units (e.g. departments,divisions, and individuals)

sales units proceed to reach quotas in their respective domains

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 the sales

effort.. Kotler


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Principles of quota setting

Setting of sales quotas is a challenge to the sales manager and

should be handled with precision and adequate skill.

Objectivity to be observed while fixing quotas and should be

based on facts and figures drawn from the market.

It must be simple to understand both to the manager and the

sales people.

Quotas set above the achievable limit often demotivate and

result in high turnover in the organization


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Principles of quota setting

flexible to the prevailing and emerging market conditions

there should be a level of definiteness in the quota set for a

salesperson

it should be fixed either in terms of geographic territory, onmoney value, or on the basis of units of product(s)

a participatory quota setting procedure followed jointly by the

sales manager and sales people together serves as a tool of

motivation and leads to the realization of the organizational sales

goals


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The Concept of SMART

S M A R TP

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CIFI

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ESPECIFIC

SBO

MBO in the Sales

domain?


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7/10 Oxford University Press 2012. All rights reserved.

Organization of the Sales JobDefining annual objectives

Procedure for setting sales quota

IndividualGoalsettin

gform

Conferencing with each sales person



Types of sales quota

Sales Volume Quota

Sales Budget Quota

Sales Activity Quota

Combination Quota



Methods of Setting Sales Quota

Quotas are based on

sales forecasts and potentials

forecast

past sales and experience

executive judgment

sales people judgment

compensation



Problems in Setting Sales Quota

1. There is a high level of individual difference in every organization

2. A perfect quota is a combination of selling and non-selling

activities

3. Often sales people do not give proper attention to the non-selling

activities (e.g. searching for prospects, handling customer

objections, and creating market for probable entry of new

products)

Sales Quota Chapter-8

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