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Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
Sales quotas
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Sales quotas

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  • 1. Sales Quotas 1
  • 2. Sales Quotasa) Provide goals: sense of directions, salespeople have to focus on work in keeping with co. objectives, present challenges to work harder and perform better 2
  • 3. Sales Quotasa) Provide goals: sense of directions, salespeople have to focus on work in keeping with co. objectives, present challenges to work harder and perform betterb) Standard for measuring performance: • Sales representative • Dealer/Distribution • Branch / Region • Territory 3
  • 4. Can compare performance throughout organization irrespective of territories/productSales Person Quota (in Actual Sales Difference (in Performance lakh rupees) (in lakh lakh rupees) Index (in %) rupees) A 20 20.5 +0.5 102.5 B 15 15.1 +0.1 100.66 C 18 17.8 -0.2 98.88 D 22 22.1 +0.1 100.45 4
  • 5. Sales Quotasc) Controlling expenses/salespersons’ activities; failure to achieve quota enables sales manager to spot deviation in performance 5
  • 6. Sales Quotasc) Controlling expenses/salespersons’ activities; failure to achieve quota enables sales manager to spot deviation in performanced) Strengths & weaknesses in structure; Change of direction 6
  • 7. Sales Quotasc) Controlling expenses/salespersons’ activities; failure to achieve quota enables sales manager to spot deviation in performanced) Strengths & weaknesses in structure; Change of directione) Basis for compensation plan: tool for motivating sales force; achievement of quota increases self confidence Different view also prevails that salesperson need compensation as well as acknowledgement; cos. compensate on customer satisfaction; also in traditional quotas bonus ranges between 90 – 110%, in new compensation plan bonus ranges between 25-300%, new system allows rejection of non-profitable/non-strategic customers 7
  • 8. i. Sales Volume Quotas: Most simple, set for product/territory/line/channel or distribution; may be re Sales/unit sales; annual quota can be broken down into half yearly / quarterly / monthly quotas Managers can evaluate / compare performances 8
  • 9. ii. Gross margin / Net Profit Quotas: Fixed on gross margin / net profit aimed at; cuts expenses (Sales / Expenses); Gives an accurate picture of profits generated Commission paid is more accurate when calculated on gross margin Help managers do profitability analysis for organizational effectiveness But sales people can concentrate on selling only profitable products 9
  • 10. iii. Budget / Activity Quotas: Emphasis on non selling activities; Have to know that apart from selling there are other considerations – should be clubbed with sales volume quotas – prospects called – displays – service – demos – dealer training …; After sales calls, customer relations, promotion management 10
  • 11. IV. Expense quotas: For making people cost conscious – expense tied to sales volume. 11
  • 12. Combination Quotas: Apportionment of weightage between various activities … 12
  • 13. What is a good Quota? 13
  • 14. What is a good Quota? Fair; 14
  • 15. What is a good Quota? Fair; Challenging and Rewarding: Sufficiently 15
  • 16. What is a good Quota? Fair; Challenging and Rewarding: Sufficiently high & linked to bonus / commission Understandable 16
  • 17. What is a good Quota? Fair; Challenging and Rewarding: Sufficiently high & linked to bonus / commission Understandable Flexibility 17
  • 18. What is a good Quota? Fair; Challenging and Rewarding: Sufficiently high & linked to bonus / commission Understandable Flexibility Must help achieve management goals 18
  • 19. Quota Setting Process Based on 19
  • 20. Quota Setting ProcessBased onA. Sales forecasts and market potential 20
  • 21. Quota Setting ProcessBased onA. Sales forecasts and market potentialB. Sales forecast alone (used when company does not have data / software / personnel to calculate market potential 21
  • 22. Quota Setting ProcessBased onA. Sales forecasts and market potentialB. Sales forecast alone (used when company does not have data / software / personnel to calculate market potentialC. Past experience; arbitrary increase over past years sales / averaging sales over past years; used when company does not have sales forecast / market potential data 22
  • 23. Quota Setting ProcessBased onA. Sales forecasts and market potentialB. Sales forecast alone (used when company does not have data / software / personnel to calculate market potentialC. Past experience; arbitrary increase over past years sales / averaging sales over past years; used when company does not have sales forecast / market potential dataD. Executive judgment; common in small orgn’s 23
  • 24. Quota Setting ProcessBased onA. Sales forecasts and market potentialB. Sales forecast alone (used when company does not have data / software / personnel to calculate market potentialC. Past experience; arbitrary increase over past years sales / averaging sales over past years; used when company does not have sales forecast / market potential dataD. Executive judgment; common in small orgn’sE. Sales people compensation 24
  • 25. Quota Setting ProcessBased onA. Sales forecasts and market potentialB. Sales forecast alone (used when company does not have data / software / personnel to calculate market potentialC. Past experience; arbitrary increase over past years sales / averaging sales over past years; used when company does not have sales forecast / market potential dataD. Executive judgment; common in small orgn’sE. Sales people compensationF. Set by sales people themselves 25
  • 26. Quota Administration Motivating Quota Setting understandable quotas Involvement of sales person Keeping them updated Common problems  Deciding priority of accounts  Allocation between present & prospect customers  Proper balance between selling & non selling activity  For overly demanding a/c s. 26

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