This presentation is delivered in MBA Institutes to teach young learners about . 1. Basis of Allocating Sales Territories 2. Basis of Allocating Sales Quota or Sales Targets

1. Welcome to the Rocket Singh Class
Dhruv Sood - 09999966971
dhruvmax@gmail.com

2. Territory Allocation
and
Sales Quota

3. Disclaimer
• I am not teaching you any rules or laws. So stay relax.
• If you don’t speak, I don’t speak…..Interactivity is important .
• Information shared here needs to be used as per Managerial
Judgments.
• We are not making fun of any one …….will give respect to each
individual and its roll.
• Questions are welcome at any stage.

4. BIG BOSS
JUNIOR BOSS
JUNIOR BOSS
SALES MANAGERS
Contact with Territory
Different Designations
Senior Management
Usually reporting to Top Management.
Designations : VP and Above
Reporting to Senior Management
Designated : AVP etc

5. GETS
A SALES
TARGET &
TERRITORY
SELL
Rs 100 Cr. in
India

6. View Point of the Boss…..
• I cant do it all alone .
• Target needs to get achieved with the help of team
• Usually he is a General Manager.
• Division of Territories
• Budgets
• Compensation of Sales Forces
• Incentive Schemes – Launching
• Reviews of Middle Managers
• Motivation – Positive & Negative .

7. KHARBOOJA KATEGA OUR SUB ME BATEGA
TIME FOR
Territory Allocation
and
Sales Quota

8. What is a Sales Territory
• A sales territory is the customer group or geographical area
• for which an individual salesperson or a sales team holds
responsibility.
• Territories can be defined on the basis of geography, sales potential,
history, or a combination of factors.

9. DIVISION & ALLOCATION OF SALES TERRITORY

10. Criteria for Dividing Sales Territories
• Sales potential (Rs) = Number of possible accounts x Buying power
(Rs)
• Workload (#) = [Current accounts (#) * Average time to service an
active account (#)] + [Prospects (#) * Time spent trying to convert a
prospect into an active account (#)]
• Coverage :This is size or travel time. The amount of time needed to
reach customers and potential customers."

11. BIG BOSS –
•India
JUNIOR BOSS
JUNIOR BOSS
North West East South
GEOGRAPHICAL
Delhi
Punjab
Haryana
HP
UP
Maharastra
Goa
MP
Rajisthan
Bengal
Bihar
Chattisgarh
Calcutta
Kerela
Tamil Naidu
Karntaka

12. Coverage
• Territory may be small so easy to cover.
• When Territories are large : Complications increase
• Uncertainty of travel
• Cost of Travel : Train Vs Air Tickets , Hotel Categories.
• Solution : Advance Planning , Rotating 45 day plans : Beat Plan
• Imbalances : Sales force want to travel to easy places. They over look
the potential customers.
• Some Territories are difficult to travel : Travelling within Delhi &
Travelling in Say Mountains : HP.

13. Who are the customers: Sales Models
• Direct Sales
• Individuals : You can sell to any one. Geography doesn’t matter.
• Corporate/ Industry Verticals

14. JUNIOR BOSS
JUNIOR BOSS
North West East
South
Corporate / Verticals
Agriculture – North Automobiles – NorthBPO – North Consumer Durables
– North
SALES TERRITORIES WILL BE VERY DIFFERENT

15. • In-Direct Sales
• Representative from the Company to chase sales from
• Distributors / Dealers / Retailers

16. Advantages : Sales Territory
• Improves market coverage
• Effective utilization of sales force
• Efficient allocation of work
• Accountability & Evaluate the performance
• Control over direct & indirect costs
• Optimum utilization of sales time

17. Conflicts
• Its my property now: I have developed the territory so its my property
now.
• Division or Re-allocation of the territory.
• More difficult if linked to compensation or incentives.

18. Sales Target or Sales Quota

19. Types of Quota/Targets
• Sales Volume Quota
• Profit Quota
• Expense Quota
• Activity Quota
• Quota Combination

20. What is Sales Target or Sales Quota
• A sales quota is the sales goal set for
• a product line
• company division
• sales representative.
• It is primarily a managerial device for defining and stimulating the
sales effort.”. … (By Kotler)

21. BIG BOSS –
•Rs.100 Crores
•India
JUNIOR BOSS
JUNIOR BOSS
SALES MANAGERS
- Rs.50 lacs each
Rs.25 Crores : North Rs.25 Crores : West Rs.25 Crores : East Rs.25 Crores : South
Simplest form
of
Quota Allocation

22. Problems in setting sales quota
• Individual difference in every organization
• Perfect quota is a combination of selling and non- selling activities
• Improper attention to the non-selling activities (e.g. searching for prospects,
handling customer objections, and creating market for probable entry of new
products)

23. Setting Quota for Sales Team
1. Establishing Parameters for developing Sales Quota
• Territory Potential
• Past Sales Experience
• Total Market Estimate
• Executive Judgment
• Compensations Plan
2. Add to this Growth Expectation and Predict Sales
• Expectation should be realistic & challening .

24. Factors to Consider for Quota for Sales Reps
• Consider his TENURE in the organisation
• Assigned Job
• His Sales Skill & Compensation
• Market Potential
• Competition

25. Get a Buy-in from the Sales Team
Discuss the process used to Set the Quota
Jointly Decide on the Quota.

26. To Motivate Desired Performance
• Incentives – Cash & Kind – Gifts , Foreign Trips etc
• Opportunity to Grow
• Increase in Compensation

27. How to monitor Continuous Performance
• Quota provides an opportunity to DIRECT & CONTROL sales activity
of the Rep.
• Communicate Quota formally . Make sure its well understood by the
Rep.
• Regular updates on Quota in One to One meeting – PRP . Helps on
analysis strengths and weakness. And Course correction at regular
intervals
• Regular Appraisals
• Sales person needs regular encouragement , Advise and occasional
warning

28. CGPA – CUMULATIVE GREAT POINT AVERAGE
• Companies are not focusing on ONE THING – example Sales
• Organisation always issue – Key Result Area.
• Weights are attached to KEY RESULT AREA on the relative importance
of KRA.
• All of them are accumulated to give CGPA.
• Appraisals are done on that basis.

29. Conclusions
• Sales is a different game.
• Very harsh and straight forward.
• Organisation based on result orientation have tools to evaluate each
individual.
• Tangibility of Sales
• Rules of Sales may change with Fast Progress of Internet.
• May be we will have to Unlearn what we have learnt till now.
• Be open for Change …….Always

30. THANK YOU