This document discusses sales quotas, including what they are, different types of quotas, objectives of quotas, and how to set quotas. It defines a sales quota as an individual sales target assigned to a sales unit like a person or region. There are various types of quotas including sales volume, profit, expense, and activity quotas. Quotas are used to measure performance, control sales and expenses, motivate performance, and direct sales activities. The document provides tips for setting quotas, such as considering historical sales, growth expectations, individual reps' skills and markets, and getting buy-in from the sales team.

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A.Balaji(10Ab07)
S.Sidharth(10Ab35)
Shano (10Ab12)
Sales Quota

2. WHAT IS A QUOTA?
• Individual sales target figure assigned to each sales unit such a
sales person, dealer, distributor, region, or territory, as a
required minimum for a specified period (month, quarter,
year).
• Sales quotas may be expressed either in figures (monetary
terms) or in number of goods or services sold (volume terms).

3. TYPES OF QUOTAS
• Sales volume quotas.
• Profit quotas.
• Expense quotas.
• Activity quotas.
• Quota combinations

4. Sales volume quotas
•Monetary sales Volume Quota
•Unit sales volume Quota ( eg motor
companies)
•Point sales volume Quota (RBS)

5. Profit quotas
• Gross margin quota determined by
subtracting cost of goods sold from sales
volume.
• Net profit quota determined by subtracting
cost of goods sold and salespeople’s direct
selling expense from sales volume.

6. • Activity quotas set objectives for job-related
duties useful toward reaching salespeople’s
performance targets.
• Expense quotas are aimed at controlling costs
of sales units. Often expenses are related to
sales volume or to the compensation plan.

7. Combination quota
• Sales performance is calculated based on
selling and non selling activities.
• Various quotas are there.
• uses points as common measure

8. Evaluating with combination quota
Type Quoata Actual % Weight points
Sales vol 5 0,00,000 52,00,000 104 3 312
Selling
expense
5,00,000 5,20,000 96 1 96
New
customer
10 13 130 4 520
928

9. Objectives
• To provide quantitative performance Standard
– Quotas provide a means for determining
which sales unit are doing an average, below
average or above avg. job. It is the yardstick
for measuring sales performance, but
management must dig deeper to uncover
reasons for variations

10. • To obtain tighter sales and expense
control – Quotas are designed to keep
selling expenses within limits. Many
companies reimburse sales expenses
only up to a certain percentage of sales
quota.

11. • To motivate desired performance – Quotas
provide incentive to achieve certain
performance level. Companies may use quota
to provide their sales force the incentives of
increasing their earnings through commissions
or a bonus if the quota is surpassed and
recognised for superior performance.

12. • Controlling Sales Persons’ activities –
Quotas provide an opportunity to direct and
control the selling activities of sales persons. If
the sales person fails to attain the quota the
company can take corrective actions to rectify
the mistake.

13. • Management must make sure that the sales
personnel understand quotas and quota
settingProcedure. Conveying this understanding is a
critical step in securing acceptance of quotas.
• It is important that sales personnel understand
the significance of quotas as communicator of “ how
much for what period”. It requires:
• Keeping sales personnel informed: Effective sales
management keeps sales personnel informed of their
progress relative to quotas. It permits them to
analyse their own strong and weak points.

14. Need for continuous managerial control:
• In administering any quota system, there is a
need for continuous monitoring of
performance.
• Sales personnel need encouragement, advice
and occasionally warnings in deciding to take
measures to improve their performance.
• Continuous managerial review and appraisal
are required.

15. Methods for setting sales quota
• Territory potential.
• Past sales experience.
• Total market estimates.
• Executive judgment.
• Sales person estimates.
• Compensation plan

16. Setting Sales Quotas for a Sales Team
1. Establish Parameters for developing quotas
 Historical trends
 Last year’s revenue
 National Standards
 Territory Analysis

17. 2. Add a Growth Expectation – now predict revenues
for the next year.
Expectation should be:
 Realistic
 Challenging

18. 3. Adapt the Quotas to each Sales Reps – dividing total revenue
by total number of salesperson.
Factors to consider:
 Tenure
 Assigned job
 Sales skills
 Market potential
 Competition

19. 4. Get buy-in from your sales team
• outline the process you'll be using to set quotas to your
team.
• Make it a joint decision, if possible, to assign a specific
quota.
5 Adapt Quotas to market realities
 Review Periodically.
 Change Quotas according to the economy

20. 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.

21. A GOOD QUOTA PLAN IS
SMART
»Specific
»Measurable
»Attainable
»Realistic
»Time specific

22. THANK YOU