5 sales quota unit - 5

8/4/2019 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!

5 sales quota unit - 5

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