Sales Quotas & Territories : Sales Quotas & Territories Unit IV
Sales Quota : Sales Quota Routine assignments to sales units such as territory, districts and branches etc. Used to plan, control and evaluate the selling activities of the company Derived from strategic objectives
Importance of Sales Quota : Importance of Sales Quota Provide Performance targets Provide standards Provide control Provide motivation
Types of Sales Quotas : Types of Sales Quotas Sales Volume Quota Profit Quota Expenses Quota Activity Quota Quota Combinations
Sales Volume Quotas : Sales Volume Quotas Product line Product range Sales divisions Sales territories Sales districts Branch Offices Sales Force
Profit, Expense, Activity Quotas : Profit, Expense, Activity Quotas Multiproduct companies – different products contribute varying level of profits Expense quota – contain selling costs. Could be linked to different sales levels or % of sales volume. Activity Number of presentations made Number of new accounts Number of recovery calls Number of service calls Number of customers visited
Territory Management : Territory Management Group of customers/ geographical area assigned to a sales unit May or may not have geographical boundaries Territory Management includes Potential business Coverage Reports Territory size Portfolio of Accounts Selling Techniques Customer satisfaction Selling Abilities
Determining Number of Salesperson : Determining Number of Salesperson Workload Approach Customers are grouped in categories ( past records & future potential) Call frequency assessed for each category Total workload is calculated by multiplying the call frequency X number of customers/category . Then summing for all categories
Why have Sales Territories? : Why have Sales Territories? Obtain entire coverage of market Establish a salesperson’s responsibility Evaluate performance Improve Customer relations Reduce sales expense Better matching of salesperson to customer Benefits sales personal and company
Determining Number of Salesperson : Determining Number of Salesperson Workload Approach The average number of calls/week/salesperson is calculated Calculate number of working weeks in a year The number of salespeople required is determined by dividing the total annual calls required by the average number of calls one salesperson can make per year . Formula : Number of customers * Call frequency Average weekly call rate * Number of working weeks per year
Determining number of Salesperson : Determining number of Salesperson Workload method Ability of management to accurately assess the number of calls required per customer category Daily calls may vary between one to ten Is especially useful if company is entering into new markets.
Sales Territories : Sales Territories Important organization issue As affects salesperson’s ability to perform well Also influences the amount of incentive pay that a sales person can earn Satisfaction with sales territories increases employee satisfaction and effectiveness
Allocation of sales territories : Allocation of sales territories Balance the work load between territories Number of calls to customers in each category Amount of time required for each call Total number of calls to be made Travel time Higher weightage to prospects and major accounts Use of executive judgement in determining some of the above
Allocation of sales territories : Allocation of sales territories Sales potential of territories Moving of sales people from low to high sales potential territories could work as a motivator Commission on the basis of sales quota in turn determined by the sales territory potential is fair If there are wide disparities between sales territories it may require adjustments
Revision of Sales Territory : Revision of Sales Territory change in consumer preference; competitive activity; diminution in the usefulness of chosen distribution channels; complete closure of an outlet or group of stores; increases in the cost of covering territories Salesforce complacency.
Sales efforts before territory revision : Sales efforts before territory revision Promotion and sales efforts may be ineffective Poor planning of sales call Spending more time on non-sales activities Faulty supervision Reassess market potential Reassess customer preferences and competitor activity