Management of Sales

Territory and Sales Quota

 Sales Territory
➢ A group of present and potential customers assigned to an individual sales
person, a group of sales persons, a branch, a dealer, a distributor or a
marketing organization at a given period of time

➢ A profitable sales territory has a number of potential customers willing to buy

the category of products sold under the firm’s brand name

2
 Sales Territory
➢ Territories are defined on the basis of geographical boundaries in many

organizations

➢ Better sales planning and effective operational control

3
 Sales Territory
• Advantages of designing a sales territory:
➢ better market coverage, effective utilization of the sales force, and
efficient workload distribution
➢ performance evaluation
➢ controls over the direct and indirect selling cost
➢ boosts employee morale
➢ monitor sales and evaluate programs

4
 Designing Sales Territories

Compare
Modify
Select the territories on
Combine territorial
basic and Decide on Decide on allocation Assign sales
control units boundaries
appropriate the criteria the starting criteria and force to new
adjacent to to balance
geographic for allocation point conduct territories
starting point workload and
control units workload
potential
analysis

5
 Designing Sales Territories
Factors influencing
the modifications
of a territory

mergers, market, sales force, product life cycle

consolidation, split turnover, customer change, product
in division relocations line change

6
Strategic Account Planning Matrix

7
SALES QUOTA

8
 Sales Quota
• A quota is an expected performance objective
• It is a sales assignment or goal to be achieved in a specific period of time
• It is routinely assigned to the sales units (e.g. departments, divisions, and
individuals)
• Sales quotas play a role in
• Motivating sales force
• Feedback on performance
• Management by exception
9
 Principles of Quota Setting
Objective and based on market derived facts and figures
• Prevalent conditions in sales territory
• Competition
• Experience and ability of salespersons
• Participatory quota setting: motivation and realization of organizational goals

Simple to understand, flexible to market conditions

Method and approach to quota setting should not change very often

Sales quota aid in designing compensation plan, motivation plan and career progression

Achievable with sincere efforts by an average salesperson

10
 Principles of Quota Setting
• SMART
• Specific
• Measurable
• Attainable
• Realistic
• Time specific

11
 Organization of the Sales Job
• Defining annual objectives

• Procedure for setting sales quota

• Conferencing with each sales person

12
 Organization of the Sales Job

• Four key areas of sales job

• Territory management: revenue, expenses, key accounts, leads and
prospects, market share, growth potential, trade and dealer relations
• Account management : BCG matrix
• Call management
• Self-management

13
 Kinds of Objectives
• Regular and recurring objectives
• Sales volume
• Market share, coverage
• Prospects and lead generation
• Expenses, frequency and quantity of calls, reporting procedures
• Problem-solving objectives
• Creative objectives

14
 Procedure for Setting Quota

Conferencing with each

Schedule planning: Summarized written quota
salesperson: agreement on
organizational goals and statement: mutually
territory, account, call
systems, benefits and agreed goals for shared
management, and self-
incentives for salespersons understanding
management

15
 Types of Sales Quota
Sales Activity Quota:
Sales Volume Quota: total sales call, call on
Sales Budget Quota:
monetary, unit sales, prospects, new
expense, profit
point sales accounts, product
demonstration

Combination Quota:
selling and non-selling
activities

16
 Methods of Setting Sales Quota

Sales Forecasts and Potentials

Past Sales or Experience

Executive Judgment: new product in an existing territory and existing product in a new territory

Judgment of Salespeople (Salesforce composite): starting own salesforce and territory expansion

Compensation

17
 Problems in setting Sales Quota

Individual difference in every organization

Inadequate attention to the non-selling activities such as

prospecting, handling customer objections, and selling new products

A perfect quota is a combination of selling and non-selling activities

18