Chapter 11

Setting goals & managing the

Sales Force’s Performance

SALES MANAGEMENT:
SHARPING FUTURE SALES LEADERS,
Tanner, Honeycutt, and Erffmeyer, 2e
Wesser 2014.

Copyright © 2014 Wesser Publiser

Objectives
Why the companies set
sales goals to sales force?
Types of sales goals
How to setting a good goals
Why Set Sales Goals (Quotas)?

That is performance
standard by which
salespeople are measured.
Sales quota may setup to a
salesperson, a sales team, a
division, a dealer or
distributor..
Sales goals/ Sales quotas/
Sales targets / sales
objectives are frequently used
in business.
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 Why Set Sales Goals (Quotas)?

 Achievable goals can help motivate the sales force

Motivate  Goals serve as benchmarks to help gauge how reps
Sales Force are doing

 Goals help direct efforts toward certain sales

Focus Selling activities
Efforts  Example: growing markets

 Ensure the effort put into selling products earns

good return
Assess ROI  When sales are short of expectations, may need to
revise marketing mix variables
 Comparing results helps determine what factors
Compare cause sales to be lower or higher in one area than
Results another
 Example: competition, customer demographics, etc.
.
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Types of Quotas

Activity based Quotas

(Input based quotas)

Relate to the observable

selling efforts a
salesperson must make
o To Ensure the reps
Number of sales calls
perform core selling
o Number of presentations
activities
o Number of proposals
o Number of new clients
contacted

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Types of Quotas

Outcome based Goals/

Result based Goals

 Selling results a rep

is expected to
achieve. To Ensure the firm
o Number of orders achieves sales as
received required.
o Revenue generated
o Sales volumes
o Profits

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 Combination of Goals

What happen if the company only setup activities

based quotas to salespersons?
What happen if the company only setup result
based quotas to salespersons?

Activity based Result

goals based goals

.
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Commonly sales quotas
Sales
volume
quota

Commonly Budget
quotas
Combination sales (profit or
quotas Expense)

Activities
quotas
 Sales volume quotas
Sales volume traditionally most frequent measure
• Advantage: easily counted and analyzed
and reps understand these goals
• Disadvantage: sole metric may not
accurately provide complete picture
Set for territory, product line, channel …or
combination.
The sales volume quota is of three kinds:
o sales volume quota by Monetary
o sales volume quota by Unit
o sales volume quota by Points
.
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How to calculate Sales volume?

Sales report (05/2019) by Salesperson Mr. John

No. Items Quantity Price (USD) Amount (USD)
1 Iphone XS 100 700 70,000

2 Mc Book 50 800 40,000

3 Ipad Pro 30 500 15,000

  Total (Without VAT 10%) 125,000

If the company applies discount 10% to customer from above sales report ,
and Mr. John get 10 % of commission from customer’s payment.
a) Compute sales volume in 5/2019 by Mr. John ?
b) How much of commission Mr. John can receive?

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How to calculate Sales volume?
What is sales volume ?
o Amount of invoice or amount
of payment
o Taxes or without taxes
Count the sale volume when ?
o Customer ordered?
o Goods are either shipped ?
o or customer paid for ?

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pensation plan.
Budget quotas
expense which are low
Profit quotas
 are set in order to
motivate salespeople
focus on the top line profit.
o quotas are rarely based on
bottom line profits
o Difficult to account for indirect
percentage to sales te
expenses
o Profits are usually configured
as gross margins minus some
load factor
Expense quotas
 Mainly used in
combination with other
Quotas mainly with sales
quota
 Supplement standards for
keeping expense in line
with sales volume.
 generally used in
percentage to sales term
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Activity Quotas
 salesperson is expected to do
some non-selling activity.
 Activity quota can be set on:
o total sales calls
o calls on prospects
o number of new accounts,
o product demonstration, etc.
 What is the most obstacle in
setting activity sales quota ?

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Use of the Various Types of Quotas

60%
Sales Volume Quota
55%

32%
Profit-based Quota
14%

28%
Activity Quota
14%

Large firms’ Sales > $40M Small firms’ Sales < $40M
Questions should be considered ?

 Should Salespeople be involved in setting

goals?
 Should everyone achieve the goals?
 Should be changed the quota?
 Reward for reaching part of a goal (80%
-90% -100% ….)

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The Process of Setting Good Goals
SMART format for establishing goals

S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based

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How to set up Good Goals

1 Set goals that are easy to understand, difficult to achieve, and have
exact deadlines for completion.

2 Important tasks not included as a goal may get ignored; if it’s

important, then set a goal for its accomplishment

3 Having too many goals can create stress, keep the number of goals
to a reasonable number; clarify importance for prioritization

4 Get reps to commit to their goals by explaining how they have been
set

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How to set up Good Goals

5 Clearly indicate how the sales performance will be measured and

rewarded

6 Provide feedback as frequently as possible; encourage reps to use

alternative approaches to sell if initial approaches don’t work

7 Make sure people know you have confidence in their ability to

achieve their goals

8 Failing to achieve a goal should not be viewed as failure, it should be

considered progress on the road to success

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Group exercise (15 minutes)

 Pick up one from any company below and discuss,

then present your results.
 Set up 4 sales targets for individual salesman,
explain reasons each goal you choose.
1) Credit specialist in the banking.
2) Real Estate Salesmen for luxury apartment.
3) Toyota salesman
4) Insurance Consultant
5) Vinamilk’s Salesperson
6) Unilever’s Salesman
7) Đong Tam tiles group
…
11-20
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