2. Definition of quotas
• Sales quota represents a specific sales goal that an
individual is responsible for satisfying over a period of
time, in a given territory.
• Quotas measure and define the appropriate
accomplishment level desired from an individual.
• Defined in either rupees or physical units of a given
product, product line, or service
3. Quotas
•
Why use quotas?
• Provides a uniform comparison of individuals throughout
an organization
• Provides performance targets
• Provides standards
• Provides control
• Provide as a tool to change the direction of the sales
force
• Provide as a form of motivation
•
4. Developing quotas
• First ask why a quota may be of value
– Motivator?
– Basis for compensation?
– Tool for evaluating performance?
– Combination?
–
• What needs to be considered?
• Company and departmental objectives
• Customer mix
• Salesperson level of performance
• How diversified is the product line
• Long term vs. short term
• Environmental factors
5. Elements Important in Assigning Sales QuotasElements Important in Assigning Sales Quotas
• Concentration of Businesses within the Territory
• Geographic Size of Territory
• Growth of Businesses within the Territory
• Commitment by the Sales Manager to Assist the Sales Representative
• Complexity of Products Sold
• Sales Rep’s Past Sales Performance
• Extent of Product Line
• Financial Support (e.g., compensation) a Firm Provides
• Relationship of Product Line
• Amount of Clerical Support
7. Different types of quotas
• Sales Quotas
– Emphasis is place on volume
» Rupee volume
» Unit volume
» Point quota system
– Major problems
• Not focused on returns
• Not as focused on customer relationships
8. Different types of quotas
• Expense Quotas
• Percentage of the territory’s sales volume
• Set limit on rupees spent on
– Meals
– Lodging
– Entertainment
– Problems:
• If expense quotas are low then the sales force may not be able
to perform their jobs correctly.
9. Different types of quotas
• Profit Quotas
•
– The focus is on profits and not volume
– Gross margin
– Contribution margin
–
–
– Problems
– May cause the sales force to only sell the most
profitable items
10. Different types of quotas
• Activity Quotas- used to help ensure long-term goals
•
– Number of calls per day
– Calls on new accounts
– Dealer sales meeting held
– Proposals submitted
– Product demonstrations
11. Different types of quotas
• Combination Quotas- firms may use a combination of the
above types of quotas
13. Quantitative Performance Measures
Output related measures
• Sales revenue achieved
• Profits generated
• Percentage gross profit margin
achieved
• Sales per potential account
• Sales per active account
• Sales revenue as a percentage of
sales potential
• Number of orders
• Sales to new customers
• Number of new customers
Input related measures
• Number of calls made
• Calls per potential account
• Calls per active account
• Number of quotations
• Number of calls on prospects
14. Hybrid quantitative ratios
• Strike rate = No. of orders / No. of quotations
• Sales revenue per call ratio
• Profit per call ratio (call effectiveness)
• Order per call ratio
• Average order value = Sales revenue / No. of orders
• Prospecting success ration = No. of new customers / No. of
prospects visited
• Average profit contribution per order = Profits generated / No.
of orders
15. Qualitative Performance Measures
Includes the ability
• To do the entire selling job
• To service existing customers
• To locate and secure new customers
• To help intermediaries to sell on to users
• To provide technical advice
• To train retailer salespeople
• To provide information to customers and users on product changes and
promotional support
• To secure display space and adequate stock with intermediaries
• To collect market and competitive information
• To be ambassadors for the company.
16. …other qualitative measures
• Attitude
• Product knowledge
• Selling skills
• Appearance
• Customer Knowledge
• Competitor and market knowledge
• Report writing and administration
• Company image and goodwill
18. Definition of quotas
• Sales quota represents a specific sales goal that an
individual is responsible for satisfying over a period of
time, in a given territory.
• Quotas measure and define the appropriate
accomplishment level desired from an individual.
• Defined in either rupees or physical units of a given
product, product line, or service
19. Quotas
Why use quotas?
• Provides a uniform comparison of individuals throughout
an organization
• Provides performance targets
• Provides standards
• Provides control
• Provide as a tool to change the direction of the sales
force
• Provide as a form of motivation
20. Developing quotas
• First ask why a quota may be of value
– Motivator?
– Basis for compensation?
– Tool for evaluating performance?
– Combination?
• What needs to be considered?
• Company and departmental objectives
• Customer mix
• Salesperson level of performance
• How diversified is the product line
• Long term vs. short term
• Environmental factors
21. Elements Important in Assigning Sales Quotas
• Concentration of Businesses within the Territory
• Geographic Size of Territory
• Growth of Businesses within the Territory
• Commitment by the Sales Manager to Assist the Sales Representative
• Complexity of Products Sold
• Sales Rep’s Past Sales Perfor a ce
• Extent of Product Line
• Financial Support (e.g., compensation) a Firm Provides
• Relationship of Product Line
• Amount of Clerical Support
22. Different types of quotas
• Sales Quotas
• Expense Quotas
• Profit Quotas
• Activity Quotas
• Combination Quotas
23. Different types of quotas
• Sales Quotas
– Emphasis is place on volume
» Rupee volume
» Unit volume
» Point quota system
– Major problems
• Not focused on returns
• Not as focused on customer relationships
24. Different types of quotas
• Expense Quotas
• Perce tage of the territory’s sales volu e
• Set limit on rupees spent on
– Meals
– Lodging
– Entertainment
– Problems:
• If expense quotas are low then the sales force may not be able to perform
their jobs correctly.
25. Different types of quotas
• Profit Quotas
– The focus is on profits and not volume
– Gross margin
– Contribution margin
– Problems
– May cause the sales force to only sell the most profitable items
26. Different types of quotas
• Activity Quotas- used to help ensure long-term goals
– Number of calls per day
– Calls on new accounts
– Dealer sales meeting held
– Proposals submitted
– Product demonstrations
27. Different types of quotas
• Combination Quotas- firms may use a combination of the
above types of quotas
29. Quantitative Performance Measures
Output related measures
• Sales revenue achieved
• Profits generated
• Percentage gross profit margin
achieved
• Sales per potential account
• Sales per active account
• Sales revenue as a percentage of
sales potential
• Number of orders
• Sales to new customers
• Number of new customers
Input related measures
• Number of calls made
• Calls per potential account
• Calls per active account
• Number of quotations
• Number of calls on prospects
30. Hybrid quantitative ratios
• Strike rate = No. of orders / No. of quotations
• Sales revenue per call ratio
• Profit per call ratio (call effectiveness)
• Order per call ratio
• Average order value = Sales revenue / No. of orders
• Prospecting success ration = No. of new customers / No. of
prospects visited
• Average profit contribution per order = Profits generated / No.
of orders
31. Qualitative Performance Measures
Includes the ability
• To do the entire selling job
• To service existing customers
• To locate and secure new customers
• To help intermediaries to sell on to users
• To provide technical advice
• To train retailer salespeople
• To provide information to customers and users on product changes and
promotional support
• To secure display space and adequate stock with intermediaries
• To collect market and competitive information
• To be ambassadors for the company.
32. …othe ualitative measu es
• Attitude
• Product knowledge
• Selling skills
• Appearance
• Customer Knowledge
• Competitor and market knowledge
• Report writing and administration
• Company image and goodwill
34. Starting Exercise
• Does selling come naturally?
• Are salespersons born or can they be developed?
• What makes a good salesman?
• What are the essential selling skills that makes a
salesman successful in sales?
35. What Does a Salesperson Do?
• Creates new customers
• Sells more to present customers
• Builds long-term relationships
• Pro ides solutio s to usto er’s pro le s
• Provides service to customers
• Helps customers resell products to their customers
• Helps customers use products after purchase
• Builds goodwill with customers
• Provides company with market information
36. Attributes of Sales person
• Behavioral and mental characteristics by means of
which an individual is recognized as being unique.
• Desirable attributes:
• Enthusiasm
• Confidence
• Intelligence
• Self-worth
• Knowledge
• Skills
• Communication skills
• Listening skills
• Matching skills
• Conflict resolution, Persuasion and negotiation skills
37. 4 FACTORS FOR SUCCESS
• KNOWLEDGE
– Own product
– Own company
– Own territory
– Competition
– Customer
– Market Place
• EFFECTIVE COMMUNICATION
• PLANS
• DIFERENT TARGET SEGMENT
38. The Salesman . . . .
• The Good Salesman..
• Honest
• Admits mistakes
• Solves problems
• Friendly but professional
• Dependable
• Adaptable
• Well-prepared
• Patient
• K o s the usto er’s
business
• The Bad Salesman..
• Walks in without
appointment
• Fails to ask about needs
• Lacks product knowledge
• Puts do o petitor’s
products
• Has poor listening skills
• Makes too many phone calls
• Does not follow-up
• Gets personal and pushy
39. The salesman and the customer
• Modern-day sales rests on building a good relationship with
customers.
• The relationship becomes long-term when it is built on mutual
trust.
• Trust between salesman and customer depends on:
– Truth of words communicated by the salesman
– Predictability of action
– Competency (ability/knowledge/resources)
– I te t or e pathy ( uyer’s i terest upper ost, pro le -solving,
responsive, etc)
– Likeability
40. Types of Personal Selling
• Broadly classified into
– Industrial Selling
– Retail Selling
– Services selling
• Salesperso ’s approa hes ary due to i here t
differences in the selling type.
• Differences are linked to
– Custo er’s hoi e eha ior
– Importance the customer gives to the purchase
– Risks involved in buying the product
41. Industrial Selling
• Manufacturing sector selling or B2B Selling
• Using consumer as base, can be grouped into:
– Selling to Resellers
• An intermediary who buys to resell
– Selling to Business Users
• A producer who buys to use as input to his product
– Institutional Selling
• A firm which uses the product in their daily operations
– Selling to Governments
• Where the government /undertakings and its employees are the
ultimate consumers
42. Retail Selling
• Retailing: all activities directly related to the sale of
goods and services to the ultimate consumer for
personal or non-business use or consumption.
• Features:
– Buyers seek the sellers
– Buyers buy in bulk to sell in smaller assortments
– Effected at the level of a retailer, a dealer or a wholesaler
43. Services Selling
• Services: activities or benefits provided to
consumers
• Four unique characteristics
– Intangible
– Inseparable from their sources
– Cannot be stored for future use
– Individualised
44. Selling Situations
• Maintenance Selling
– Servicing existing accounts, securing promotional co-
operation, counting inventory, taking replenishment
orders, delivering the products.
– No prospecting involved.
• Developmental Selling
– Prospect from leads, qualifying potential buyers, securing
specifications and approvals for the purchase, closing the
sale with actual order.
– Seek potential customers and get order.
