Page 178 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes Accurate, Fair and Attainable Quotas

Quotas should be accurate, fair and attainable. Obtaining accurate quotas is a function of the
quota setting procedure. Accurate quotas result from skillful blending of planning and operating
information with sound judgement. Setting a fair quota involves determining the proper blend
of sales potential and previous experience.
If management believes that its quota setting procedure produces accurate quotas and is confident
that fair quotas are being assigned, then they should be attainable.

Securing and Maintaining Sales Personnel's Acceptance

Management must make certain that sales personnel understand quotas and the setting procedure.
Conveying this understanding is a critical step in securing staff acceptance of quotas. If sales
personnel do not understand the procedure used in establishing quotas, they may suspect, for
example, that the quotas are a technique to obtain extra effort from them at no cost to the
company. This attitude destroys the quota's effectiveness as an incentive. It is important that
sales personnel understand the significance of quotas as communicators of "how much for what
period", but, if they also understand the quota setting procedure, they are more likely to consider
their quotas accurate, fair and attainable. The quota setting method should be simple enough for
sales personnel to understand, yet sufficiently sophisticated to permit acceptable accuracy.

Participation of Sales Personnel

If sales personnel participate in quota setting, the task of explaining quotas and how they are
determined is simplified. It is not advisable to turn the whole quota-setting job over to the sales
staff but some sales force participation can obtain more accurate and realistic quotas.

Keeping Sales Personnel Informed

Effective sales management keeps sales personnel informed of their progress relative to quotas.
Sales personnel receive frequent reports detailing their performance to date. This permits them
to analyse their own strong and weak points and take corrective action. Of course, sales personnel
need encouragement, advice and occasionally, warnings in deciding to take measures to improve
their performance.

Continuous Managerial Control and Review

In administering any quota system, there is a need for continuous monitoring of performance.
Arrangements must be made together and performance statistics should be analysed with
minimum delay.
Continuous managerial review and appraisal are required, since, for example, a quota that was
accurate, fair and attainable at the beginning of an operating period can prove totally unrealistic
in view of changing selling conditions. Flexibility in administering the system is important. If
a quota is unrealistic, it should be adjusted.
Administrative flexibility is desirable, but not too much. Small changes can be ignored; important
changes call for adjustments. Balance is needed between flexibility to every slight change and
inflexibility regardless of changes.

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