Page 102 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Sales and Promotions Management

Notes (b) Previous year’s revenue: the total revenue generated from sales of all products from
various sales territories
(c) Industry standards: performance of the competitors in the industry

(d) Territory analysis: the quantity that a salesperson thinks can be sold in his or her
territory based on the existing pipeline and recent successes
The best practice is to include several of these parameters while taking a decision.

Example: The sales manager might look at past trends while the sales team goes through
records for a detailed territory analysis.
2. Add the percentage of growth expected: At this step, the sales head and the sales managers
predict revenues for the next year. After that, they convert that expected revenue into
quotas for sales force. The expectation should be realistic and challenging.

Example: Suppose last year’s sales figure achieved was 1 Crore from Sales Territory A.
The sales managers can keep the sales quota for the current year for the territory as 1.2 Crore (a
20% growth).
3. Allot individual quotas to each sales personnel: The next step is to divide the total revenue
expected or the total sales quota by the number of salespeople to define the quota for each
person. While doing this the sales managers should keep in mind that not all salespeople
have equal capabilities and not all sales territories are created equal. They should consider
the caliber of each salesperson individually before determining the appropriate quota to
assign. They should consider the following factors before assigning quota:

(a) Experience of the salesmen: Salesmen who have more experience of selling for the
organisation and those who have well-developed pipelines and contacts within
their territories are assigned a higher quota. They are likely to sell more than those
who are new to the organisation and have lesser experience.

(b) Assigned job: The nature of job is also considered while assigning quotas. The potential
for sales of telemarketing personnel may be different from that of field sales force.
(c) Sales skills: Sales aptitude and sales skills also differ from person to person. People
with better sales skills and more assertiveness are more likely to result in higher
sales results.
(d) Market potential: Like salesmen, each territory is also different in its needs.

(e) Competition: In some territories, the competition may be strong and thereby reduce
the potential for sales. In other territories, competition may be weak or non-existent.
After analyzing all these factors, the sales managers can determine the right quota for each
salesperson.
4. Make sure that the sales quotas are well understood by your sales team: Sales managers
should explain how these quotas are decided and how can the sales team go about achieving
them. It is upto the leaders to make the sales team believe that these goals are achievable.
If they are assured, then they can work toward meeting or exceeding their assigned quotas
otherwise they might resist them.
5. Adapt quotas to market realities: The sales managers and the sales team must keep a track
of the economy and the changing market conditions. Changes in market conditions are
inevitable. With the changing market conditions, quotas may have to be changed

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