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Territory Allocation and
Sales Quota
Disclaimer • I am not teaching you any rules or laws. So stay relax.• If you don’t speak, I don’t speak…..Interactivity is important .• Information shared here needs to be used as per Managerial
Judgments.• We are not making fun of any one …….will give respect to each
individual and its roll. • Questions are welcome at any stage.
BIG BOSS
JUNIOR BOSS
JUNIOR BOSS
SALES MANAGERS
Contact with Territory Different Designations
Senior Management Usually reporting to Top Management. Designations : VP and Above
Reporting to Senior Management Designated : AVP etc
GETS A SALES
TARGET & TERRITORY
SELL Rs 100 Cr. in
India
View Point of the Boss…..• I cant do it all alone .• Target needs to get achieved with the help of team • Usually he is a General Manager.• Division of Territories • Budgets• Compensation of Sales Forces• Incentive Schemes – Launching • Reviews of Middle Managers • Motivation – Positive & Negative .
KHARBOOJA KATEGA OUR SUB ME BATEGA
TIME FOR Territory Allocation
and Sales Quota
What is a Sales Territory • A sales territory is the customer group or geographical area • for which an individual salesperson or a sales team holds responsibility. • Territories can be defined on the basis of geography, sales potential,
history, or a combination of factors.
DIVISION & ALLOCATION OF SALES TERRITORY
Criteria for Dividing Sales Territories• Sales potential (Rs) = Number of possible accounts x Buying power
(Rs)• Workload (#) = [Current accounts (#) * Average time to service an
active account (#)] + [Prospects (#) * Time spent trying to convert a prospect into an active account (#)]• Coverage :This is size or travel time. The amount of time needed to
reach customers and potential customers."
BIG BOSS – •India
JUNIOR BOSS
JUNIOR BOSS
North West East South
GEOGRAPHICAL
Delhi Punjab Haryana HP UP
MaharastraGoaMP Rajisthan
Bengal Bihar ChattisgarhCalcutta
Kerela Tamil NaiduKarntaka
Coverage • Territory may be small so easy to cover. • When Territories are large : Complications increase• Uncertainty of travel• Cost of Travel : Train Vs Air Tickets , Hotel Categories. • Solution : Advance Planning , Rotating 45 day plans : Beat Plan
• Imbalances : Sales force want to travel to easy places. They over look the potential customers. • Some Territories are difficult to travel : Travelling within Delhi &
Travelling in Say Mountains : HP.
Who are the customers: Sales Models • Direct Sales • Individuals : You can sell to any one. Geography doesn’t matter. • Corporate/ Industry Verticals
JUNIOR BOSS
JUNIOR BOSS
North West East South
Corporate / Verticals
Agriculture – North Automobiles – North BPO – North Consumer Durables – North
SALES TERRITORIES WILL BE VERY DIFFERENT
• In-Direct Sales • Representative from the Company to chase sales from • Distributors / Dealers / Retailers
Advantages : Sales Territory• Improves market coverage
• Effective utilization of sales force
• Efficient allocation of work
• Accountability & Evaluate the performance
• Control over direct & indirect costs
• Optimum utilization of sales time
Conflicts • Its my property now: I have developed the territory so its my property
now.• Division or Re-allocation of the territory. • More difficult if linked to compensation or incentives.
Sales Target or Sales Quota
Types of Quota/Targets• Sales Volume Quota• Profit Quota• Expense Quota• Activity Quota• Quota Combination
What is Sales Target or Sales Quota• A sales quota is the sales goal set for • a product line • company division• sales representative.
• It is primarily a managerial device for defining and stimulating the sales effort.”. … (By Kotler)
BIG BOSS – •Rs.100 Crores •India
JUNIOR BOSS
JUNIOR BOSS
SALES MANAGERS - Rs.50 lacs each
Rs.25 Crores : North Rs.25 Crores : West Rs.25 Crores : East Rs.25 Crores : South
Simplest form of
Quota Allocation
Problems in setting sales quota
• Individual difference in every organization
• Perfect quota is a combination of selling and non- selling activities
• Improper attention to the non-selling activities (e.g. searching for prospects,
handling customer objections, and creating market for probable entry of new
products)
Setting Quota for Sales Team 1. Establishing Parameters for developing Sales Quota• Territory Potential • Past Sales Experience• Total Market Estimate• Executive Judgment• Compensations Plan
2. Add to this Growth Expectation and Predict Sales• Expectation should be realistic & challening .
Factors to Consider for Quota for Sales Reps• Consider his TENURE in the organisation• Assigned Job • His Sales Skill & Compensation • Market Potential • Competition
Get a Buy-in from the Sales TeamDiscuss the process used to Set the QuotaJointly Decide on the Quota.
To Motivate Desired Performance• Incentives – Cash & Kind – Gifts , Foreign Trips etc• Opportunity to Grow • Increase in Compensation
How to monitor Continuous Performance • Quota provides an opportunity to DIRECT & CONTROL sales activity of
the Rep.• Communicate Quota formally . Make sure its well understood by the
Rep.• Regular updates on Quota in One to One meeting – PRP . Helps on
analysis strengths and weakness. And Course correction at regular intervals• Regular Appraisals • Sales person needs regular encouragement , Advise and occasional
warning
CGPA – CUMULATIVE GREAT POINT AVERAGE• Companies are not focusing on ONE THING – example Sales• Organisation always issue – Key Result Area.• Weights are attached to KEY RESULT AREA on the relative importance
of KRA.• All of them are accumulated to give CGPA.• Appraisals are done on that basis.
Conclusions • Sales is a different game. • Very harsh and straight forward. • Organisation based on result orientation have tools to evaluate each
individual.• Tangibility of Sales • Rules of Sales may change with Fast Progress of Internet.• May be we will have to Unlearn what we have learnt till now.• Be open for Change …….Always
THANK YOU
