Setting the Sales Quota

All sales representatives will be given targets and quotas that need to be reached. Sometimes it will be for a week and these can be hard to beat. Monthly, quarterly and annual ones are a little easier, as there is time to make up for a barren few days. Certain companies will set a specific number of sales, while others will want them to bring in a certain amount of money. For a sales representative’s ego, it will be the thing that keeps them driven, and for the company management the way that their importance to the company can be measured.

When setting sales quota, the managers must be realistic. If they set them too high, the representatives could fail and if nothing else lose confidence in what they are doing. A basically good salesperson could be lost due to unrealistic expectations. If the target is too low, money can be lost and a representative can be given an easy ride. It will be in the managers’ best interest, as they will be judged by the overall actions of their team.

Things to Consider

If it is a weekly or monthly target that is being set, the manager should take several things into account before releasing figures. This will include: –

  • The amount of days that will be worked. If there are either national holidays or the rep has leave booked, this will give them less time to hit the target. Even a day or two less than expected can mean the target will not be reached.
  • Holidays in general – over Christmas and during the summer a lot of people will be on holiday. It will be unfair to penalize a sales agent who missed their target because the decision makers in other firms are not available to place orders.
  • Seasonal needs. If the product is geared towards hot weather then clearly the figures expected will be higher in the summer than the winter. The same will apply in winter. How many people will buy sun-cream in winter and Christmas cards in July?

There are figures that show that more than 2/3rds of sales people are not able to hit the targets that they are given. Almost a quarter of companies are not aware if their sales reps hit targets or not. This could be catastrophic to the fortunes of the firms involved and needs to be addressed as soon as possible. If the data is wrong, it will be hard to issue the correct sales quota to staff.

A major problem for sales managers is the fact that they have a lot to do and issuing and monitoring quotas is not always on the top of the list. Having the right tools and data will help a lot and the job will be much easier.  CRM can help here as it will put all the data in order and allow accurate monitoring. Issues can be identified and corrected before they get out of hand.

Remedies and Ways to Track Sales

  • Track the number of calls that the agent make as well as emails sent. Then, measure this against the amount of sales and the profit made. This way you will know what it takes to make a sale, and whether it is the calls or emails that lead to a greater profit.
  • Encourage a change to the one that yields the most, although research has shown that there will only be around 32 sales options for every 1000 calls made. If this is the case for your company, then it will be best to check the source of the leads that the reps receive.
  • Try to deal more with previous and repeat customers as well as companies in the same sort of area. Cold calling is much less effective for hitting sales quotas than contacting someone with a genuine need for the product or service you offer.
Setting the Sales Quota