N5 Sales Management Example of an activity quota


3.4 Combination and point system quotas


These quotas control performance of both selling and non-selling activities. The quotas overcome the difficulty of using different measurement units to appraise different aspects of performance. Performance against combination quotas are determined as percentages, and these quotas are known as point systems – the points being percentage points. The different aspects of the sales job is weighted according to management’s evaluating of its relative importance and attaching different weights to them.


These quotas summarise overall performance in a single measure. Sales personnel may have difficulties in understanding them and in appraising their own achievements.


4. Administering the quota system


Skill in administering the quota system is basic, not only to realising the full benefit for control purposes, but to securing staff co-operation. Most critical is securing and maintaining acceptance of the quotas by those to whom they are assigned. Most salespeople oppose quotas, and anything that makes them doubt the accuracy, fairness and attainability of those quotas makes them less willing to accept them, thus reducing the system’s effectiveness.


4.1 Accurate, fair and attainable


Good quotas are accurate, fair and attainable. Obtaining accurate quotas is influenced by the quota-setting procedure, for example the more closely quotas are related to territorial potentials, the greater the chances for accuracy. Regardless of the type of quota, sound judgement is important in analysing market data, adjusting for conditions unique to each territory and appraising changes in personnel capabilities, as well as setting the final quotas.


Accurate quotas result from skilful blending of planning and operating information with sound judgement. Whether quotas are fair and attainable depends not only upon the quality of management’s judgement but upon the capabilities and motivation of sales force. The extent to which a salesperson’s quota is fair and attainable can only be ascertained after performance has been measured.


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