This document outlines procedures for setting sales quotas and managing sales territories. It discusses defining quotas based on past performance, industry standards, and territory analysis. Quotas are then assigned to individual salespeople based on their experience, skills, and market potential. The document also describes approaches for designing sales territories, including considering market demand and salesperson workload. Maintaining and revising territories involves factors like customer needs, salesperson abilities, and management decisions. Effective territory management includes routing salespeople efficiently and scheduling customer visits.

1. Sales Quota and Quota
Setting Procedure
Gopal Thapa

2. Sales Quotas
• A sales quota refers to an expected routine
assignment to sales units, such as territory, districts
and branches, etc.
• Sales quotas are also assigned to individual
salespeople over a particular time period and are
used to plan, control and evaluate the selling
activities of a company.
• Sales quotas serve several purposes.

3. Objectives of Setting Sales
Quotas
• Quotas provide performance targets
• Quotas provide standard
• Quotas provide control
• Quotas are motivational

4. Types of Sales Quotas
• Sales Volume Quotas
 Product line
 Product range
 Sales division
 Sales Territories
 Sales districts
 Branch offices
 Sales force (individual
• Profit Quotas
• Expense Quota
• Activity Quotas

5. Types of activity quotas
• Number of sales presentations made
• Number of service calls made
• Number of dealers visited
• Number of calls made for recovery
• Number of new accounts opened

6. Quota Setting Procedure
• Set the parameters for developing quotas
(a) Past trends: the quantity of specific product lines
that were sold in various sales territories over time
(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

7. Quota Setting Procedure
• Add the percentage of growth expected:
• Allot individual quotas to each sales personnel:
 Experience of the salesmen:
 Assigned job
 Sales skills:
 Market potential:
 Competition

8. Quota Setting Procedure
• Make sure that the sales quotas are well
understood by your sales team
• Adapt quotas to market realities

9. Sales Territory Management
• A sales territory comprises of a group of customers or a
geographical area assigned to a sales unit.
• The territory may or may not have geographic boundaries.
• A sales territory represents a group of customer accounts, an
industry, a market or a specific geographical area.
• Territory management includes the market potential, number
of customer accounts, the firms experience and market share
in the territory, the capability of the salesperson assigned and
the frequency of sales calls made.

10. Activities of Territory
Management

11. Reasons for Setting Sales
Territories
• To obtain entire coverage of the market
• To establish a salesperson’s responsibility
• To evaluate performance
• To improve customer relations
• To reduce sales expenses
• To allow better matching of salesperson to customer
• To benefit salespeople and the company

12. Procedure for Setting up Sales
Territories
• Selecting a basic geographical control unit
• Determining sales potentials in control unit
• Combining control units into tentative territories
• Adjusting for coverage difficulty and reallocating
tentative territories.

13. Approaches used for designing
sales territories
• Market Build-up Approach
• The Workload Approach

14. Market Build-up Approach
• In this approach, an estimation of the present and
potential products/services demand is made by
looking at how the market is built up, who are its
present/potential users, how much do they consume
and at what frequency.
• In this approach, information from trade
directories, state publications, etc. is consolidated
and then aggregated to understand the market
potential for the product.

15. The Workload Approach
• Designed by WJ Talley on the basis of the workload
performed by salespersons
 Customers are grouped into class size according to the sales volume.
 Optimum call frequencies for each class of customers are estimated.
 Present and potential customers are then located geographically and
arranged volume wise and value-wise.
 The number of present and potential customers in each volume/value
group is then multiplied by the desired call frequency to get the total
number of planned calls required for each geographical control unit

16. Revising Sales Territories
• Situation I
Where sales potential of territories are equal but the
salesman differ in their abilities.
• Situation II
Where management designs sales territories in such a way
that sales potential of territories varies directly with the
ability of the sales person.

17. Reasons for Revising Sales
Territories
• Customer Related Reasons
• Salesperson Related Reasons
• Management Misjudgement

18. Alignment of Sales Personnel to
Territories and Routing
Straight Line Pattern
Clover Leaf Pattern
Hub and Spoke
Circular

19. Scheduling of Sales Personnel
• Scheduling refers to establishing a fixed time when the
salesperson will be at a customer’s place of business.
 It is planning a salesperson’s specific time of visits to customers
Proper routing and scheduling enables the salesperson to:
 Improve territorial coverage.
 Minimize wasted time.
 Establish communication between management and the sales
force in terms of the location and activities of individual
salespeople

20. Thank you
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