Fixing Sales Targets

Based on experience, refinements will have to be made in sales territories. Frequent meddling with territorial design is, however, not advisable. When conflicts between salesmen arise, when salesmen remain content with skimming the cream, when customer service standards go down, when some territories prove uneconomic, or when the demand in some territories grows at a very rapid rate, a review of the sales territories design is necessary.

Assigning Right Territories to Right Salesmen

Care is required in assigning the sales territories to individual salesman. Since territories will vary among themselves despite all attempts to equalize them, a conscious effort must be made to match the right salesman with the right territory, or the right sales skill with the right sales opportunities.

Maintaining Database on Territories:

In addition to the proper designing and proper assignment of sales territories, salesmen should also be helped in understanding their sales territories well. The organization must have a proper database on sales territories and must pass it on to the salesmen, giving them an idea of the general environment of the territory, customer data, potential of the territory market share, the problems peculiar to the territory as well as the advantages it enjoys. When such a picture on the territory is given in the beginning, salesman can start with a fairly accurate profile of their territories and carry on with their job with ease.

Sales quotas or targets set for salesmen/sales territories should reflect the firm’s personal selling objectives its overall sales plan, the size of the sales force and the nature of the sales territories. Sales quotas or targets are nothing but quantified objectives for salesmen. The quota should neither be too high nor too low. It should match what a good salesman can accomplish by putting in sincere efforts. The quota must be fixed, taking into account not only the potential of the territory and past sales, but also other factors such as the territory’s importance to the firm, the market share sought from it and the profitability of sales in that territory. The quota must be fixed using reliable techniques.

A Participative approach desirable:

Sales quotas should not be set arbitrarily, or on the whims and fancies of sales executive. A participative approach should be preferred. Each salesman must be encouraged and trained to forecast the demand in his territory and the sales quota that he can accomplish. Quotas must be fixed for each product line and each product line and each item, and be broken up month wise to facilitate effective monitoring and control of the sales effort and sales budget. Quotas should preferably be broken up over customers types and channel types as well.

Activity Quotas:

In addition to sales quotas, various activity quotas should also be fixed for salesmen. The number of sale calls, the number of dealer contacts, the number of displays and demonstrations, the number of new accounts to be brought in and the number of new dealers to be added on may form part of the activity quotas. Some firms set cost and profit targets in addition to sales and activity targets for their sales force.