Welcome to the Rocket Singh Class

Dhruv Sood - 09999966971dhruvmax@gmail.com

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