How to calculate a quota

Sales planning of a production or commercial organization through sales representatives is usually formed on the basis of many indicators, including quotas, which should be achievable, understandable, complete and timely.

Instruction manual

1

Set quotas for sales volumes below their potential potential, but approximately equal to the forecast results (or slightly higher). If you install them in order to stimulate sales growth at a too high level, then such a policy can be used only for a short time.

2

Set quotas so that they are understandable to employees who have to perform new tasks in accordance with them. Consider the following criteria when setting quotas:

- the experience of employees and their qualifications;

- the results of the quota for the previous period;

- demand for products;

- general market situation.

Without taking all these criteria into account, you will not be able to arouse staff interest in marketing goods and explain to them the need for new quotas. Designate a quota arrangement for each individual employee.

3

Consider the completeness of the quota, which should combine all the criteria according to which you will subsequently evaluate the activities of each sales employee. So, if sales representatives are tasked with finding customers, then it is necessary to indicate in the quota not only the approximate number of new customers, but also the percentage ratio with those who are already working on. If this is not done, then the employee will strive only to increase sales, working on beaten track. Better reduce quotas for fulfilling sales so that the employee’s work schedule has time to attract potential customers.

4

Set quotas in monetary terms, in the number of products or rating points. For sales of a new product, quotas should be higher than for the sale of an old one, so as to encourage employees to promote a new product or attract new customers.

5

Allocate quotas in accordance with the assessment of the potential of the territories. Take into account not only the potential indicators in numerical terms, but also the characteristic features of the market. Consider the psychological factor when hiring sales representatives. So, knowing about the peculiarities of sales in a particular territory, employees can consciously underestimate the sales potential in order to secure low quotas in the future.

6

Promptly inform all sales representatives about changes in the system for calculating quotas and the results of evaluating the work of each employee.