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Individual sales target assigned for specific period is basically sales quota, it may be based on individual to team or based on area, territory to country level. Purpose of sales quotas are as followings:
To indicate strong or weak spots in the selling structure
To furnish goals and incentives for the sales force
To Control salespeople activities
To evaluate productivity of salespeople
To improve effectiveness of compensation plans
To control selling expense
To evaluate sales contest results.
Types of sales quotas are divided basically as followings:
Volumes based, Profit based and combination.
The Sales quota is actually the quantitative goals set by managers for a sales person or sales team.
- Volume-based Quota: where targets are expressed in number of units or money.
- Sales Budget-based Quota: where targets are set by management to control expenses and make sales team understand that they are a responsibility center.
- Profit-based Quota: where targets are set based on net or gross profit. Usually sales people reject such quota's because they are not clear.
- A combination Quota: where two or more activities are combined together such as number of customer, percentage of reduction in sales expenses, number of orders per customer...
A time bound sales Target for specific salesperson.
