What could be the advantages and the disadvantages of having a sales quota?

The biggest advantage of sales promotions are that, if they are done correctly, they canstimulate and increase consumer purchases and develop or improve retailer ormiddlemen efforts to stock and sell a product. A sales promotion can be coupons, gifts,samples, in-store promotions, contests or sponsorship of special events (sporting events,fairs, etc.) In markets where consumers may be hard to reach through regularadvertising channels, a sales promotion is necessary and very effective. Salespromotions are generally seen as fun and can have long-lasting ifavorable mpressions onconsumers.In addition, another advantage is that sales promotion activities may be narrowlytargeted to consumers and/or offered for only a short time before being dropped orreplaced with more permanent efforts.

One of the disadvantages is that the success of a sales promotion may depend on localadaptation. Since cultures have an impact on any type of advertising/promotion,marketers must ensure that the type of sales promotion they have selected for aparticular country is not a prohibited activity. Since some local laws do not permit freegifts, coupons, premiums or discounts, marketers must thoroughly research the countriesbefore undertaking sales promotions. Another disadvantage may be the cost of salespromotions. The up-front costs may be high; however successful sales promotions canreap rewards many times over in the long run. Companies just need to be able to makethe investment in the up-front costs....

Advantages

Sales quotas enable the management to estimate the total sales for the coming years. This helps to adjust the production schedule to meet the demand.

Sales quotas help the sales organization to judge the performance of each individual salesman, making monitoring easy.

 It becomes easier to locate weak and underdeveloped markets. Special efforts can be make in such areas to develop it.

 Sales quota creates interest in work and it is a device to stimulate the selling efforts of the sales force. Sales quotas are also useful in conducting sales contests. Performance of sales against the sales quota becomes the base for awarding the sales force.

Disadvantages

 Extending credit to unworthy customers: When sales quotas are fixed, the salesman, in a bid to achieve the quota, extends reckless credit even to unworthy customers. This may lead to accumulation of bad debts.

Unreasonable quota leads to loss of motivation: Sometimes, unreasonable sales quotas are fixed. In such cases, it leads to loss of motivation of the sales force. On the other hand, fixing easily attainable sales quota also poses problems as it may lead to idle capacity of an efficient sales force.

 Identical quota leads to frustration: Sometimes, identical sales quotas are fixed for all salesmen, irrespective of seniority of the sales force or potentiality of a market. This may lead to frustration among salesmen.

 

Without sales quota , god knows better where company will land up and how long it will last.

Its like, If you do not know your target , you will land up anywhere.

Individual sales target figure assigned to each sales unit such a sales person, dealer, distributor, region, or territory, as a required minimum for a specified period (month, quarter, year). Sales quotas may be expressed either monetary terms or in number of goods or services sold.

On sales target  and forecasting companies plan all other activities like Advertising , Marketing , Manpower requirement , financial needs , transportation , warehousing , production and various other day to day activities.

I do not find anything negative in sales quota if it is based on area, population , manpower , past performances , expected investments , competition activities, potential of assigned area along with expectations from sales team.

 

..............................FOLLOWER.......................................

Disadvantages  could be "pressure". Pressure to meet your quota in a certain period of time. 

Advantages could be "goal". Now that you know your target sales quota more or less you already know how to meet it. You can allot your time to meet them the soonest you can.

But for me everything is just perspective. If you let your quota be a disadvantage to you then you are just making it harder for you to meet it. Why not look at it as a challenge. You know yourself better than anyone. If you think that you cannot make it in time then double your efforts for you to meet the demands you are asked for.

I agree with the answer my friends

i think sales is depend on your speaking and convincing level so if you have full confidence on your self then there are just advantages of sales quota......  

Sales run the organisation so it is essential for the organisation to have sales targets for a financial year and these are in line with the revenue requirements of the organisation.Sales targets fulfilled will have positive impact on company and so the people driving sales are rewarded for fulfilling sales targets and if company is unable to deliver targets it has negative impact on business and so company and thus people driving sales.

Sales quotas enable the management to estimate the total sales for the coming years. This helps to adjust the production schedule to meet the demand.  The disadvantage is when sales quotas are fixed, the salesman, in a bid to achieve the quota, extends reckless credit even to unworthy customers. This may lead to accumulation of bad debts.

A sales quota is a target essentially and the advantages of having a target or a business goal is that it creates motivation,direction and vision. No work can be done at its best without being passionate and enthusiastic about it , It is easier to generate enthusiasm and focus in your work if you have a vision of your goal that you could channel it towards.

A sales volume-based quota system is a prominent goal-setting method used in many sales organizations. Companies use quotas to set expectations for sales employees and to establish rewards for high performing salespeople and consequences for low performing salespeople.

 

Incentive Connection

A primary advantage of having a sales quota system to measure performance is that a sales manager can easily link this system to a motivation and rewards programs for sales employees.

Flexibility

Sales managers can set quotas based on the level of experience of given employees. They can also establish sales quotes for sales teams. 

Resistance

Sales volume quotas add significant pressure to the salesperson, which may affect his ability to sell with relaxed confidence and enthusiasm.

Turnover

Another drawback of a quota system is that management faces a serious predicament if talented salespeople fail to meet established quotas. If employees do not face some type of consequence, and eventually the possibility of job loss for not meeting expectations, it becomes difficult to maintain legitimacy of the sales quota system. 

Pressure Selling

Another major potential drawback of a poorly managed and balanced sales volume quota system is the propensity of salespeople to get too aggressive with prospects. High-pressure selling tactics of the past gave selling a negative stigma. 

Unrealistic Sales Quotas

Sales goals give a salesperson a level to achieve, but when they are set too high, they can hurt morale.

No Adjustment For Market Conditions

In a poor economy, many companies reduce spending, which will affect salespeople's ability to meet sales quotas. A sales quota may be a disadvantage to a salesperson if he loses even one important customer because of the economy

Punitive Sales Quotas

A sales manager may use a sales quota as a punitive measure for a salesperson who consistently fails to reach his sales goals. 

Selling to the Quota

The ability to generate sales leads, build relationships and close sales varies from salesperson to salesperson. Some individuals may look at meeting a goal as a stopping point, allowing them to slack off for the rest of the sales period.

 

More or less, I am not in favor of setting sales quotas especially for products which require relationship fostering with the customers rather than just treating them as sources of your income.