Sales & Distribution Management

Sales
Quota
Group I
“How you sell matters.
What your process is
matters. But how your
customers feel when
they engage with you
matters more.”
– Tiffani Bova
 Get to Know Our Team

Chaitanya Aayushi Anshuman

Vijayvargiya Moonka Mishra
 What Is a Sales Quota?
JUMP TO SECTION Sales Quotas vs. Sales Goals: What’s
the Difference?
TOPICS TO BE COVERED Why Are Sales Quotas Important?
5 Types of Sales Quotas
How to Set Sales Quotas
What Is a
Sales Quota?
A sales quota is a set number of
sales or a specific revenue
amount that a sales
management team establishes
for a company. Sales managers
assign these sales quotas to a
sales team or individual
salespeople.
Sales Quotas vs.
Sales Goals: What’s
the Difference?
Sales quotas are not the same as sales goals. A sales goal tends to
be an aspirational projection based on past performance in a prior
quarter or in the last year. Sales quotas also involve forecasting, but
they tend to be fixed requirements that are tied to a sales rep's
compensation plan. If the sales rep hits their sales performance
quota in a given period of time, they receive compensation linked to
those sales activities.
Why Are Sales
Quotas Important?
Ensure compensation plans
(including commissions) are fair
and effective
Reveal weaknesses or bottlenecks
in the sales pipeline
Highlight successful reps and
replicate their sales techniques
Monitor and regulate selling
expenses
Create achievable goals and
benchmarks
 5 Types of Sales Quotas

01 02 03 04 05
Sales Profit Revenue Activity Quotas
Volume Quotas Quotas Quotas Combinations
Quotas
 Volume quota: A volume quota is a sales quota that rewards sales reps
for the number of deals or qualified leads they generate, regardless of
deal size.

5 Types of Revenue quotas: This type of sales quota rewards gross revenue. If a
team member only makes a single sale in a given timeframe, but the sale
generates massive revenue, the sales rep can still meet a manager's sales

Sales
quota.

Profit quotas: A profit quota is similar to a revenue quota, but it considers

Quotas
the net income of sales activity. That is to say it calculates gross revenue
minus selling expenses. This incentivizes sales reps to work efficiently in
their sales calls and meetings.

Activity quotas: This type of quota rewards volume of activity, such as

Sales managers employ a wide requiring a certain number of phone calls (including cold calls and follow-
array of quotas to motivate ups), as well as various tasks in a consumer relationship management
(CRM) system.
employees in the sales process.

Combination quota: A combination quota combines multiple sales metrics

to reward different kinds of success in the sales pipeline. Different
companies and different managers may employ their own templates for a
combination quota.
How to Set Sales Quotas
Top-down sales quotas
In a top-down approach, sales managers
and executive teams set quotas based on
the company's revenue needs. They look at
quantitative trends in the marketplace,
identify needed growth, and set sales
quotas based on data analysis and their
aspirations for the company. Salespeople
are then responsible for meeting these
quotas to ensure that the company
generates as much revenue as anticipated.
Bottom-up sales quotas
Sales managers can also use a bottom-up
approach to sales quotas; in this model,
forecast quotas are based on the
salespeople's past performance. This helps
managers set reasonable goals and keep
morale high, while still rewarding their
team's sales leaders. Bottom-up sales
quotas may be less ambitious in the short
term, but they can be powerful tools for
long-term employee retention.
Thank You
Group I