Quota Strategy

Posted in Marketing and Strategy Terms, Total Reads: 357

Definition: Quota Strategy

Quota strategy believes that the experience and performance of each and every representative must be considered, to increase the volume of sales and to create individual quotas.Several strategies are followed by different companies for the growth of small businesses. For the growth of such business having a quota strategy is more of an art than science. 

Strategies followed to increase sales:

• If you want more, ask for less: The volume of sales expected out a representative, the manager gives a lesser number to that representative as that number is usually hit and at times exceeded also.

Example: The best representative can sell 50 units of A7. The manager might set the quota at 65 units but instead he/she should knock it down to 45 units. This will push the representative to do a little more than what is expected and ultimately will hit 65 units or closer.

But if your organization rewards the representatives when they complete their goal, then it isn’t the best strategy to be followed.

• Compare results to the past performances: Forecasting is an important tool to know about the future performance of the business, but focus on results vs. history is better than results vs. forecast.

Example: The manager expected sales of 750 units of A7, but instead only the target of 735 units was reached. Instead of reacting to the situation and taking corrective action, the manager must check the sales done in the previous year and then compare, whether it has increased or decreased and then take the corrective measures.

• Sales representatives must prosper along with the company: The compensation and benefits of the company must be designed in a way, that when the company earns profits, the sales representatives also earns some reward as they are the ones who generate revenue for the organization. If the representatives are hitting quota consistently but not receiving any reward for the same, they would stop hitting the quota.



Looking for Similar Definitions & Concepts, Search Business Concepts