MODULE: II

Management of Sales Territory & Sales Quota: Sales territory, meaning, size,
designing, sales quota, procedure for sales quota. Types of sales quotas,
Methods of setting sales Quota, Recruitment and selection of sales force,
Training of sales force
SALES TERRITORY
A sales territory consists of existing and potential customers, assigned to a salesperson. Most
companies allot salespeople to geographic territories, consisting of current & prospective
customers.
According to Still and Cundiff - a grouping of customers and prospects assigned to an
individual salesperson.
A sales territory is defined as a group of present and potential customers assigned to an
individual salesperson, a group of sales persons, a branch, a dealer, a distributor, or a
marketing organization at a given period of time.
Major Reasons / Benefits of Sales Territories
• Increase market / customer coverage
• Control selling expenses and time
• Enable better evaluation of salesforce performance
• Improve customer relationships
• Increase salesforce effectiveness
• Improve sales and profit performance
Procedure for Designing Sales Territories
 STEPS INVOLVED:
✓ Select a control unit
✓ Find location and sales potential of present and prospective customers within each
control unit.
✓ Determine basic territories
✓ Assign salespeople to territories
✓ Manage territorial coverage.
✓ Evaluate and revise sales territories.

SELECT A CONTROL UNIT-

A control unit or a geographical territorial base is used for territory analysis.
Commonly used control units are States, metropolitan areas, cities, districts, towns
and pin code areas. Smallest control unit should be selected, for which market/sales
potential information should be available.
FIND LOCATION AND SALES POTENTIAL OF CUSTOMERS.
Identification and location possible and desirable for business customers, not
necessary for individual or household consumers. For business customers, total sales
potential of all customers in a control unit can be estimated through a market survey.
ABC analysis of business customers can be used to classify customers.
DETERMINE BASIC TERRITORIES
This is done by Build up method for (selective distribution) or Break down method
for (intensive distribution).
Build up method-
✓ Decide customer call frequencies
✓ Calculate total customer calls in each control unit
✓ Estimate workload capacity of a salesperson
✓ Make tentative territories
✓ Develop final territories, after discussing with sales people.
Objective is to achieve equalised workload for each sales person
Break down method
✓ Estimate company’s sales potential for total market
✓ Forecast sales potential for each control unit
✓ Estimate sales volume expected from each salesperson
✓ Make tentative sales territory
✓ Develop final territory after discussing with sales people
Objective is to achieve equal sales potential for sales territories.
 ASSIGNING SALES PEOPLE TO TERRITORIES
Sales Manager should consider two criteria:
❖ Relative ability of salespeople-Based on product knowledge, market
knowledge, past sales performance, communication skills and selling skills.
❖ Salesperson’s effectiveness in a Territory-decided by comparing social,
cultural and physical characteristics of the salesperson with those of the
territory. The objective in matching salespeople to the territories is to
maximise sales and profit potential of territories.

MANAGING TERRITORIAL COVERAGE

The sales Manager should do the following activities for managing territorial
coverage as follows;

❖ Planning of efficient routes for sales people-Routing is a travel plan used by a

salesperson for making customer calls in a territory.
Advantages of Routing
Reduction in travel time and cost
Improvement in territory coverage
Importance of routing depends on the following factors;
Nature of the product-important for FMCG
Type of job of salespeople- important for driver cum salesperson job, but creative
selling job needs a flexible route plan
PROCEDURE FOR SETTING UP A ROUTE PLAN
Step 1: Identify current and prospective customers on a territory map
Step 2: classify each customer into high, medium, or low sales potential
Step 3: Decide call frequency for each class of customer
Step 4: Build route plan around locations of high potential customers.
Computerised models have been developed. Commonly used routing plans are
 https://youtu.be/NaenpdCdHfU?feature=shared
❖ Scheduling sales people’s time
Scheduling is planning a salesperson’s visit time to customers. It deals with time
allocation issue.
How to allocate salesperson’s time?
• Sales manager communicates to salesperson major activities and time
allocation for each activity.
• Salesperson records actual time spent on various activities for 2 weeks
• Sales manager and salesperson discuss and decide how to increase time spent
on major activities
• Companies specify call norms for current customers, based on sales and profit
potentials, and also for prospective customers
Allocation of time
Customer calls-existing and prospects
❖ Time management tools for salespeople
Technology and equipment- desktops, laptops, smartphones, teleconferencing etc.
Inside salespeople- clerical support, technical support, telemarketers.
Outside salespeople - can then spend more time getting more orders & building
relationships with major customers. Outside salespeople travel outside the
organisation

EVALUATING SALES TERRITORIES

❖ Set performance standards or goals for each sales territory
❖ Measure the actual performance of the sales territory
❖ Compare the actual performance with the goals
❖ If the goals are achieved, the sales manager appreciates and recommends rewards to
the salesperson
❖ If not, corrective actions are discussed and implemented.
Revising sales territories
Sales manager should review their sales territories once a year, due to
❖ Change in selling time and activities
❖ Overlapping of sales territories
❖ Faster growth of sales potential than expected
https://youtu.be/sWwLyofqVSA?feature=shared

SALES QUOTA

Sales quota is the minimum sales goal for a set time span. Sales quota can be
individual or group based e.g. for a business unit or a team.
A sales quota is an achievement benchmark set for sales individuals and teams. This
goal is usually time-specific and must be achieved by the end of the month, quarter, or
year.
Sales goals Sales target Sales quota
Aim The overall growth of Sales targets are Sales quotas are well-
the company usually assigned to defined revenue quotas
determines sales goals. teams, where the team or volume quotas that
is responsible for an individual needs to
achieving a part of the complete in a specific
sales goal. period.
Planned by Higher management Sales VPs or Sales Sales managers assign a
Leaders determine the sales quota to their
sales target for sales sales reps based on past
managers based on performance and
territory or product potential. The sales
lines. quota is not the same
for each rep.
Execution The sales goal is Sales managers ensure The salesperson must
transformed into that the entire team ensure that his quota is
numbers and broken meets the sales target met within the quarter,
down into targets. by breaking it down otherwise, they lose out
These targets are split into dynamic sales on their commissions.
across all the sales quotas and providing
teams. additional incentives.
TYPES OF SALES QUOTAS
1. Volume Sales Quota
This sales quota focuses on the number of units or products you need to sell within a
specific time. It’s like aiming to sell a certain quantity of gadgets or widgets – the
more you sell, the closer you get to hitting your volume quota. Achieving this sales
quota shows your ability to drive sales volume and reach a broader customer base.
Volume Sales Quota Example
Your volume quota could be selling 100 smartphones in a month. The more phones
you sell, the closer you get to meeting your quota
Example:
A car salesperson must sell at least ten cars this quarter. His commission per car sold
is 10% and $10,000 extra on meeting his quota. For an average car value of $40,000,
the salesperson will make $50,000 ((10 cars * 40,000 * 10%) + 10,000) in
commission
Suitable for:
• Fixed price products with limited room for negotiation
• Products with short sales cycles
• Businesses that want to improve market penetration
2. Revenue Quota
Revenue quota is all about the money! It sets a target for the total sales value you
need to achieve.

Think of it as reaching a specific dollar amount in sales – the more revenue you
generate, the better you perform against your quota. This sales quota emphasizes your
capability to close high-value deals and drive substantial profits for the company.
Revenue Sales Quota Example
If your revenue quota is $50,000 in a quarter, you aim to generate that amount in
sales. Achieving this target means you’ve hit your revenue quota.
Suitable for:
• Businesses with multiple product lines that allow salespeople to cross-sell
products.
• Companies in the maturity phase, where the aim is to maintain market share
and increase profitability.
• Products/ services purchased recurrently .
3. Activity Quota
Your activity quota measures the number of actions you take to close a deal. It
includes tasks like calls, emails, and meetings. This sales quota keeps you active and
engaged, ensuring you’re consistently putting in the effort to reach your goals.
Achieving this sales quota indicates your dedication to putting in the required effort
and staying proactive in your sales approach.
Activity Sales Quota Example
An activity quota might require you to make 50 cold calls, attend 10 client meetings,
and send 100 follow-up emails each week. Meeting these activity goals shows your
dedication to the sales process. This model also works great for training new sales
employees and maintaining CRM hygiene.
Before implementing this quota, you must have a sales management tool like a Sales
CRM that helps you track and review all the activities.
Suitable for:
• Companies that have a well-defined sales process
• Sales processes that focus on outbound sales
• Sales roles that are closely aligned to lead generation, like SDRs and BDRs
• Computer software, retail banking, and insurance industries.
4. Profit Quota
Profit quota focuses on the money you make after deducting expenses. It’s like aiming
for a specific profit margin on each sale. The higher your profit, the more successful
you are in meeting this quota. This sales quota highlights your ability to drive sales
efficiently and maximize profitability for the company.
Profit Sales Quota Example
For a profit quota, you aim to achieve a 20% profit margin on each sale. Hitting this
margin means you’ve successfully met your profit quota.
The only drawback here is that it complicates quota management because the
additional variable expenses need to be tracked too
Example:
For a deal worth $10,000, where the cost of goods is $4,000 and the overall selling
expense is $2,000, the gross profit will be $4,000 ($10,000 – ($4,000+$2,000)). A
salesperson must make five such deals to reach his monthly quota of $20,000.
 Suitable for:
• Fast-growing and high-volume businesses
• Limiting over-the-top selling expenses
• Decreasing Cost of Customer Acquisition (CAC)
5. Combination Quota
Some salespeople may have more than one quota. A combination quota might include
an activity quota and a profit quota. A combination strategy gives reps a roadmap to
success and provides smaller milestones to make their quota more easily attainable
Combining 2-3 plans to create an intensive quota for your team keeps them on their
toes. You can also use gamification to make it more interesting.
Each quota has its setbacks but pairing the ones that complement each other balances
them out.
Example:
A salesperson’s monthly quota requires them to make 200 calls, close five deals, and
generate $5000 in profits as a part of their combination quota.
Suitable for:
• Most businesses that intend to grow sustainably
• Well-defined sales process
• Companies that use a CRM to track different kinds of metrics

METHODS OF SETTING SALES QUOTAS

The sales quota is determined in many ways. 4 important methods of setting sales quotas are
discussed as follows:

✓ Top Management Downward method

✓ Territorial Estimate Upward method
✓ Combination of Top Management-Downward and Territorial Estimate-Upward
method
✓ Past Performance Method

1. Top Management Downward method

In this method, the management and executives, with their experience and judgement,
estimate the total sales for the next year. Sales executives having enough experience in the
sales are given the responsibility of setting such sales quotas. This method is sometimes
called guess work quota method because it is estimated on the basis of executives’ guess
work.

2. Territorial Estimate Upward method

This method is known as grassroots approach. In this method, the salesmen are asked to make
estimation of sales of their territories for the coming years. The branch managers make
adjustments in the salesman’s estimates. The district and divisional sales managers make
further adjustments of salesman’s estimates with the cooperation of sales force. Finally, all
such sales estimates are grouped and the sales estimate of the entire sales field is prepared.

3. Combination of Top Management-Downward and Territorial Estimate-Upward

method

In this method, the above two methods of estimating sales quotas are combined. At the
headquarters, the management by their past experience and judgement estimate the sales
quota. At the grassroots level, the salesmen are asked to make their own estimates. Next, an
overall estimate for the entire sales operations of the company is prepared based upon both
the estimates. Then the estimate is divided into territories, products and salesmen.

4. Past Performance Method

Under this method, sales estimates are made keeping in view the past sales performance and
the total sales estimate for the future is made by increasing the sales by a certain percentage.
The increase is also made keeping in view of the competition, advertisement, economic
condition, price of the product, etc. Then this total estimate is divided into sales quotas for
each division, district, branch and individual salesman.

Hiring, Recruitment, and Selection of

Salesforce/Sales Personnel

Hiring refers to the process of locating, evaluating, and forming a working relationship with
potential salespeople. However, salesforce recruitment is the process of identifying possible
applicants and motivating them to apply for a current or anticipated position in a sales
organization, whereas salesforce selection is the process of selecting the appropriate
salesforce from a shortlist of candidates.

Recruitment of Salesforce/Salesperson
Salesforce Requirement Analysis-It is the prime responsibility of the sales manager to
implement a personal selling strategy in terms of both the kind and number of sales personnel
needed to service the company’s customers and prospects.

Determining Recruitment Budget and Amount of Time- The sales manager must establish
the recruitment budget and amount of time to spend on attracting and hiring excellent
individual salesforce in collaboration with the recruitment department. The recruitment
budget should be set aside to search for, discover, and interview candidates for the job.

Analysis of Factors Affecting Recruitment Efforts

• Size of the company (In terms of the salesforce)

• Lower wages paying firms/companies
• Employment condition of the local community
• The effectiveness of past recruiting efforts
• Working conditions and environment
• The total package of salary benefits (if permanent recruitment)
• Slow growing companies, downsizing problems, and lay-off problems facing
companies

Job Analysis- Job Analysis is an activity that the sales manager does to develop a statement
that includes the job description and sales personnel’s specifications. This means the sales
manager has to prepare two separate statements that will help to analyze jobs that recruitees
will have to perform with their knowledge, skills, and experiences if they are selected later
on.

Preparing Job Description:

While preparing an accurate job description, the sales manager uses his/her knowledge, skills,
experiences, etc. Generally, a job description consists of the following factors:

• Title of the job.

• Job position.
• Location and territory to be covered.
• Duties and responsibilities.
• Degree of autonomy.
• Accountability to whom report.
• Salary and compensation.
• Facilities and equipment to use.
Preparing Salesforce/Personnel Specification:

Salespersons/salesforce/ sales personnel job specification is the statement that determines the
qualities looked for in the new person to perform and discharge in accordance with the job
description. Basically, this statement contains the following:

• Education
• Sales training (both technical and non-technical)
• Sales experience
• Communication skills
• Honesty and integrity on the job
• Willingness to work with spirit
• Business sense
• Confidence in making sales
• Product knowledge
• Intelligence while encountering
• Self-determination
• Motivation
• Appearance
• Politeness, and others.
Preparing job descriptions and job specifications for salespeople is a very much challenging
task because these two statements highly depend on

• Nature of the job.

• The personal prejudices of the sales manager.
• More objective research was conducted into the attributes of successful
salespeople

Identification of Sources of Recruitment

• From Inside:
• The company’s own sales staff
• Employee referral and recommendation
• From Outside:
• Advertisements
• Recruitment agencies
• Educational establishments
• Competing companies/firms
• Unsolicited applicants
• Websites

Announcing Vacancy

Once all the above all important activities are performed, at the last step the vacancy of
recruitment of the required salesforce is announced.
SALES FORCE SELECTION

Initial Screening

When candidates arrive to fill out applications, the screening counter conducts initial
screening inquiries and then conducts screening interviews. The candidate is judged here
based on the minimum credentials he or she holds, and then the application form is handed to
fill out completely.

Completion of the Application Form

After initial screening, the qualified candidates have to complete the application form with
the demanded information written on the form. This form in common contains the following
details of the candidate:

• Applicants’ name
• His/her address
• Parents’ background
• Previous experience
• Training
• Education
• Gender
• Age
• Interest areas
• Hobby
• Citizenship
• Telephone number/Mobile number
• Job skills
• Assurance that the filled information is true
• Signature and thumb initial
In case the information given is checked and found not properly mentioned in this application
form, it is rejected. If they are true, the candidate is passed to the next step of requirements to
meet.

Salesforce’s Test

Matching to the sales job that a prospective salesperson will have to perform suitable tests are
taken in course of predicting who will be successful on the job. These tests may include the
following:

• The Job Performance Simulation Tests: These tests are used to assess the
candidate’s actual job behavior. This conduct may involve the candidate’s
psychological grounds and aptitude testing, which may have a good or negative
impact on his or her job performance. In order to execute the job properly, the
applicant must engage in certain job behavior during the testing process.

• Work sampling Test: Applicants are given a sample of tasks to complete. By

completing the specified sample of tasks, the applicants have to demonstrate that they
possess the relevant skills. This is how each job’s knowledge, skills, and abilities are
determined. Each work sample element is, in fact, linked to the associated job
performance elements.

• Assessment Centers: This test is used to assess a candidate’s managerial ability for a
sales position. Assessment centers are used to administer the candidate. Then he or
she must complete a series of exercises determined by the centers. Line executives or
psychologists are in charge of evaluating the performance. Personality and aptitude
tests may be used at some assessment centers.

Comprehensive Interview

The comprehensive interview is the in-depth selection device that is used to get information
about the sales candidates. Its format is developed by the company’s executives, considering
the following factors.

• Motivation
• Values
• Ability to work under pressure
• Attitude
• Ability to fit in with the company’s culture
Conditional Job Offer

After succeeding in the comprehensive interview, the company offers conditional sales jobs
to the passed candidate. The conditions include passing a thorough background investigation
and tests of physical fitness.
Background Investigation

In this step of salesforce selection, the sales organization/company verifies the information
given by the candidate in the application form whether they are true and accurate or not. The
verification basically concentrates on:

• References and their relationship with the candidate.

• The candidate’s work records and performance and other behavioral
information in the previous employer/company.
• Educational accomplishments.
• Legal status to work.
• Credit references (if previous job).
• Criminal records (if needed).
• Online searches about the candidate.
Test of Physical Fitness

If the company/employer is happy with the candidate’s background study, it will request a
report on his or her physical fitness. This report should come from the employer’s own
doctors, not from other doctors, such as the candidate’s personal doctors.

This method is used to screen out individuals who are unable to physically meet the standards
of the job being provided. The candidates who passed this step are progressed to the final
step.

Permanent Job Offer/Selection

Giving a permanent job offer to the potential sales personnel is the last step of the salesforce
selection process. The company gives the selection letter with the terms and conditions along
with salary and incentives details to the selected candidates. This is where the candidate is
selected and now can join the task.

SALES TRAINING

Sales training is the organized program to enhance the skills, abilities, attitudes, and
performance of salesforce/sales personnel to achieve the sales objectives with best practices.
It is organized to support sales personnel’s sales performance to make them strategically
adapt to changing selling practices to support the profit of the firm also.

Purpose of Sales Training

• Helping salespeople become better managers

• Orienting the new salesperson to the job
• Improving knowledge in areas such as product, company, competitors, selling
skills, etc.
• Lowering absenteeism rate
• Positively influencing sales attitudes of sales personnel in job satisfaction
areas
• Lowering selling cost
 • Informing salespeople about changes in behavior
• Obtaining feedback from the salespeople, and
• Increasing sales in particular products or customer categories.

STEPS IN THE SALES TRAINING PROCESS

1. Training Needs Analysis

The training needs of new salespeople are identified by assessing the responsibilities that
have been allocated to them. The analyst evaluates a person’s abilities, expertise, duties,
responsibilities, and other attributes to the job description and specifications using this
method.

Then he or she figures out where these salespeople’s gaps are. The analyst may conduct an
interview with such salespeople as part of their work analysis.

2. Designing Training Programs

The required sales training program is established after the training needs are identified.
Many concrete decisions are taken during the course. The decisions are about,

• Training objectives to set

• Actual contents of training to develop
• Training budget to fix
• Suitable training method to choose
• Appropriate trainer to hire
• Conducive training environment/place to choose or create
• Effective training aids to develop
• A number of participants at a time, to decide;
• Duration of training to fix, and
• Types of salesforce to train in a single program.
All of these decisions are important in this step to ensure that the training program is as
effective as possible

3. Implementing Sales Training Program

A sales training program is implemented based on the above-mentioned decisions.

Implementing a sales training program entails putting the instruction into action. The trainer
makes training methods easier to grasp and responsive in all respects, including to the trainer,
participants, and the sales organization, while applying them.

4. Evaluation of Sales Training Program

This last step of the sales training process focuses on measuring program effectiveness.
Basically, four different tools are used to judge the effectiveness of implemented training
program. They are:
 • Participants’ reactions to the training course
• Acquisition and retention of knowledge and attitude change
• Changes in participants’ work behavior
• Organizational outcomes after training.

IMPORTANCE OF SALES TRAINING PROGRAM

Importance To Sales People/Participants

Enrichment of Knowledge and Skills: Participants’ knowledge is enriched because while

providing training, the trainer delivers about the company, its products, and competitors’
products.
Job-Related Behavioral Change: The strengths and limitations of salespeople’s job
performance are carefully evaluated while determining training needs
Motivation and Learning Improvement: The trainer uses various training aids such as
presentations, graphs, charts, movies, and other media to make the training program as
successful as possible.
Sales Confidence Improvement: Because they are required to demonstrate the assigned
components in front of other participants, including salespeople and peers, as well as the
trainer and evaluators, salespeople’s self-confidence grows.
Higher Job Satisfaction: When salespeople return to work after completing a scheduled
training session, they begin implementing the new information, abilities, and behaviors in a
real-world sales environment, where they are motivated and dedicated.
Importance To Organization

Cost Reduction: Training develops not just sales knowledge but also sales skills, as
previously indicated. There will be fewer callbacks to close the deal if your talents are higher
Complaint Reduction: Because the trained salesforce persuades people to the level for
which they were educated, effective training decreases customer complaints about products
or services supplied
Lower Sales Staff Absenteeism and Turnover: Salespeople have the realization that the
organization is willing to invest in them after participating in the sales training program.
Reduced Management Assistance: Well-trained salespeople require less management help
because they can manage their own operations by using what they learned during the training
program. Higher Sales and Profit Generation: Because of the all above benefits, the overall
company’s sales are increased and the company benefits from the higher profits.
METHODS OF TRAINING
✓ INDIVIDUAL TRAINING
✓ GROUP TRAINING
INDIVIDUAL TRAINING
✓ On the job training- In this type of training, salesmen are appointed to do their duties
under the guidance of experienced salesmen. They learn by doing the selling job. This
method is also known as “training within industry” or “teacher and taught training.”
✓ Job Rotation Training- This method is used to provide knowledge to the trainees in
respect of functions of different departments; such as, research department, accounts,
advertising, purchase, packaging and public relations, etc. Job rotation training is
organized on the basis of a well-planned training programme. This type of training
develops the practical knowledge of the trainees on different aspects of sales
✓ Personal Discussion- In this method of training, salesmen contact with his Sales
Managers and Senior Managers from time to time and discuss with them the
individual problems. The Managers give good advices and suggestions, based on their
experience in the field.
✓ Programmed Instruction- Involves the delivery of training through instruction that
is delivered by a program via some electronic device without the presence of an
instructor.

GROUP TRAINING

✓ Lectures or Classroom Instructions- An expert speaks to trainee-salesmen in a

group about the various aspects of selling. This is a class-room training. Visual aids,
demonstration and overhead projectors may be used for imparting effective training.
✓ Audio-Visual Method-To supplement the lecture method, training programmes
include the use of visual aids, such as films, making them more interesting
✓ Group Discussion Method-In this method of training, different groups are formed by
limited number of persons (15-20). Each group seeks guidance under the leadership of
a senior officer. The group discusses the sales problems with the leader and efforts are
made to find out a commonly agreed solution to each problem. During group
discussions, everyone gets an opportunity to learn from the ideas of others.
✓ Sales Conference Method-In this method, the trainees discuss the points of common
interest. It is a formal meeting conducted in accordance with an organized training
plan. It lays emphasis on small group discussion, on specific subject matter. Such
sales conferences are generally organized on yearly basis. This method is sued for
training the persons holding managerial positions and having basic knowledge on the
subject of training
✓ Case Study Method- In this method, trainees are given cases to analyze. They are asked
to identify any sales problem and to recommend tentative solutions for it.
o The trainer points out the drawback and is given guidance for improvement.
o Case study method is primarily useful as a training technique suitable for
supervisors to improve their decision-making skills.
✓ Role Playing Method- It is a method of human interactions. The idea of role playing
involves action, doing and practice. For example, the trainees are given certain roles
as salesmen, sales supervisors, customers and others. They are asked to act in their
respective roles. The trainer examines and evaluates their roles and explains to the
trainees the correct method of role playing.
✓ Simulation or Gaming Method- Simulation is a technique which duplicates; as
nearly as possible, the actual conditions encountered in a job. The knowledge about
 various decision methods such as selling efforts, advertising, sales force management,
size of the orders, time for getting orders, etc. are learnt through such training, the
decisions taken by the trainers.
✓ Sensitivity Training- Sensitivity training or T group training is an experience in
interpersonal relationships in which results in change in feeling and attitudes
towards oneself and others.