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Sales Quota Standards and Effectiveness of Income Generation

1. Should sales quota standards be tied to financial reports. Why or why not? If so, how closely?

2. Contrast and compare the effectiveness of income generation versus expense reduction in creating profitable business.

Solution Preview

1. Sales quota standards should definitely be tied to financial reports for the simple reason that effective sales quota standards help management to find out the reasons for sluggish performances. Generally, sales quota standards are being overlooked due to following reasons:

An Afterthought -The organization has invested time, energy, and resources in creating its sales strategy and the new sales compensation plan and has little energy, time, or tolerance left for developing market-based quotas.

Inappropriate Accountability - Quotas may not be clearly owned in the organization with split accountability from the sales organization, sales operations, or finance. Often the organization that owns the quotas, like finance, is farthest from the market has and the least knowledge about market opportunity and sales organization capability.

Lack of Information or Methodology - Setting and allocating accurate quotas can be downright confusing and ...

Solution Summary

Sales quota standards are discussed below with mention of their utility and reasons for being overlooked before the response goes on to weigh up the pros and cons of income generation vs. expense reduction to maximize profit. 581 words total.