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Annual Quotas

Most companies set annual quotas. Quotas can be on dollar sales, unit volume, margin, selling effort or activity and product type. Compensation is often tied to the degree of quota attainment. What problems does the setting of quotas present to both the company and to the sales representative?

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Most companies set annual quotas. Quotas can be on dollar sales, unit volume, margin, selling effort or activity and product type. Compensation is often tied to the degree of quota attainment. What problems does the setting of quotas present to both the company and to the sales representative?

In setting sales quotas, some potential questions and issues will be encountered by the company and the sales representative. Among them are as follows:

? Are the quotas equitable and fair?
? Are the quotas a strategic tool that can be utilized for maximum business results?
? Will they drive the desired sales behavior?
? What are the types of data to be considered when setting quotas?
? Are the quotas too high or too low?
? Will their attainment provide for the proper ratio of revenue to sales expense?

The success of setting sales quotas will depend on how well the company and sales representative address the above important issues.

The process of establish normal and reasonable sales quotas can ...

Solution Summary

The solution discusses the problems that the setting of quotas present to both the company and to the sales representative. References included.

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