1. Importance of Sales Quotas
Sales quotas serve several purposes. The important objectives are shown in the diagram below:
Sales Quotas
Quotas provide performance targets
Quotas provide standards
Quotas provide control
Quotas are motivational
Sales Objectives

2. Types of Sales Quotas
A sales organization can set many types of quotas. The most common quotas are shown in the following diagram:
Sales Volume Quotas
Profit Quotas
Expenses Quotas
Activity Quotas
Quotas Combinations

3. Sales Volume Quotas
Sales volume quotas include sales in rupees or product unit objectives for a specific period of time. For example, New East India Ltd. calculates sales in rupees, whereas Bajaj Motors calculates sales as number of cars sold. Sales volume quotas are first set for the entire year. The yearly total volume quota is then set for shorter time periods, such as three months, six months and nine months. The sales force is assigned their yearly quotas. Sales targets are set for the year for sales force, so their aim is to sell throughout the year to achieve the total sales objective. The sales volume quotas can be set in the following areas:

4. Sales Volume Quotas (Cont’d.)
Product line
Product range
Sales divisions
Sales territories
Sales districts
Branch offices
Sales force (Individual)

5. Expense Quotas
Expense quotas are related to selling costs within reasonable limits. Some companies set quotas for expenses linked to different levels of sales attained by their sales force. Salespeople may receive an expense budget that is a percentage of the territory’s sales volume. The salesperson must spend only this amount as expenditure.

6. Common Types of Activity Quotas
These quotas set objectives for job-related duties useful for attaining salespeople’s performance targets. Activity quotas are required to make the sales force perform other activities which have long term implications on the goodwill of the firm. A sales organization must set a target level of performance for salespersons. Some common types of activity quotas prevalent in Indian companies are as follows:
Number of sales presentation made
Number of service calls made
Number of dealers visited
Number of calls made for recovery
Number of new accounts opened
Common Types of Activity Quotas
Activity quotas typically should not be a basis for rewards. Rather, their attachment helps the manager better understand why salespeople do or do not meet their sales volume quotas.

7. Quota Combinations
Many companies use a combination of these quotas. The two most commonly combined are sales volume and activity quotas. These quotas influence selling and non-selling activities.
It is also important not to have too many quotas; otherwise, the salespeople may become confused as to what is expected. Several quotas can be used, but they should be on the most important activities, total sales volume and the products that result in the most sales.