1. Sales Management Sales Quotas Topic 11

2. 3 Powerful Tools Quotas Compensation Company Policy

3. Effective Quotas Attainable Easy to Understand Complete

4. Disadvantages Team Selling Uncontrollables Territory Fairness Time Consuming

5. Three Quota Types Sales Financial Activity

6. Sales Quotas Most Popular Advantages Disadvantages

7. Financial Quotas Advantages Disadvantages

8. Activity Quotas Advantages Disadvantages Use in Training

9. Price Setting Issues Sales Commissions are Dangerous with Pricing Authority Not a problem with Gross Margin Commissions Argument is Equally Valid when Incentive Pay is a Bonus

10. Price Setting Example Brand is priced at $100 Direct Unit Costs = $60 Gross Margin = $40 Compare 4% sales quota versus a 10% gross margin quota.

11. 4% SC vs 10% GM Commission Initially both have $4 earned on a $100 unit sold. But, suppose you cut the price $10 to get an order – what happens?

12. 4% Sales Commission $10 price cut so new price is $90 Sales Commission is.04 x $90 = $3.60 But company margins are now: $90 - $60 unit cost - $3.6 commission = $26.4 Versus $100 - $60 - $4 = $36

13. 10% GM Commission Same $10 price cut Commission = ($90 - $60) x.1 = $3 Company margin = $90 - $60 - $3 = $27 Price cut 10%, and commission fell by 25% ($4 vs $3) Incentive to cut price is lessened.