Budget Quotas

The intension in setting budget quotas is to make it clear to sales personnel that their jobs consist of some thing more than obtaining sales volume. Budget quotas make personnel more conscious that the company is in business to make profit. Budget quotas indirectly controlling gross margin and net profit contributions.

Types of Budget Quotas:
a) Expense Quotas
b) Gross margin or net profit quotas
c) Activity quotas
d) Combination quotas

A) Expense Quotas: Expense Quotas emphasize on expense and different types of expense quotas. Key man life insurance is included in expense quotas.

B) Gross Margin or net profit quotas: Gross margin or net profit quotas emphasize margin and profit contributions.

C) Activity: This type of quota desire to control how sales personnel allocate their time and efforts among different activities. A company using this type of quota system start by defining the important activities sales personnel perform, then it sets target performance frequencies. Activity quotas are appropriate when sales personnel perform important non-selling activities, normally in insurance selling, drug detailing etc. Sales personnel are part of keyman coverage.

D) Combination Quotas: Combination quotas are used to control performance of both selling and no-selling activities. These quotas overcome the difficulty of using different measurement units to appraise different aspects of performance, thus combination quotas summaries overall performance in a single measure.

Sales Volume - Sales

We are talking Sales Forecast and Sales Budgeting here as part of our talk on Sales forces management. Sales Force Automation (SFA) is part of sales force management. We talked Fixing Sales Quota in our last talk. Today we are going to talk about Sales Volume.
Sales Volume:
Quote is an important standard for appraising the performance of individual sales personnel. Sales volume quotas communicate management’s expectations as to how much for what period sales volume quotas are set for geographical areas, product lines, or marketing channels or for one or more of these in combinations with any unit of the sales organization, the exact design depending upon what facets of the selling operation management want to appraise or motivate.

Sales volume quotas are subdivided into following categories:

• Money sales volume quotas
• Unit Volume quotas
• Point volume quotas

Procedure for setting sales volume quotas:

• Sales volume quotas derived from territorial potential.
• Sales volume quotas derived from total market estimates.
• Sales volume quotas based on past sales experience alone.
• Sales volume quotas based on executive judgment alone.
• Sales volume quotas related only to compensation plan.
• Letting sales personnel set their own sales volume quotas.

ref: Insurance CRM Software, Insurance Agency management software

Fixing Sales Quotas

Sales force management systems are information systems used in marketing and management that help automate some sales and sales force management functions. They are frequently combined with a marketing information system, in which case they are often called Customer Relationship Management (CRM) systems. CRM is part of Agency Management System. We talked Sales Forecasts and Sales Budgets in our last post. Today we are going to talk about Fixing Slaes Quotas.

Fixing Sales Quotas/targets for individual sales territories/salesman
Sales Quotas are quantitative objectives assigned to sales organizational units i.e., to individual sales personnel. In some company’s, sales management sets quotas for middlemen, such as agent, wholesalers and retailers.

Quotas set for sales regions or other marketing units are broken down and assigned to lower level units like sales districts, or to individual sales personnel. All quotas have time dimension- they quantify what management expects with in a given period.

We will talk about Objective of fixing sales quota in next post.

ref: Insurance Software, Insurance SFA, agency management system

Sales Budget - SFA

Sales Force Management (SFA) we are talking here which is a part of agency management system of business. We talk about Sales forecasting in our last talked. Today we are going to talk on Sales budget.

Sales Budget:

The sales budget is a statement of projected sales revenues and selling expenses. Agency management system needs to have a sales budget. The projected sales revenue is, in effect the sales volume objectives derived from the various sales forecasts. The projected selling expenses are determined by the different organizational units with in the sales department and are based on assigned sales and profit objectives.

The sales budget is best prepared in an atmosphere where the bottom-up planning style predominates, with each echelon preparing a tentative budget of revenue and expense.
During the period in which the budget is in effect, items in the approved budget are compared with actual sales and expenses, and action is taken to bring the two into alignment.


In reality, the sales budget is a composite of quotas for sales, profits and expenses. Budget is a valuable too for control.

ref: agency management system, Insurance SFA & CRM

Sales Forecasts and Sales Budgets

Sales Force Management we are talking here which is part of agency management system. We talked Sales Force Automation in past post.

Today we are going to talk Sales Forecasts and Sales Budgeting.
Sales forecasting is the estimation of future sales of a company in a given period. It indicates how much a company with a given amount of resource can sell if it implements a particular marketing program.

Methods of sales forecasting

Sales forecasting method is a procedure for estimating how much of a given product can be sold if a given marketing program is implemented. Following are the some of the methods used in forecasting.

• Jury of executive opinion
• Delphi technique
• Poll of sales force opinion
• Projection of past sales
• Time series analysis
• Exponential smoothing
• Survey of customer buying plans
• Economic model building and simulation

ref: agency management system, sales force automation (sfa)