Sales Target Setting

Setting targets in Sales must be based on a scientific process so that all that the salesperson is expected is to stick to the process. The most unscientific statement which a Sales Management can make is that since you sold 100 units last year in this month, we expect you to sell 12o units this year. Let us look at the science behind the process of setting a sales target.

Hit Ratio of the salesperson 19 : 1 ( Assume)

( The no of prospects that a given salesperson has to meet to generate one sale is called Hit Ratio of the given salesperson. This no will vary depending on the form of selling e.g. FMCG, Direct Selling, KAM etc)

No of Routes assigned to a sales person 20 Routes

Total no of calls/month @ 19/Route/day 380 Sales Calls

MNOC (Min no of Calls per day) 19 Calls / day

Total no of orders possible for this salesperson 20 Closed deals / month

Average Ticket Size(ATS) of one close Rs 1 lakh ( Assume)

Total Sales Target for the salesperson Rs 1.25 lakh per month

Total sales incentives %age of Rs 25000/-