How to Establish “Fair” Sales Territory Quotas

Like different holes on a golf course, sales territories can never be exactly equal in their challenges or potential. Add to that, the differences in experience and talent among the salespeople on your team and the complexity just increases.

Why, then, should “par” be the same for each sales territory? Certainly some par 4’s are easier than others and vary in difficulty from golfer to golfer.  From a sales perspective, it doesn’t make sense to treat them all the same, can be discouraging for those who are struggling with non-productive areas and allow those in very productive territories to coast and create resentment.

Here are some simple criteria put together by sales territory management experts for establishing fair sales quotas so that reps feel that “par” is possible.

1. Potential: The determining factor should be the area’s market potential.
2. Size: Then you need to adjust for how geographically broad the territory is as you consider how efficiently a salesperson can serve current clients and mine for new ones.
3. Time: A third aspect is the length of the sales cycle if it varies from the products being sold in different territories.

No one said it would be easy. But if you put forth a genuine effort to be fair and are ready to adjust quotas for good reasons once they have been tried and tested, your sales team will appreciate your reasonable approach.