The most common practice in sales organizations is that the target gets fixed at the top level and trickles down through various levels to the last mile sales executives. But what is the right target for each store? – it is one of the often debated questions in every sales organisation. The approach to figuring out the answer can be different under different circumstances –existing business vs. new entrant to market, in-store sales executive vs. feet on street sales executive, existing store vs new store, to name a few.
Here are some of the important factors that I think should be kept in mind to design and assign targets.
Historical dales data
- Of own brand -Historical sales data of the outlet can be considered and analysed to understand the trend. This data can be very helpful while assigning target.
- Of competition –It is important to consider competition sales data as it creates an opportunity to reflect on the actual potential of the outlet. If the outlet share of your brand is less than competition, then different strategy can be adopted to increase the outlet share of your brand without compromising the target.
Seasonality – Most of the brands goes through a seasonality of sales depending on the product or service. It is important to consider the seasonality while assigning the target. In this case, historical data of similar period in terms of % increase in business, can be considered.
New product launch – A new product or service launch needs to be considered while assigning target. Outlet specific historical data of previous launches can be considered as base for % increment in target.
Trade scheme for outlets – It is a regular practice for any brand to run periodic trade scheme for outlets and trade schemes are made with certain incremental business projection. This can also be factored in while designing targets for the sales executive basis the incremental business projection, outlet potential based on historical sales data, stock buying behaviour of the outlet because of the scheme etc.
New affordability scheme – Different affordability schemes will have different business projections and the same can be used as baseline for assigning target basis historical data of the outlet during such schemes, stock purchase record due to the scheme etc.
Newfound interest of the outlet – at times it happens that an existing retailer who is doing certain number of target suddenly shows keenness to do more business due to different reasons. Competition data, stock purchase record, footfall, potential of the location by analysing sales data of nearby stores etc. can be considered to assign a target in such scenario.
It is evident that no parameters discussed can work independently, it is always combination of parameters relevant to different scenarios. Also it is a dynamic process and regular customisation is required. We shall discuss other scenarios in my subsequent articles.
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