Sales Management: Forecasting, Quotas, Performance, Motivation, and Coaching

Vocabulary practice flashcards covering sales forecasting, quota design, sales force sizing, performance determinants, motivation theories, and sales coaching best practices.

Market Potential

An estimate of the possible sales of a commodity, a group of commodities, or a service for an entire industry in a market during a stated period under ideal conditions.

Sales Potential

The portion of the market potential that a specific firm can expect to reasonably achieve.

Sales Forecast

An estimate of the dollar or unit sales for a specified future period.

Sales Quotas

Sales goals assigned to a marketing unit or objectives assigned to salespeople for a specific period, used for managing, planning, controlling field selling activities, and serving as a benchmark for performance.

Universal Truth of Forecasting

The principle that regardless of the forecasting method used, the forecast is always going to be wrong; no one is ever completely correct.

What is the universal truth about focasting?

1 The forecasting method is important

2 It’s always going to be wrong

3 Just stick to one forcasting method

What are the subjective method of sales forecasting ? IT IS THE MOST COMMONLY USED

1 User expectations

2 Salesforce Composite

3 Jury of Exectutive Opinion

4 Delphi Technique

User Expectations Method

A subjective forecasting method in which the buyer directly indicates their intention to purchase.

Sales Force Composite

A subjective forecasting technique based entirely on the opinions and estimates provided by the sales force.

Jury of Executive Opinion

A subjective forecasting method that compiles the consensus views and key opinions of internal experts and executives.

Delphi Technique

A subjective forecasting method in which each participant prepares an estimate, and these estimates are compared anonymously and iteratively until a consensus is reached.

What are the objetive methods of forecasting?

1 Marketing Test

2 Time Series Analysis

3 Statistical Demand Analysis

Market Test

An objective forecasting method where a product is placed in select representative geographic areas to gauge actual consumer response and predict future sales.

Time Series Analysis

An objective forecasting method that relies on historical data to develop predictions for the future.

Statistical Demand Analysis

An objective forecasting approach that attempts to make comparisons to determine the relationship between sales and the factors that influence sales.

Moving Average

A time series forecasting technique that averages sales results over previous time periods to forecast into the future.

Exponential Smoothing

A type of moving average forecasting where the most recent years or periods are given more weight.

Decomposition

A time series forecasting method applied to monthly or quarterly data where a seasonal pattern is evident, making critical adjustments for seasonality and cyclical factors.

Scenario Planning

A forecasting approach in which firms prepare a series of "what-if" questions to produce a range of possible outcomes.

Characteristics of a Good Quota

Four essential traits required for a quota to be effective: attainable, easy to understand, complete, and timely.

Sales Volume Quota

A quota directly emphasizing sales or aspects of sales, often based on past sales and market potential, expressed in dollars, physical units, or points.

Activity Quota

A quota based on specific sales actions (e.g., number of sales calls, prospecting, calls per day) reflecting territorial conditions and customer needs.

Financial Quota

A quota that reflects the financial goals of the firm, focusing on metrics such as gross margin, net profit margin, or contribution to overhead.

Breakdown Method

A method for determining sales force size by calculating the total sales volume needed and dividing it by the expected productivity per salesperson.

Workload Method

A buildup method used to estimate sales force size by calculating the total work required to serve an entire market across categorized customers.

Incremental Method

A sales force sizing approach suggesting that sales representatives should be added as long as the incremental profit produced by their addition exceeds the incremental cost.

Simple Sales Analysis

A sales evaluation method where raw facts and results are presented without being measured against any standard.

Job Performance Factors (Model)

The five basic factors determining a worker's performance according to industrial/organizational psychology: role perceptions, aptitude, skill level, motivation, and personal/organizational/environmental variables.

Sales Aptitude

An individual's innate sales ability, considered a function of physical factors, aptitude factors (verbal intelligence, math, sales expertise), and personality traits (empathy, ego, sociability, assertiveness).

Motivation (Sales Force)

The effort the salesperson willingly expends on activities and tasks associated with performing their job.

Expectancies

A salesperson's perceived linkages between expending more effort and achieving improved performance.

Instrumentalities

A salesperson's perceived relationship between achieving improved performance and receiving increased rewards.

Valence for Rewards

A salesperson's perception of the desirability, attractiveness, or intrinsic value of the rewards they might receive.

Intrinsic Motivation

Motivation that is internal to the individual, driving tasks performed strictly for inherent joy, self-fulfillment, or personal satisfaction.

Extrinsic Motivation

Motivation driven by factors external to the individual, such as working for an external reward (pay, prizes) or to please others.

The Inspection Principle ("Webism")

A foundational management rule stating that "people do what you inspect, not what you expect."

Four Career Stages

The developmental phases salespeople progress through in their careers: Exploratory stage, Establishment stage, Maintenance stage, and Disengagement stage.

Psychological Motivation Choices

An individual's three-part decision to: 1. Initiate action on a certain task; 2. Expend a certain amount of effort on that task; and 3. Persist in expending effort over time.

Seven Dimensions of Sales Job Satisfaction

The components that lead to sales job satisfaction: the job itself, fellow workers, supervision, company policies and support, pay, promotion/advancement opportunities, and customers.

Workforce Mood Tracker Report (2013)

A study establishing that $78\%$ of employees are actively motivated by recognition.

Conference Board of Executives Coaching Benchmark

A benchmark study citing that consistent sales coaching yields a $17\%$ improvement in company revenue.

Top Reason Managers Don't Coach

According to survey data, the number one barrier preventing sales managers from coaching is "Not enough time" ($47\%$), followed by "Don't know how or when" ($26\%$).

Ad-Hoc Approach to Coaching

The most common method companies use to handle sales rep coaching, accounting for $45.7\%$ of organizations according to CSO Insights.

Sales Coaching

An ongoing, real-time, sales-manager-driven, evolving conversation and continuous improvement effort targeted to specific individual rep needs, designed to make people see what they can be rather than what they are.

Sandwich Method

A constructive feedback technique that packages critique between compliments: beginning with praise, delivering the critical feedback, and ending with positive reinforcement.

The "New" Golden Rule

A sales management principle that states: "Don't treat people the way you want to be treated, treat them the way they want to be treated!"

Top Sales Manager Killer Mistakes

Critical management errors that derail performance, including starting coaching with a negative comment, treating new hires like tenured reps, micromanaging, leading by fear, and failing to celebrate success.