Your bottom line can improve when you set the right sales quotas for your distributors. When you set quotas, your team becomes more motivated to sell, and everything aligns with your company’s goals. You need to plan these targets and review them from time to time to make sure they still work well.
When you set up your quotas, you can get your distributors to sell up to 25% more. I’m going to talk about looking at your previous sales numbers, teaming up with your team to create targets that build on each other, and giving rewards that make sense. You should consider what’s happening in the market, how much each area can sell, and which products you want to push more. Just remember that trying to use the same quotas for everyone usually doesn’t work out well.
If you want to create quotas that get results without making your distributors feel like they’re being pushed too hard, the best way is to set goals that are challenging enough to be engaging but not so tough that people give up. This approach helps keep your relationships strong for the long run.
Let’s get into the details now!
Historical Data And Market Insights
Businesses sometimes make this mistake – they grab old numbers without thinking about how the market has changed. You need to check past results while also keeping track of the new market patterns that might change how much your distributors can sell.
Looking at old sales data can give you a decent place to start when creating goals. Take some time to review each distributor’s sales over the last few years to find patterns. You might see that some places always sell more during certain times of the year. This kind of info helps you create targets that make more sense for different seasons.
The market is always changing, and these changes can affect what your distributors can achieve. An area that didn’t do well last year could be ready for growth now because of new housing or new businesses opening up. A place that did well before might now be dealing with more competitors or a slow economy.
We worked with a distribution company that found a wonderful opportunity they weren’t expecting. They had always focused on large city areas. When they looked at their regional data more closely, they saw they were missing out on smaller towns and rural areas. After they changed their strategy based on this new info, their sales went up by 20%!
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Things outside your control can really impact what your distributors can sell. Remember how fast the industry is growing, any new rules or laws, and changes in what customers want when you’re setting targets. Even new technology can create sales opportunities that weren’t there before. Businesses that do well use two different approaches when setting quotas. One starts with our company’s big goals and then breaks them down for each distributor, and the other looks at each distributor’s market and builds up from there. This helps you create targets that push your distributors without being impossible to reach.
When you don’t have quality data, it’s as good as having no data at all. Make sure that your information is accurate and up to date before you use it to set quotas. If your data isn’t reliable, you’ll end up with targets that don’t make sense and this frustrates your distribution partners and can damage your relationships with them.
Collaboration And Distributor Engagement
When you bring your distributors into conversations about sales targets, you can build trust that lasts. Let’s get started because nobody likes being handed a number without any input. Your distributors are out there every day and they find out what’s going on in their markets. They can pick up on patterns that you might not see from your main office.
One time, I talked to a medical equipment distributor from the Midwest who shared something that I still think about. His company took the time to listen when he explained the challenges he had in his rural area. They changed his targets to better match what the local hospitals could actually spend. That year, he ended up beating his quota by 18%. The trust they showed made their working relationship stronger than it had ever been.
Distributors who feel that you value their feedback will put more effort into working with you. They start to see themselves as your partners instead of just another way to sell your products and this thinking turns the relationship from just business into real teamwork. Your distributors will be more honest about problems in the market when they know that you care about what they have to say.
Financial matters differ from one area to another, and they can make a big difference in meeting sales goals. A target that makes sense in Boston might be way too high in Boise because the markets aren’t the same size. Businesses look at what’s actually possible in each place. If you don’t recognize these differences, then you’ll end up with unhappy distributors and missed opportunities to make sales.
Your distributors’ knowledge about their local market is important when you’re trying to set targets that make sense. They know which competitors are doing better in their area. They understand when people like to buy more or less throughout the year and this inside knowledge helps you create targets that push for growth without being impossible to reach.
When you check in with your distributors on a regular basis, everyone stays on the same page, and these conversations shouldn’t just happen when someone misses their target. Remember that distributors talk to each other about how businesses treat them, and news travels fast when a company doesn’t listen to local input about sales targets. The businesses that do best are talking about market conditions all year long, which helps catch problems early before they hurt your sales goals. This kind of reputation can make it harder to get good people for other areas, while the best distributors want to work with businesses that like what they know!
Quota Structure For Realistic Targets
When you break your distributor sales quotas into different layers, it makes sense to set separate goals for each product line your company sells so your distributors start selling your products instead of just going for the easy ones. You might also want to try creating tiered goals that give bigger rewards as sales increase and recently businesses have been combining targets for revenue with targets for profit to get better results.
You need to consider external factors when planning your quotas because market conditions can change over time. If the economy isn’t doing well, you might need to lower your expectations for a while, and new products also need special treatment with quotas since you can’t expect new items to sell like your tried-and-true products.
Monthly quotas tend to be more effective than yearly quotas in some situations because they give your distributors clear, short-term goals to work toward. I worked with a company that changed from yearly to monthly targets last year and their distributors started hitting numbers they had never reached before. When you check in more often, it usually helps everyone stay on track and make quick changes when needed.
The same quota for everyone just doesn’t work well because different regions have different challenges. Products that sell wonderfully in city markets might completely fail in country areas, and your distributors also come in different sizes and have different skills, so a quota that pushes your best performer might make a newer distributor want to give up.
Be careful not to set your quotas too high since setting goals that seem impossible to reach can quickly destroy motivation. You should also be cautious about having too many separate targets because your distributors will get confused when they have to track too many numbers at once and you need to make sure your system is simple enough to understand quickly.
Past performance should guide how you set quotas by looking at what each distributor has done before and then adding a basic amount of growth on top of that starting point. Most businesses shoot for 10-20% growth when markets are stable. But you can make this higher or lower based on what’s happening in the market.
Incentives For Higher Distributor Motivation
The right rewards and bonuses can bump up how well your distributors do when you link them to sales targets. You need to remember what gets your team excited beyond just giving them money. Cash is worthwhile but it’s not always what drives everyone the most. Some of your distributors might work harder when they get recognized by others on the team or when your company gives them special treatment.
We helped a company whose distributor sales had been at the same level for years. They switched up their reward program to include cash bonuses and public shout-outs. In just one year, their best distributor doubled their sales because they felt that the company cared about them.
Money rewards can sometimes backfire if your targets seem too hard to reach. When your salespeople look at their goals and think, “there’s no way I can do that,” they might not even try. That’s why you need to make your targets hard but still possible to hit. If you set goals that seem impossible, people will just give up.
Rewards that aren’t cash can sometimes be more effective than you might think. When you let distributors see new products before anyone else, it makes them feel appreciated. When you include them in company events, it can motivate those who want respect. Even a simple thank-you call from someone high up in your company can help motivate them to work harder.
You should think about creating a reward system that celebrates progress at different points because this helps people stay motivated throughout the whole sales process. Small wins along the way keep your distributors interested, even when they’re still working toward bigger goals. Your system should reward both their progress and when they reach the final target.
The best quota systems match the right targets with the right motivators for each person on your team. Some people love leaderboards and competition. However, others like private recognition and opportunities to grow professionally. When you learn about what drives each of your distributors, you can create rewards that motivate them.
Progress Metrics And Regular Adjustments
You need to keep an eye on your results and make small changes to quotas so your sales reps don’t get stuck doing the same thing over and over. When you check in with them every now and then, it helps you find problems before they become big. It makes it much easier to manage sudden changes in what your customers are looking for and your team will probably stay sharp when they know you’re keeping track of their numbers, too.
The market can change pretty fast, and your quotas should be able to keep up with those changes. For example, Anastasia works as a regional sales manager and has seen that her team wasn’t selling their best product like they used to. “We saw orders drop by 30% for our best seller and needed to make changes,” she told us. She had to adjust their targets in the middle of the quarter and focus more on newer products that were starting to sell better.
If you see something strange in your sales data, you should try to find out why it’s happening. Don’t just check if your team hit their targets – try to get a clear picture of what’s causing the results you’re seeing. Maybe one of your competitors just released a new product, or your marketing plan isn’t working like you thought it would. These approaches help you set better quotas in the future.
You need to be honest with your team about any changes you make to their quotas if you want to build trust. Make sure to tell them why you’re making these adjustments and how you came up with the new numbers. This helps keep your team from getting upset and encourages everyone to work toward the same goals. Your sales reps will probably be more on board with the changes when they understand why you’re making them.
You might want to set regular times to review your quotas. For most businesses, checking them every three months works. But in markets that change faster, you might need to look at them more often. These reviews give you a chance to lower quotas that aren’t working out or raise ones that seem too easy. Either way, you’re making sure your targets stay basic.
When you look at how your team has done in the past, it helps you set quotas that make more sense. Look at things like how fast sales are closing, patterns throughout the year, and pipeline data when you’re making adjustments. You can learn quite a bit from your top performers about what’s actually possible in your market, and their success might point to opportunities you missed when setting quotas for everyone else on your team.
Level Up Your Incentives and Rewards
You’re building a system where everyone feels like they matter and wants to work to improve things. Your team becomes much more involved when they feel like what they say truly counts.
When you’re ready to adjust your approach during tough times, you’ll show your distributors that you really understand what they’re going through. The market changes, and unexpected things can pop up without warning. If you’re willing to change targets when that happens, you’ll earn their trust and encourage them to work harder.
Good quotas and real support can lead to a more engaged team, better sales, and stronger working relationships. There are some adjustments you could make to your current approach that would make these relationships even better.
With these systems in place to create programs that motivate people, you have the tools that matter. At Level 6, we’re experts at helping your business perform better with custom incentives and reward programs. We can help improve your sales team’s performance, make your employees happier, and do a lot more. We offer options like branded debit cards, rewards, and sales programs that we can shape to fit your business needs.
We put our energy into making custom programs that get real results. When you combine the right quota system with the right rewards, you can transform your relationships with distributors and improve your sales. Get in touch with us for a free demo to see how we help businesses that want their teams to perform at their best get the most from their money and sell better than ever!
Claudine is the Chief Relationship Officer at Level 6. She holds a master’s degree in industrial/organizational psychology. Her experience includes working as a certified conflict mediator for the United States Postal Service, a human performance analyst for Accenture, an Academic Dean, and a College Director. She is currently an adjunct Professor of Psychology at Southern New Hampshire University. With over 20 years of experience, she joined Level 6 to guide clients seeking effective ways to change behavior and, ultimately, their bottom line.
