The desire to control how sales personnel allocate their time and efforts among different activities explains the use of activity quotas. A company using activity quotas starts by defining the important activities sales personnel perform; then it sets target performance frequencies. Activity quotas are set for total sales calls, calls on particular classes of customers, calls on prospects, number of new accounts, missionary calls, product demonstrations, placement or erection if displays, making of collections and the like. Before setting activity quotas, management needs time-and-duty studies of how sales personnel actually apportion their time, making additional studies to determine how sales personnel should all Kate their efforts. Ideally, management needs time-and-duty studies salesperson and sales territory, but, of course, this is seldom practical. Activity quotas are appropriate when sales personnel perform important, non selling activities. For example, activity quotas are much used in insurance’ selling, where sales personnel must continually develop new contacts. They are also common in drug detail selling, where sales personnel call on doctors and hospitals to explain new products and new applications of both old and new products. Activity quotas permit management not only to control but to give recognition to sales personnel for performing non selling activities and for maintaining contacts with customers who may buy infrequently, but in substantial amounts.
While there is a large amount of clerical and record-keeping work, the main problem in administering an activity quota system is that of inspiring the sales force. The danger is that sales personnel will merely go through the motions and not perform activities effectively. Activity quotas used alone reward sales personnel for quantity of work, irrespective of quality. This is less likely to happen when activity quotas are used with sales volume or expense quotas; still adequate supervision and close contact with sales personnel are administrative necessities.
