Selecting a Quota Methodology

Territory programs can be configured to use one of the two types of quota-planning methodologies: top-down or bottom-up.

The top-down quota-planning methodology is the more common of the two. This methodology starts with a quota value assigned to the root territory in the territory program. The quota is then allocated and distributed to the lower-level territories, one level at a time, by the director or manager at each level. This process repeats until the quotas are assigned all the way to the rep level territories.

As an example, let’s say that Bikes In Motion expects annual sales of USD 20 million in the upcoming year. They have determined that USD 15 million of this will be in North America and USD 5 million will be in Europe. However, they would like to allow the management teams in each region to determine how those quotas will be allocated on the regional level. For this scenario, a top-down methodology would be ideal.

In contrast to top-down, the bottom-up quota-planning methodology starts with a quota assigned at the representative level of the hierarchy and rolls up to managers, departments, and other higher levels. To do this, the program uses historical data to calculate the baseline value. The quota administrator can apply a growth target if necessary and take advantage of other options to perform bulk calculations and distribute the quotas.