DEFINITION of 'Activity Quota'

Activity quota is a minimum level of sales-oriented actions that must be met by a salesperson during a given time period. An activity quota may require a salesperson to make a certain number of outbound calls, send a certain number of emails to potential clients or submit a certain number of statements of work. The quota is not typically based directly on a revenue figure requirement, but is related to the actions that lead to a sale being made.

BREAKING DOWN 'Activity Quota'

Activity quotas are often used in situations in which salespeople have to contact potential clients. The quota is designed to ensure that the salesperson is making a minimum level of effort to attract new clients, and employers may reward employees who surpass the activity quota as an incentive to put in more effort. 

When a product or service "can't sell itself," a salesperson must put in great effort to do so. Sales staff in an Apple store or a Tesla dealership have the luxury of eager customers looking to buy, but for most other goods and services that are not so differentiated or lack strong brand equity, salespersons must work hard to promote them. Computer software services come to mind, as do several financial services such as financial planning, insurance and retail banking. Unless well-connected to high net worth individuals (HNWI), a financial planner (or advisor) without a pre-existing "book of business" must contact hundreds, if not thousands, of prospects to generate sufficient revenues to keep the sales job. The same holds true for an insurance salesperson. Since it is generally not in a person's nature to make so many cold calls and write countless cold emails only to get rejected, the salesperson must be held to account by his or her employer. An activity quota is the principal means by which an employer measures this effort.

Activity Quotas in the Age of Social Media

The types of activities subject to quotas are changing in the age of social media. Cold calling is still considered a way of reaching prospects, but increasingly the method is being supplanted by contact techniques offered by social media. Potential customers clicking on links or "liking" or "tweeting" about a product or service give direct signals to salespersons so they can better focus their sales efforts. Thus, instead of an activity quota of 250 phone calls in a week for a financial advisor in his probation period, he may be ordered to contact 50 people who commented on "retirement planning" in a social media feed.

  1. Quota Share Treaty

    A quota share treaty is a pro rata reinsurance contract in which ...
  2. Reserve Tranche

    The reserve tranche is a segment of an International Monetary ...
  3. Accounting Measurement

    Accounting measurement is the computation of economic or financial ...
  4. Soft Sell

    Soft sell refers to an advertising and sales approach that features ...
  5. Always Be Closing - ABC

    Always Be Closing (ABC) is retail jargon used to describe a sales ...
  6. Warm Calling

    Warm calling is the solicitation of a potential customer with ...
Related Articles
  1. Investing

    Real Estate Licenses You Would Need in New York

    Learn the requirements for getting licensed to practice real estate in New York, which include prelicensing course work and a written examination.
  2. Tech

    6 Essential Marketing Tips for Financial Advisors

    As a financial advisor, your ability to market yourself is vital to the success of your practice, even if you're a great salesperson.
  3. Investing

    7 Ways Sales Commissions Hurt Investors

    Although sales commissions are still common they are rarely, if ever, good for the investor.
  4. Investing

    The Sales Commission Dilemma

    These professionals' interests may not always align with your own. Find out how to protect yourself.
  5. Financial Advisor

    Cold Calling Vs. Networking

    Why networking is taking over from cold calling as the best way for financial advisors to grow their client base – and where cold calling fits in.
  6. Personal Finance

    10 Jobs with the Worst Growth Outlook

    Some jobs, like two in media, have a lower growth forecast than others for 2017.
  7. Financial Advisor

    Social Media and Compliance: Toeing the Line

    These are things advisors can do to stay in line with compliance guidelines while effectively leveraging social media.
  8. Financial Advisor

    Advisors: How to Make Social Media Work for You

    Most financial advisors today are using social media to help build their client base. Here are some tested basic guidelines on how to get started.
  9. Financial Advisor

    Seeking a Financial Advisor Job? Read This First

    The choice between a larger or smaller company may be decided by an advisor's experience or temperament. Find out the best size for you.
  10. Financial Advisor

    Not on Social Media Yet? You May Be Losing Clients

    If you’re a youngish advisor and still not on social media, consider the changing landscape. You could be losing clients because of it.
  1. What are some examples of moral hazard in the business world?

    Learn what moral hazard is and how it permeates the business world, including common examples of moral hazard at work in ... Read Answer >>
  2. What is the difference between a principle agent problem and moral hazard?

    Learn how a principal-agent problem often leads to moral hazards in the context of an agent and principal having different ... Read Answer >>
Trading Center