Having good sales quotas can mean the difference between a profit and a loss for your business.
Having good sales quotas can mean the difference between a profit and a loss for your business. How do you know if you’ve got good sales quotas? Since they’re largely subjective, and vary widely from one business to the next, it can be difficult to know if you’re using the right sales quotas. There are many factors to consider when examining sales goals, and many of them are based on internal company data, making them different for every business. However, there are some characteristics that all good sales quotas should share. These characteristics will ensure that the goals you set encourage growth and reward success.
Good sales quotas must be realistic. Some businesses try to encourage their salespeople to work harder by setting exceptionally high sales quotas. Once your salespeople realize that the quotas aren’t achievable, they’ll stop trying to reach them. Ending each sales period with a sense of failure isn’t much of a motivator. Realistic quotas should be based on internal metrics, and should mirror the projected growth of the company. Under- or over-shooting the quotas can be a productivity killer. Too low, and you’re not getting the most out of your salespeople. Too high, and they’ll lose their motivation. Finding the perfect balance can be tricky, but it can be done. Using good internal data and performance reviews will help you find the sweet spot for your sales quotas.
If your sales force is frequently missing its sales quotas, they’re either improperly motivated, or the quotas are incorrectly set. For your sales team to succeed, you need to give them the right tools. One of those tools is an achievable set of sales quotas. Even if the quotas are realistic on paper, there are many other factors to consider. Economic downturns, uncertainty, or seasonal changes can all have an effect on sales quotas. Any factor that affects the achievability of quotas can also affect the morale and motivation of your sales force. Sales quotas must be dynamic and adaptable to keep up with changes in the sales climate.
Achievable and easy are two entirely different things. It can be tempting to lower sales quotas to help boost morale. If your quotas are realistic and achievable, then lowering the bar shouldn’t be necessary. If you want your sales force to grow and improve, you need to give them challenges. These challenges will give them something to work for, and a greater sense of accomplishment when they meet their quotas. If you find that your entire sales force is consistently missing quotas, re-examine the quotas along with the training and compensation your sales staff is receiving. If your sales force is consistently meeting goals, don’t be afraid to ratchet up the difficulty a few notches.
Managing sales quotas is a difficult task. The factors that affect quotas are ever-changing, meaning the quotas need to change as well. Trying to hit a moving target is never easy, but there are some ways to improve your chances. Starting with good data, make sure that you have realistic sales quotas. Don’t base your quotas on wishful thinking or data from comparable businesses. They must be based on your data, from your business. Make sure that the quotas you pick are achievable. Examine all the factors that affect the likelihood of achieving your sales quotas. Move the quotas up or down, depending on whether the factors are negative or positive. Set quotas that are challenging, but not impossible. You want your sales force to be putting all of their skills and knowledge to work for you. If the quotas are too low, they’ll simply sleepwalk through the sales period. Don’t be afraid to push them to perform at their highest level. By using all of these characteristics, you can be sure that you’re using good sales quotas.
Claire has 4+ years of experience in sales and recruitment. As a Director of Client Services, her main objective is to connect great people to great companies by building strong relationships with both top clients and candidates in the sales industry. She specializes in sales roles of all seniority levels for both enterprise and start-up clients North American wide. When Claire isn't networking with top talent, she enjoys being outdoors, traveling and spending time with friends & family.